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Financial Literacy: Money Management for Creating a Life of Well-Being February 14, 2020 AMAMIYA Masayoshi Deputy Governor of the Bank of Japan 1 Bank of Japan

Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

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Page 1: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Financial Literacy:

Money Management for Creating a Life of Well-Being

February 14, 2020

AMAMIYA Masayoshi

Deputy Governor of the Bank of Japan

1

Bank of Japan

Page 2: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Chart 1 Financial Literacy Survey

If interest rates rise, what will typically

happen to bond prices?

1. They will rise

2. They will fall

3. They will stay the same

4. There is no relationship between bond

prices and interest rates

5. Don't know

I set long-term financial goals and

strive to achieve them.

Agree Disagree

True/false questions on "financial knowledge

and financial decision-making skills"

Questions on "characteristics of behavior

and attitude"

1

1 2 3 4 5

Page 3: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

30

35

40

45

50

55

60

65

70

18-29歳 30歳代 40歳代 50歳代 60歳代 70歳代

2016年 2019年

Chart 2 Correct answers to true/false questions (1)

By region By age group

Nationwide average: 56.6% (2016 survey: 55.6%)

%

2

Age 18-29 30s 40s 50s 60s 70s

%

50

51

52

53

54

55

56

57

58

59

60

2016年 2019年

Page 4: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

50 60 70 80

フィンランドフランス

ニュージーランドノルウェー香港(中国)オーストリアベルギーカナダ

ポルトガル韓国

日本

OECD Survey (11 common questions)

Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies.

Chart 3 Correct answers (2): International comparison

・・・・・・

%

Inflation (true/false question): "High inflation means

that the overall cost of living is increasing rapidly"

Compound interest: "Suppose you put 1 million yen

into an account with a guaranteed interest rate of 2% per

year. If no further deposits or withdrawals are made, how

much would be in the account after 5 years (disregarding

tax deductions)?"

Diversified investment (true/false question): "Buying a

single company's stock usually provides a safer return

than a stock mutual fund (a financial product for

investing in stocks of several companies)"

Questions with relatively low percentage of correct

answers in Japan

・・・・・・

3

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]

[9]

[10]

[22]

Finland

France

New Zealand

Norway

Hong Kong (China)

Austria

Belgium

Canada

Portugal

South Korea

Japan

Page 5: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Chart 4 High scores vs Financial trouble

0

2

4

6

8

10

12

50 52 54 56 58 60 62

Th

ose

wh

o e

xperi

en

ced

fin

an

cial tr

ou

ble

(%

),

nati

on

wid

e a

vera

ge: 6.7

Correct answers (%), nationwide average: 56.6

Percentage of correct answers and

proportion of respondents who had

experienced financial trouble

0

100

200

300

400

500

600

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

cases

Number of recorded

cases of special fraud

(left scale)

Amount of damage

caused by special

fraud (right scale)

100 mil. yen

Source: National Police Agency, Cases of Special Fraud Reported and Arrested,

2018 (Final Figures).

(Reference) Damage caused by special fraud

4

Page 6: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

I would invest,22.7 (21.4)

I would not invest, 77.3(78.6)

I invested such an amount of money after making comparisons, 17.1 (15.6)

I invested such an amount of money without making any comparison, 8.4 (9.2)

I have not invested such an amount of money,74.5 (75.2)

Suppose that, if you invested 100,000

yen, you would get either of the

following at a 50% probability:

- a capital gain of 20,000 yen, or

- a capital loss of 10,000 yen.

What would you do?

Have you ever invested an amount of money

that exceeded your monthly living expenses?

When you invested such an amount in a

financial product most recently, did you

compare it with other financial institutions'

products or other types of financial products

in order to choose one that was considered

to be the most beneficial?

% %

Chart 5 Investment stance

Note: Figures in parentheses represent the

results of the 2016 survey.

Risk-taking stance Money investment

5

Page 7: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

To what extent do you intend to hold financial products that have a risk

of falling below par, but are expected to be profitable, over the next one

or two years?

Two-or-more-person households Single-person households

Chart 6 Investment stance (Survey on Household Finances)

1.7

1.3

1.5

1.7

1.9

1.8

2.1

2.0

2.5

2.2

13.6

13.9

12.5

14.1

15.4

16.4

15.3

15.4

15.6

17.4

83.2

82.9

84.5

82.6

81.5

80.2

80.7

80.8

80.5

78.9

1.5

1.9

1.5

1.6

1.2

1.6

1.9

1.8

1.4

1.5

0% 20% 40% 60% 80% 100%

2010年

2011年

2012年

2013年

2014年

2015年

2016年

2017年

2018年

2019年

そうした商品についても、

積極的に保有しようと思っている

そうした商品についても、

一部は保有しようと思っている

そうした商品を

保有しようとは全く思わない

無回答

8.6

8

7.6

9.7

10.2

10.5

10

9.8

10.8

11.4

30

27.6

29.8

26.8

25.8

25.7

25.2

26

25.7

27.4

61.4

64.4

62.6

63.5

63.9

63.8

64.9

64.3

63.5

61.2

0% 20% 40% 60% 80% 100%

2010年

2011年

2012年

2013年

2014年

2015年

2016年

2017年

2018年

2019年

6

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

1.7

1.3

1.5

1.7

1.9

1.8

2.1

2.0

2.5

2.2

13.6

13.9

12.5

14.1

15.4

16.4

15.3

15.4

15.6

17.4

83.2

82.9

84.5

82.6

81.5

80.2

80.7

80.8

80.5

78.9

1.5

1.9

1.5

1.6

1.2

1.6

1.9

1.8

1.4

1.5

0% 20% 40% 60% 80% 100%

2010年

2011年

2012年

2013年

2014年

2015年

2016年

2017年

2018年

2019年

そうした商品についても、

積極的に保有しようと思っている

そうした商品についても、

一部は保有しようと思っている

そうした商品を

保有しようとは全く思わない

無回答

8.6

8

7.6

9.7

10.2

10.5

10

9.8

10.8

11.4

30

27.6

29.8

26.8

25.8

25.7

25.2

26

25.7

27.4

61.4

64.4

62.6

63.5

63.9

63.8

64.9

64.3

63.5

61.2

0% 20% 40% 60% 80% 100%

2010年

2011年

2012年

2013年

2014年

2015年

2016年

2017年

2018年

2019年

I have no intention of

holding such products.No answerI intend to hold such

products proactively.

I intend to hold such

products to some extent.

0 20 40 60 80 100 % 0 20 40 60 80 100 %

Page 8: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Chart 7 Funds for retirement

Understanding of one's own public

pension (those in their 50s)

71.2

50.5

49.3

48.7

37.4

28.8

49.5

50.7

51.3

62.6

0 20 40 60 80 100

加入している

公的年金の種類

年金の支給

開始年齢

年金受給の

必要加入期間

被保険者と

しての種類

受け取れる金額

知っている 知らない

%0

10

20

30

40

50

60

70

80

90

20代 30代 40代 50代 60代 70代

2016年 2019年

Percentage of respondents with a

financial plan for "living expenses for

retirement"

7

18-29 30s 40s 50s 60s 70s

Receivable amount

Category of insured person

Required number of years of payment

Age of starting to receive the pension

Category of public pension

%

90

80

70

60

50

40

30

20

10

0

%

Age group

I know I don’t know

Page 9: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Correct answers and behavior by occupation/age group

40

45

50

55

60

65

70

40 45 50 55 60 65 70

Average of all samples

Young adults

(age 18-29) Senior citizens

(age 60-79)

Adults

(age 30–59)

Participated in financial

education

Teachers

Students

(age 18-24)

Did not participate

in financial

education

Correct answers (%), average of all samples: 56.6

Chart 8 Effects of financial education

Th

ose

wh

o e

xhib

ited

desi

rab

le f

inan

cial b

eh

avio

r (%

),

avera

ge o

f all s

am

ple

s: 5

9.5

8

Page 10: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

Was financial education offered at

your school or college, or at your

workplace?

Did your parents or guardians teach

you how to manage your finances?

Financial education at school, etc.

Chart 9 Experience of financial education

Financial education at home

3.3(2.7)

1.8

1.4

1.2

1.6

1.4

12.5(10.7)

7.3

5.3

6.6

5.8

6.5

53.7(56.1)

70.6

75.7

79.5

83.9

84.2

30.5(30.5)

20.4

17.6

12.7

8.6

7.8

0% 20% 40% 60% 80% 100%

18-29歳

30歳代

40歳代

50歳代

60歳代

70歳代

受ける機会はあったが、自分は受けなかった受ける機会があり、自分は受けた受ける機会はなかったわからない

28.2(26.6)

21.5

18.4

18.4

18.3

18.3

43.5(43.3)

57.5

62.7

66.5

70.3

71.4

28.4(30.2)

21.0

18.9

15.1

11.4

10.3

0% 20% 40% 60% 80% 100%

18-29歳

30歳代

40歳代

50歳代

60歳代

70歳代

機会はあった 機会はなかった わからない

9Note: Figures in parentheses represent the results of the 2016 survey.

70s

60s

50s

40s

30s

Age 18-29

70s

60s

50s

40s

30s

Age 18-29

Yes, but I did not participate in the financial education offered

Yes, and I did participate in the financial education

No

Don't know

Yes No Don't know

0 20 40 60 80 100 % 0 20 40 60 80 100 %

Page 11: Financial Literacy: Money Management for Creating a Life ... · OECD Survey (11 common questions) Source: OECD (2016), OECD/INFE International Survey of Adult Financial Literacy Competencies

40

50

60

70

80

90

100

4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 121

2018 2019

10 thous.

2017 2020

Pamphlets for respective age groups

Chart 10 Tools for financial education

Primary and

secondary school

students High school

students

University students

Adults

PR magazine Kurashi-juku Kin’yu-juku

(“First steps toward financial literacy for

everyday life”)10

Nu

mb

er

of

pag

e v

iew

s

Website of the Central Council for

Financial Services Information