rightly require, the information disclosed to the public is not deceitful or manipulative, an information overflow might generate confusion and ultimately hamper customers ’ decision making. indeed, financial education programmes developed as a mere delivery of information may fail to reach the expected goal. the limited available evidence seems to suggest that education strategies are most effective if those trained are actively involved and experience effective gains and losses from simulated decisions. it is worth emphasising again that the success of financial education programmes largely depends on people ’ s awareness of their level of financial literacy and of the enormous impact this will have on their medium - to - long term well - being. people who are aware that their level of financial literacy is low may be more receptive to educational programmes and proactively strive to acquire the information and knowledge they need. financial educators should use mass media and effective communication strategies to develop such awareness. knowledge of the costs associated with short - sighted financial decisions is also very important. consumers are used to shopping around for relatively sophisticated goods or for important investments ( such as in real estate ). in fact, the cost of not doing so is evident to them. customers need to be encouraged to shop around even for banking and financial products and services. 4. the bank of italy ’ s financial education initiatives in italy, financial education has only recently entered the limelight. as one of the first institutions to point out the importance of this issue to the country, the bank of italy has, on several occasions, stressed the need for investors to acquire appropriate and up - to - date financial education as one of the key components of comprehensive action to foster economic and business growth. since then several initiatives have been launched. in the last two editions of the bank ’ s shiw ( for 2006 and 2008 ) specific questions were included to measure the financial literacy of the italian population ( ability to read a bank statement, calculate variations in purchasing power, measure bond yields, calculate accrued interest, understand the relations between the various securities and distinguish between types of mortgage loan ). as mentioned before, the findings were in line with those of other advanced countries and confirm the need for financial education programmes : about 50 per cent of italian households do not possess the basic knowledge required to make informed decisions on the most common financial transactions. since 2007, the bank of italy ’ s website contains a section dedicated to financial education. it attempts to provide easily understandable information on the main banking products as well as clear explanations of banking, economic

are limited. at the end of 2004 household debt was equal to 28 per cent of gdp in italy, compared with a euro - area average of 55 per cent and about 90 per cent in the united states and the united kingdom. partly as a consequence of subdued investment, the financial conditions of firms have remained good on the whole. in 2004 firms ’ operating profits were higher in relation to value added than during the cyclical downturn of the early 1990s. however, the data for the sample of around 40, 000 non - financial corporations surveyed by the company accounts data service show a fall in profits in the period 2000 - 03, notably in the textile, clothing and transport equipment sectors. firms ’ interest expense has diminished thanks to the reduction in interest rates, due in part to the lengthening of the average maturity of corporate debt. leverage is seven percentage points below the level of the 1990s ; the average maturity of italian firms ’ bank debt is gradually approaching that prevailing in the other european countries. there continues to be rapid growth in financing to categories of firms that in the past encountered greater obstacles in gaining access to credit during cyclical downturns ; credit to firms resident in the south of italy increased by 8. 5 per cent, two points more than the national average. in the period 1996 - 2004 the value of mergers and acquisitions between banks in italy accounted for 27 per cent of the euro - area total, compared with the italian banking system ’ s roughly 14 per cent share of euro - area bank assets. the far - reaching transformation of the banking system since the middle of the 1990s has had positive effects on operations. since 2001 loan quality has remained unchanged despite the weakness of the economy. at about 1 per cent the ratio of new bad debts to outstanding loans is very low by comparison with the past. households and firms have benefited from part of the banking system ’ s efficiency gains through more favourable rates on deposits and loans. in 2004 banks ’ profits amounted to €11 billion, or 10. 7 per cent of capital and reserves, compared with 6. 7 per cent in 2003. contributing to the improvement in the results for the year were the decline in value adjustments to loans and a significant increase in net non - recurring income. operating costs diminished by 0. 5 per cent with respect to 2003. the ratio between costs and revenues was in line with the european average. the growth in self - financing and capital increases have strengthened the banking system ’ s capital base. at the end of 2004 italian banks