Financial Literacy
From Open Risk Manual
Revision as of 14:27, 25 September 2021 by Wiki admin (talk | contribs)
Definition
Financial Literacy is the general level of understanding by different segments of the population of how Finance and the Financial System work. At the level of an individual this includes
- including individual abilities to participate in informed ways with adequate understanging of Risk and opportunities
- utilize the full spectrum of available instruments
- be 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 actually includes more broadly the competency of any individual in relation to their role in the financial system. E.g. members of Internal Audit or other regulatory functions.
