ben s bernanke : financial education and the national jump $ tart coalition survey remarks by mr ben s bernanke, chairman of the board of governors of the us federal reserve system, at the jump $ tart coalition for personal financial literacy and federal reserve board joint news conference, washington, dc, 5 april 2006. * * * good morning. we are here today to learn about a report on a topic of vital importance to our economic future : the financial literacy of america ’ s young people. increasingly, personal financial security requires the ability to understand and navigate the financial marketplace. for example, buying a home, saving for retirement or for children ’ s education, or even effectively managing the family budget now requires more financial sophistication than ever before. financially literate consumers make the financial marketplace work better, and they are better - informed citizens as well. as a former educator and school board member, and as the parent of two young adults, i am personally convinced that improving education is vital to the future of our economy and that promoting financial literacy in particular must be a high priority. i know that those of you here today join me in this conviction. the jump $ tart coalition is a leader among organizations seeking to improve the personal financial literacy of students from kindergarten to the university level. in particular, through its biennial survey of high school seniors - - the results of which you will hear about in a few minutes - - jump $ tart has brought increased attention to the issue of financial literacy among youth in the united states. over the tenyear history of this survey, the data gathered have become some of the most useful measures of what young adults understand about finances. the federal reserve is strongly committed to jump $ tart ’ s mission to better educate america ’ s youth about personal finance. on the regional level, many federal reserve bank staff members work closely with the state coalitions to help achieve this mission. in fact, there is at least one specialist in economic education at each of the reserve banks and at most of the branches. many of these specialists offer training seminars to help educators teach economics and personal finance in their classrooms. the federal reserve also supports a variety of programs and initiatives to increase financial literacy. i want to take a moment to describe just two of these initiatives. the first is a student competition called the fed challenge, a program designed to teach students about monetary policy and the national economy. among other activities, students in this competition take the roles of federal reserve

whether the business owner gained or lost wealth. families with businesses primarily engaged in mining or construction – among small businesses in the survey, this was overwhelmingly construction - related businesses – were the most likely to see a substantial decline in net worth ( figure 11 ). in contrast, families with a wholesale or retail business were more likely to see a substantial gain. those involved in utilities, transportation, and services – in the survey, this was predominantly services – saw the largest gains and the largest losses, but losses exceeded gains for the group. only 82 percent of the consumers who reported owning a business in 2007 also reported owning a business in 2009. and some of those who remained business owners may have scaled back their operations while awaiting recovery. we do not have the detail necessary to assess the importance of reduced operations directly, but we have some suggestive bis central bankers ’ speeches evidence. for businesses that were in operation in both 2007 and 2009, we see decreased median and mean business incomes for owners who saw their wealth fall and the reverse for owners whose wealth rose. some of the decrease in activity may be driven by a decline in demand for services, but some may come from credit constraints. for a variety of reasons, we cannot look directly at changes in credit availability for business owners and their businesses, but we can look at two indicators for the owners who had a continuing business in 2009. some business owners use proceeds from personal loans for business purposes or use personal assets to secure business loans. in other cases, the business itself may apply on its own. if the business is a sole proprietorship, there is no legal distinction between business and personal borrowing, but business owners still may view their personal and business debt separately. the 2009 scf panel interview asked participants to report separately whether they had applied for personal and business loans during the two - year period. if they had, it asked whether they had been turned down for a loan. the survey also asked whether they had wanted to borrow for personal or business purposes but had been so convinced they would be turned down that they did not apply. the data show a substantial level of personal and business applications both for owners whose wealth rose and for those whose wealth fell over the period of the scf panel. the level of personal applications was slightly higher for those whose wealth increased over the period, and their applications were more likely to have been approved ( or they were less likely to have believed they would have been denied ) ( figure 12 ). the pattern of personal loan denial