Briefing by the Russian G20 Sherpa Ksenia Yudaeva
After addressing the conference "Empowering Consumers of Financial Products and Services through Improved Financial Literacy and Effective Consumer Protection Systems", the Russian G20 Sherpa Ksenia Yudaeva talked to journalists.
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Ksenia Yudaeva: In its work, the G20 spares much time for the development policy. Financial literacy, financial inclusion and access to the services of financial institutions form a substantial part of the development agenda.
For Russia this as a traditional issue. Russia raised it for the first time during its G8 Presidency in 2006. Since then the G8 and the G20 have been quite active in developing this issue. It is difficult to overestimate the importance of it. I come across it every other day, and in my opinion it is becoming even more and more important. In 2006, it sounded rather abstract, but now we understand the essence of it.
First, over 2 billion people worldwide have no access to financial services, so this segment must be developed. But what is even more important is that when people receive access to financial services, we must make sure that they are able to use them. Currently, Russia views this as a huge problem. On the one hand, we can see that financial services, especially those for the public, including loans and micro-loans, are continuing to develop rapidly in Russia. On the other, people either tend not to use these services, or do not make sufficient use of them. Or vice versa: they make excessive use of these services, go to extremes and take out exorbitant loans because they don't understand how to work with these financial instruments. And this is closely linked with financial education and, consequently, with consumer rights protection. These issues are extremely important for a wide range of countries, and definitely a priority for Russia nowadays.
By the way, right now we are discussing the Russian strategy and Russian projects in the field of financial literacy. What we should bear in mind is that the development of the financial markets, creation of new instruments and the determination of the content of the old ones - all these issues pose challenges even to those countries which we consider to be financially literate. I would like to mention one example. I have just talked to the representatives of Her Majesty Queen Maxima, the new Queen of the Netherlands. She is watching this work all over the world, taking care of the G20 Global Partnership for Financial Inclusion, and she is very active in the G20 process. We were discussing an interesting phenomenon that there were many children in the industrialized world, who had never seen bank notes or paper money, and had no idea about basic budget planning concepts and family finance. This new and unexpected challenge has appeared out of nowhere. And, of course, all these situations need to be thoroughly analyzed. We must adjust state programs and school curricula to address these challenges. We should probably convey the important ideas using videos and cartoons for these purposes. On the one hand, we must train the public to use these services to their own advantage rather than to their detriment. And on the other hand, we must combine our work on developing the financial systems by due protection of financial services consumers rights.
Question: Can we reflect on it as on an item of economic stimulus measures which are now being actively discussed and which the Ministry of Economic Development is expected to draft?
Ksenia Yudaeva: Definitely, the development of the financial sector, including the accessibility of financial services, is without any doubt an example of the economic stimulus measure, simply because it stimulates demand. On the other hand, uncontrolled activities that disregard consumers' interests could have antisocial consequences, including negative economic consequences, because this would contribute to greater volatility. Therefore, this issue is both social and economic.
Question: How serious are the risks posed to the Russian economy by the global trend of increasing profitability?
Ksenia Yudaeva: If I am not mistaken, you are talking about the extent of hypothetical global economic risks posed by the fact that the Federal Reserve System will eventually stop its program of quantitative easing and will start raising interest rates and reducing their budget spending?
Certainly, all the developments of the previous week show that the risks could be quite substantial. Indeed, major fluctuations are possible, and capital might leave those markets where high profitability was expected. Frankly speaking, I believe that it might affect Russia, though it might be less vivid than in other particular countries that used to be quite popular among people seeking to make a profit, including Australia. Or we could consider the situation with gold, rather than some country, and compare it with other instruments that attracted investments. But there are definitely various risks here, given the extent to which crude oil and some other resources served as instruments for hedging and seeking out profit. In this connection, Russia could also be affected, the risks are obvious. And, of course, we need to understand how to mitigate these risks. But, on the other hand, I believe that the Federal Reserve System will not abandon this policy for the time being. Therefore, all this panic is rather premature. Thank you.