Bulgaria 'Has Huge Problem with Financial Illiteracy'

Prof. Steve Hanke during the conference titled "Financial Education for Sustainable Economy" held May 11, 2015 in Sofia, Bulgaria. Photo by BGNES

There is a huge problem with financial illiteracy in Bulgaria, renowned economist Prof Steve Hanke has opined.

Hanke, known as the father of Bulgaria's currency board, is taking part in a conference titled "Financial Education for Sustainable Economy" and held on May 11 in Sofia, Bulgaria.

In his words the state tends to contribute to the process of "politicizing" financial education.

Concepts offered by the state are often either false or irrelevant, and financial education has to be in the hands of private companies, Hanke believes.

A "private association" funded by businesses can work to this end, handing out each year awards to institutions and people who contributed to financial literacy, according to the prominent professor whose words are quoted by Investor.bg (one of the media outlets co-organizing the conference).

Hanke, a professor of Applied Economics at The Johns Hopkins University in Baltimore added, however, that financial education had many flaws internationally, and not just in Bulgaria, with only 60% of Americans successfully completing a test on financial knowledge.

The "do-it-yourself" economics is what he pointed as the main reason, as people believe they have much more knowledge of economics and finance than they really do.

He concluded that if people are to be financially educated, they should be able to run their own assets, understand how banks work, what investment, loans, insurance and taxes are. Hanke argued that only those who are able to make a well-informed decision can be happy and lead a prosperous life.

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