Financial Education in the Wake of the Crisis

The past year has been tumultuous for our nation’s financial system, for our economy, and, of course, for many of our citizens. Financial transactions entered into by those citizens, and the financial market securities derived from those transactions, were at the heart of the turmoil. With the economy and financial markets apparently on a recovery path, this is a good time to reflect on the meaning of this whole episode for financial education. In particular, what lessons should educators take away to help people make more informed financial choices, not only today but throughout their lifetimes?1 I don’t intend to prescribe specific curricula changes or pedagogical approaches. But I would like to offer some more general thoughts on what I think would be a useful direction to take as we learn more about the causes of the financial crisis – and about the decisions made by households during the period leading up to the crisis. As always, the views expressed today are my own and not necessarily those of the Federal Reserve System.