Financial literacy

Why the CNB promotes financial literacy

At the dawn of the new millennium we are witnessing unusually rapid growth in financial services and a parallel change in the behaviour of the Czech population. The traditionally conservative approach to saving and borrowing is gradually changing. There is a growing tendency towards fast consumption and an increasing willingness to take on debt. However, these tendencies are not entirely free of risk. They entail an urgent need for the public to have at least a basic knowledge of the world of finance.

The young population, which is generally less conservative and less risk averse, is particularly vulnerable. Sooner or later, every pupil or student will ask himself the following sorts of questions: Should I try to set up a business or would I rather be employed? Should I buy a place of my own or would I rather rent? And where does the money come from anyway? To be able to answer these questions properly, one needs at least a basic knowledge of the economy and money. The Czech Ministry of Education, Youth and Sports has decided to strengthen financial and economic education in the general curriculum. The CNB regards financial education of the young generation as a highly important area. It has therefore decided to get involved in this field.

Step 1: Supporting a pair of exercise books entitled “Financial and Economic Literacy” and an accompanying teacher’s manual

The first step was a decision to support intellectually and financially the publication of a pair of exercise books entitled “Financial and Economic Literacy – Exercise Book 1” and “Financial and Economic Literacy – Exercise Book 2” (and an accompanying teacher’s manual). This pair of exercise books is the first-ever comprehensive teaching aid in the field of economic and financial literacy for children in their early teens that fully covers the Financial Literacy Standards of the Ministry of Education, Youth and Sports. The Czech National Bank bought and distributed to schools more than 4,000 copies of the teacher’s manual in 2008 (for more information about the CNB’s specific support in this area see this press release). Schools that decide to use these exercise books can purchase them (as well as the teacher’s manual) from retailers in the required quantity.

• Contents of the Teacher's book (pdf, 17 kB)
• Examples from the Workbook 2:
  • example 1 (pdf, 59 kB)
  • example 2 (pdf, 90 kB)
  • example 3 (pdf, 77 kB)

Step 2: Helping to organise seminars for teachers

The second, follow-up step in support of the above learning materials is the co-organising of financial literacy seminars for teachers in various regions of the Czech Republic in partnership with educational institutions accredited by the Ministry of Education, Youth and Sports. These institutions include in particular the National Institute for Further Education (a seminar entitled “Financial literacy II – Financial literacy in civics and other subjects”, not to be confused with the “Financial literacy” seminar organised by the same institution) and with Masaryk University in Brno, as well as other centres for further education of teaching staff. The seminars are run by CNB staff and, if necessary, by other qualified lecturers. The Czech National Bank plans to co-organise more of these seminars in the future, depending on continued demand from schools. The seminars are usually organised for groups of teachers delegated by various schools, but seminars can also be organised at specific schools for the entire teaching staff. A list of all past and planned seminars is available in Czech version.

The seminars are intended mainly for teachers at primary schools and non-economic secondary schools and teaching staff of other educational institutions. The seminars focus on concepts and related principles of financial and more general economic literacy such as: assets/liabilities, building savings schemes, insurance, annual percentage rates, maturity, principal, fees, risk, liquidity, inflation, nominal and real annual percentage rates, consumer credit, mortgages, American mortgages, interest-free periods on credit cards, APRCs, interest rate fixation, debit/credit payment cards, methods of making payments from banks, time deposits, current accounts, the role of money in the economy, circulation of goods and services in the economy including banks, etc. The seminars also cover selected topics at secondary school level (pension schemes, shares, public budgets). Attention is also paid to worked examples based on a pair of exercise books entitled “Financial and Economic Literacy” and an accompanying teacher’s manual, all written by the husband and wife team of M. and E. Skořepa.

We would like to inform schools located outside Prague that participation in accredited seminars qualifies as a basis for simplified drawing of funds via the templates of the Ministry of Education, Youth and Sports (Activity VI/3 – Training of teaching staff in teaching forms and methods focused on the development of the financial literacy of primary school pupils).