: mit press. lusardi, a. ( 2010 ), “ the importance of financial literacy ”, presentation to the conference on household finance and consumption, luxembourg city, 25 – 26 october 2010. bis central bankers ’ speeches another advantage of survey data is the possibility of collecting information on households ’ attitudes, beliefs and expectations. this allows researchers to establish a connection between behavioural traits and observed financial decisions. for example, in the hfcs, households are asked about the amount of risk they are willing to take on when making financial investments or whether over the next year they expect their income to go up more, less or about the same as prices. in the next couple of days we will listen to presentations on how gamblers manage their personal finances or how important are the presence of loss aversion and narrow framing, two of the most prominent aspects of prospect theory, for portfolio choice decisions. the study of household finance has much to say on the causes and consequences for the economy of the current financial crisis. the 2007 crisis, which originated in the us, is labelled the “ sub - prime crisis ”, and it is rooted in the excessive accumulation of debt by households which did not have the appropriate buffers to repay their debt in case of a negative shock. as policy - makers we should be deeply interested in knowing where the risks are concentrated in the household sector, how much of a threat they pose to other agents in the economy, which kind of shocks households are more vulnerable to. and should we, as policy - makers, worry about a house price decline, a rise in unemployment or a stock market bust? how exposed is consumer demand to declines in prices of different assets? how will financial losses of individual households impact on public finances? tomorrow morning we will hear about some of these topics and in particular about the effect of macroeconomic experiences on households ’ risk - taking behaviour and portfolio choice, the effect of credit supply shocks on asset allocation and the consumers ’ demand for cash in an after - crisis scenario of low interest rates. the closing session of the conference will deal with the topic of cross - country wealth comparisons. explaining household wealth differences across countries is not as easy as casual observers might think. there is a plethora of factors involved in the wealth accumulation process. public comments on the first wave of the survey last april confirmed the usefulness of a careful analysis and explanation of cross - country wealth differences, as was done in the explanatory documents. 8 the papers

benoit cœure : the relevance of household - level data for monetary policy and financial stability analysis opening remarks by mr benoit cœure, member of the executive board of the european central bank, at the ecb conference on household finance and consumption, frankfurt am main, 17 october 2013. * * * ladies and gentlemen, welcome to the european central bank conference on household finance and consumption. this conference follows an important milestone in a project that the eurosystem took up more than six years ago, the household finance and consumption survey ( hfcs ). the results from the first wave of the survey were published last april, and the microdata were made available to researchers interested in their use. the conference programme is a testimony to the potential that the hfcs has to enhance our understanding of the economic behaviour of individual households. let me explain why the ecb decided to embark on this complex project. now more than ever, after the recent financial crisis, it is clear that aggregate data do not always reveal the whole story. the same aggregate statistics can be the result of different underlying situations. in particular, micro - economic sub - structures may react differently when facing a shock or an economic policy intervention. progress in economic theory and in empirical methods also highlights the usefulness of a more granular approach to macroeconomic outcomes. to be more precise, there are two areas of great importance for the ecb in which the use of household - level data can prove very useful : monetary policy and financial stability. monetary policy interventions have distributional effects across the population depending on the composition of the assets and liabilities of households. one could argue that monetary policy is in essence distributional in the intertemporal dimension and the euro area crisis has uncovered distributional effects of monetary policy in the spatial dimension. such effects are however unintended, or in other words, they are a means to an end, that is price stability. central banks should steer away from distributional politics. but there can be a thin line between intended and unintended consequences, which makes it even more necessary to understand the cross - sectional effects of monetary policy interventions. let me give you a few examples. the proportion of total assets invested in interest - bearing products and the proportion of liabilities subject to adjustable rates may to a large extent determine the response of a household ’ s future income and net wealth to a change in interest rates. we would like to know how homeowners vs. renters, poor