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  • The Conference “Empowering Consumers of Financial Products and Services through Improved Financial Literacy and Effective Consumer Protection Systems”

Conference on improving financial literacy and enhancing effective consumer protection systems was held in Moscow

The Conference "Empowering Consumers of Financial Products and Services through Improved Financial Literacy and Effective Consumer Protection Systems" organized under Russia's G20 Presidency with the support of the World Bank and the Organization for Economic Cooperation and Development (OECD) was held on June 13-14, 2013 in Moscow.

The meeting was attended by Russian G20 Sherpa and Chief of the Presidential Experts' Directorate Ksenia Yudaeva, Deputy Finance Minister of the Russian Federation Sergei Storchak, Head of the Federal Service for Supervision of Consumer Rights Protection and Human Welfare of Russia Gennady Onishchenko, and World Bank's Country Director for Russia Michal Rutkowski.

Her Majesty Queen Máxima of the Netherlands, UN Secretary-General's Special Advocate for Inclusive Finance for Development (UNSGSA), Honorary Patron of the G20 Global Partnership for Financial Inclusion (GPFI) welcomed the participants of the conference. In her address she thanked Russia, the World Bank and the OECD for the great opportunity to exchange best practice in this area, stressing that the rates at which financial services and effective consumer rights' protection are expanding are of enormous significance for the development of the modern market economy and play a key role in ensuring financial stability and economic growth and development. "It is encouraging that 35 countries already have financial education strategies in place," said HM Queen Maxima, "and we ought to continue working on this".

In his remarks, Deputy Minister of Finance Sergei Storchak noted that, according to the UN, over one-third of the world's population still has no access to basic financial services that are required for buying life and health insurance, making savings for children's education, and raising capital to start a business.

"Russia is no exception. Therefore, as part of our G20 Presidency, we came up with a system-wide approach that combines the increased availability of financial services, better consumer protection and greater financial literacy," Mr. Storchak said. Notably, the goal is to create hands-on tools that have been designed in collaboration with the World Bank and the OECD as part of the Russia Financial Literacy and Education Trust Fund. They help to improve the protection of consumers' rights, enhance the availability and the quality of financial services, and provide consumers with an opportunity to learn basic financial skills.

According to Ksenia Yudaeva, the Russian Sherpa in the G20 and Chief of the Presidential Experts Directorate, Russia chose to discuss financial education, consumer protection and expanded access to financial services as priority discussion topics for the period of its presidency.

"Greater financial literacy increases productivity, creates jobs and improves the quality of life. Altogether, this promotes the economic growth," Ms. Yudaeva said.

International studies have shown that a higher level of financial literacy and effective consumer rights protection mechanisms are prerequisites for expanding equal access to financial services and promoting stable and effective financial arrangements. Particular focus should go towards protecting the rights of financial services consumers.

According to Gennady Onishchenko, Head of the Federal Service for Supervision of Consumer Protection and Welfare, Russia should focus on using more effective methods for implementing the Guidelines for Protecting the Consumers of Financial Services adopted by G20 Leaders to establish a system-based approach towards improving the existing forms and methods of protecting consumer rights.

This work should be part of a socially responsible and important function of a law-based state. In his remarks, Mr. Onishchenko reiterated the importance of the Government's initiative to launch the Promoting Financial Literacy and Education in the Russian Federation project.

During the first day of the conference, the conference participants had the chance to learn about Russian and global experience of raising the level of financial literacy. The first session focused on the OECD/INFE High-level Principles on National Strategies for Financial Education endorsed by G20 Leaders. Andre Laboul, the Chairman of the OECD International Network on Financial Education and the Head of the OECD Financial Affairs Division, presented a report on this subject.

The conference participants were particularly interested in the achievements of the countries that have successfully developed and implemented comprehensive national strategies in financial education. Presentations were made by Deputy Director of the Department of Financial Education of the Brazilian Central Bank Marus Vasconcelos Freire, Spokesperson for the US Treasury John Harley and Deputy Director of the Department of International Financial Relations of the Ministry of Finance Anna Valkova.

Teaching basic financial skills and competence to young people has also drawn the attention of the conference participants, as it is a priority issue for the majority of national strategies on financial education.

The panel on this subject considered recommendations to promote effective financial training at schools and to evaluate the needs of young people for financial education. The panel also looked at the experience of countries implementing specialised school programmes, as well as other innovative approaches.

Notably, school education is one of the most effective ways to teach new things to young people, but any programme, be it a school or another institution, must be fun and use tools that are adapted to the needs of young people.

The conference participants focused particularly on the tools and techniques used for measuring the financial competence of the consumers. Such tools and techniques are used to monitor growth and to evaluate performance results over extended periods of time so that programmes can be adjusted accordingly. Delegates from South Africa and Mexico shared their expertise with the participants.

The second day of the conference focused on building effective financial consumer protection.

Establishing an effective framework of consumer protection is a necessary aspect of a financial literacy strategy. It will help to promote consumer confidence and to achieve responsible and equitable financial inclusion, as well as financial stability.

Conference participants were updated on the work by the G20/OECD Task Force to develop effective approaches to supporting the implementation of the G20 High-Level Principles on Financial Consumer Protection and on the preliminary results of the World Bank - FinCoNet Global Survey for Financial Consumer Protection.

They also discussed issues of information disclosure and transparency, instruments for dealing with consumer complaints and legal protection, as well as responsible lending.

Reports were delivered by Theodor Kockelkoren, chair of the G20/OECD Task Force on Financial Consumer Protection and member of the Management Board of the Netherlands Authority for the Financial Markets (AFM), Svetlana Mukhina, Deputy Head of the Consumer Protection Department at the Federal Service for Supervision of Consumer Protection and Welfare, David Ortega, member of Consumers International's expert group on financial services, and other conference participants.