Since the credit crunch crisis began in the US in summer 2007 and subsequently spread across the developed world, financial education and inclusion have climbed up the EU political agenda.
Increasing public awareness of financial instruments is considered key to preventing renewed market turmoil. It goes without saying that helping the average citizen to understand what a hedge fund is or which pension scheme to choose becomes is a harder task in areas where large parts of the population are still without bank accounts or saving facilities, considered the ABC of financial services.
To address these shortfalls, the European Commission will organise a high-level conference next Wednesday (28 May) in Brussels on how to promote financial inclusion, at which the report obtained by EurActiv will be presented.
Its main findings indicate that in the so-called 'EU 10', which includes the new European member states excluding Bulgaria and Romania, on average 47% of the adult population has no bank account. In the EU 15 the percentage drops to 10%, but is higher among young people and in certain countries like Italy, where it has been calculated at almost 15%.
The report therefore proposes the establishment of a "right of all citizens to a transaction bank account" or at least to "a defined minimum package of transaction bank services" as a means of addressing the issue.
Access to credit is another issue dealt with by the report. While it is clear that lax practices in loan offers led to the current US financial crisis, it is also true that in some cases credit exclusion goes hand-in-hand with financial ignorance and social exclusion.
In order to counter these situations, the study embraces the American approach based on cooperation between big and small banks to facilitate access in less developed areas. "Community banks can play the role of an intermediary between the big banking networks and clients with modest revenues" so as to spread the risk, underlines the study.
It is also suggested promoting corporate social responsibility through a "compensatory financing system", ensuring that banks which apply it are not disadvantaged compared to other financial institutions.