How banks can combat financial illiteracy by teaching kids business and finance
Okay, bankers hate regulation. We get that. But the global economic crisis has given people some very real reasons to push for regulation. And understandably, bankers and their advocates have pushed back. We're not going to say either side is wrong, but we will say both sides are missing a very important point.
A prominent banker suggested that every bank adopt one or more local schools.
A particularly prominent banker — a CEO of a major financial institution, no less — caught the point right away. In a private conversation with one of us, he said that the one thing the banking industry should be required to do is sponsor mandatory financial literacy education.
This is why: The global economic crisis had many causes — beyond greed and a few bad actors in the financial services sector — and one of them was the entrenched financial illiteracy of the borrower. Borrowers who should have known better asked, "What's the monthly payment?" instead of "What's the interest rate?" That's dangerous, especially when so much of the economy depends on responsible and sustainable consumer spending.