CBC governor calls for compulsory financial literacy lessons

Central Bank of Cyprus (CBC) governor Christodoulos Patsalides has called for the introduction of a standalone and compulsory financial literacy course in schools, arguing that stronger financial education is essential to prepare young people for the challenges of an increasingly complex economic environment. In an article entitled “Investing in the financial literacy of the new generation”, the governor said that the issue of financial education and its role in shaping responsible attitudes and behaviours has become increasingly prominent in public debate in recent years. He said this attention is fully justified. Patsalides pointed out that Cyprus consistently ranks among the countries with the lowest levels of financial literacy in the European Union. He added that young people record the weakest performances among all age groups. Referring to findings from the Organisation for Economic Cooperation and Development’s 2023 survey on Cyprus, he explained that only 58.8 per cent of young people achieve the basic level of financial knowledge. By comparison, 80.1 per cent of people aged between 40 and 49 reach the same benchmark. He also said that only 12.9 per cent of young people attain the minimum level of overall financial literacy, compared with 19.1 per cent among those aged 40 to 49. According to the governor, the overall indicator reflects people’s knowledge, behaviour and attitudes towards financial matters. “These figures leave no room for complacency,” he said. He explained that the findings represent far more than a statistical result. According to Patsalides, they reflect the limited financial education available within families, society and schools. He argued that they also expose the absence of systematic information, guidance and meaningful cultivation of financial knowledge and skills within the current educational framework. Against this backdrop, he recalled that the Cyprus Financial Literacy and Education Committee was established in June 2024. The committee is chaired by the CBC and includes the finance ministry, the education ministry, and the Cyprus Securities and Exchange Commission as principal members. Its primary objective is to implement the country’s National Strategy for Financial Literacy and Education. One of its key strategic goals is to strengthen financial education in both public and private education. Patsalides said the committee has created new conditions for improving financial literacy in Cyprus. He stated that this comes at a time when concepts such as saving, borrowing and investing have a decisive impact on citizens’ quality of life and future prospects, particularly for young people. The governor warned that young people are increasingly required to manage money in an environment where access to credit, online shopping and investment applications is immediate and often uncontrolled. He cautioned that such convenience can lead to poor decisions, including overconsumption, irrational borrowing and exposure to high-risk investments without adequate understanding of the risks involved. Patsalides also highlighted the challenges created by the digital era. He said that investment options ranging from instant trading applications to cryptocurrencies are often presented on social media platforms as easy opportunities for profit. “Financial decisions are being made faster than ever, but not necessarily with the required knowledge or risk assessment,” he said. He also warned that the strong presence of non-specialised sources of information increases the danger of misinformation. According to the governor, this creates the false impression that financial choices are simple and free of consequences. “In reality, however, they require knowledge, judgement and responsibility,” he said. He added that these are skills that cannot be taken for granted and must instead be cultivated systematically. For that reason, Patsalides argued that financial education cannot remain fragmented or occasional. He said experience demonstrates that only systematic and structured teaching can deliver meaningful results. “The establishment of a standalone and compulsory financial literacy course as a distinct part of the school curriculum is now a necessary choice,” he said. He explained that such a course would enable students to acquire fundamental knowledge and skills methodically. It would also help them connect theory with everyday life and develop responsible financial behaviour. Students would have the opportunity to practise real-life scenarios ranging from preparing budgets to assessing investment choices. According to the governor, this would better prepare them for adult life. What is more, Patsalides said international recognition of this approach is also increasing. He explained that a new international policy study on financial education in schools is currently being prepared through the OECD’s International Network on Financial Education, in which the CBC participates as a full member. The study will document the current global landscape, highlight best practices and propose ways to further strengthen education for young people. He added that a growing number of education systems across Europe are moving towards more structured and coherent financial education programmes. Patsalides welcomed the initiative undertaken by Education Minister Athena Michaelidou to strengthen financial education in public schools. He also welcomed ongoing plans for its systematic and structured integration into the curriculum. He said that a six-hour intervention programme focusing on personal budgeting, saving and borrowing has already been implemented nationwide for third-year gymnasium students since the 2024-2025 school year. During the 2025-2026 school year, the programme was expanded through targeted three-hour interventions for first and second-year gymnasium students. He added that financial education has already been incorporated into health education classes for sixth-grade primary school pupils. According to the governor, the current approach and plans for a comprehensive standalone course address a genuine need of modern society. He said they are also aligned with European initiatives aimed at supporting and strengthening financial literacy. Patsalides explained that the committee’s next steps in the field of school education will focus on consolidating and upgrading these efforts. He said work is progressing on the development of comprehensive and practically oriented educational material through the committee’s thematic working group on public and private education, which is chaired by the education ministry. He explained that the material to be introduced during the next school year will cover subjects beyond the basic concepts. These will include taxation, investments and the relationship between risk and return. Over the medium term, the material is expected to expand further to include pensions, insurance and digital financial skills. Patsalides also said that the committee’s national financial literacy website is expected to become fully operational in the near future. He explained that it will serve as a central information and education portal. The platform will provide reliable content, practical tools and guidance to support everyday financial decision-making. At the same time, educational material aimed at strengthening the knowledge of adult citizens is being developed. Targeted initiatives with a practical focus are also being planned for vulnerable groups. According to the governor, the objective is to move from theoretical understanding to the meaningful application of knowledge in everyday life. “The need for a substantial strengthening of financial literacy remains more timely than ever,” he said. “As a society, we must look ahead with calmness and foresight and invest in knowledge that protects young people against the challenges of the modern economic reality,” he added. “The establishment of a standalone and compulsory financial literacy course is not merely another educational option, but a conscious investment in our collective future, in better-informed citizens, more resilient households and a more stable economy,” he said. He stressed that the decisions shaping the course of a country begin with the knowledge possessed by its citizens. Quoting Nelson Mandela, Patsalides stated that “education is the most powerful weapon which you can use to change the world”. He said this principle represents the foundation for a more sustainable and responsible economic future.