Cumberland Advisors along with the Global Interdependence Center and the University of South Florida Sarasota-Manatee held their Second Annual Financial Literacy Day event in Sarasota, Florida on April 5th, 2018. The keynote speaker was Dr. Raphael Bostic, President and Chief Executive Officer of the Federal Reserve Bank of Atlanta.
He joined David Kotok on stage for a Q&A session and what follows is a fair transcript of their talk.
April 5, 2018
(*) Atlanta Fed president and CEO Raphael Bostic speaks about financial literacy and economic opportunity at the Second Annual Financial Literacy Day event held at the University of South Florida Sarasota-Manatee.
(*) Bostic thinks knowledge and information about how to fully participate in the financial system are essential to the success of our economy.
(*) He says limited basic math skills are correlated with lower levels of saving, less planning for retirement, and poorer understanding of credit. He cited research finding that only 32 percent of Americans could correctly answer three basic questions about personal finance.
(*) Bostic feels the Federal Reserve’s success in achieving its mandated goal of trying to maximize employment depends on the degree to which people have access to economic opportunity.
Bostic believes economic opportunity has four foundational aspects: equality, mobility, stability, and resilience.
(*) The Atlanta Fed, says Bostic, has been very active in helping to increase financial literacy and economic opportunity. Its economic education work has focused on schools across the Atlanta Fed’s territory, reaching more than 10,000 teachers a year.
(*) Bostic points out that the Atlanta Fed also partners with nonprofit organizations like Junior Achievement, Jump$tart, Academy of Finance, and Habitat for Humanity.
Good afternoon. It’s wonderful to be here today at this important conference.
I’d like to thank David Kotok of Cumberland Advisors for hosting the event and for inviting me to speak. I’d also like to recognize Bob Eisenbeis, a former research director at the Atlanta Fed, who is joining us today.
I think we can all agree that knowledge and information about how to fully participate in the financial system are essential to the success of our economy. But we have a problem. Limited basic math skills are correlated with lower levels of saving, less planning for retirement, and poorer understanding of credit, according to several economists. And there is reason to believe that many Americans are limited where math proficiency is concerned. In 2015, two scholars, Olivia Mitchell at the University of Pennsylvania and Annamaria Lusardi of George Washington University, found that only 32 percent of Americans could correctly answer three basic questions about interest rates, risk diversification, and inflation.
We have some big work to do on many levels—both individually and collectively.
Today, I’d like to explore the connections between financial literacy and economic opportunity—in terms of equality, mobility, stability, and resilience. Then I’ll talk about what we at the Atlanta Fed are doing to help foster financial literacy. I’ll close with some thoughts on what we can all do to keep the momentum going.
Before I begin, let me offer a quick caveat. I’m speaking only for myself today—not for anyone else in the Federal Reserve or for the Federal Open Market Committee, or FOMC.