Financial Literacy

From Open Risk Manual


Financial Literacy is the general level of understanding by different segments of the population of how Finance and the Financial System. It is a combination of financial awareness, knowledge, skills, attitudes and behaviours necessary to make sound financial decisions and ultimately achieve individual financial well-being [1]


At the level of an individual this includes:

  • individual abilities to participate in informed ways with adequate understanging of Risk and opportunities
  • utilizing the full spectrum of available instruments
  • being able to express informed opinions and direct the overall evolution of the financial system

At an aggregate level financial literacy means collective mindsets and behaviors that emerge at the system level as the result of interactions of many individuals

Issues and Challenges

  • Financial literacy is usually discussed in the context of Personal Finance and Financial Inclusion but includes more broadly the competency of any individual in relation to their role in the financial system. E.g. small and medium business owners, or members of Internal Audit or other regulatory functions.

See Also


  1. Recommendation of the OECD Council on Financial Literacy, 29 October 20201