Regional President Speech

,, National Council on Economic Education National Summit on Economic & Financial Literacy: Education for an Ownership Society "Developing a National Strategy" March 3, 2005 I am delighted to be here today and to share my thoughts on developing a national +o' strategy ec~f inancial literacy. The stellar roster of participants in this ~f conference and the high energy level in the room testify to the importance of meeting the f'r:J.~~~fy. educational challenges Giveq, these challenges, greater _ ,. ~ 10 ~ ~ I ~I- ~ l/J.IJ.f 0- IJ)-.A}~-.I , national coordination might seem a natural response. (£.at tkreeing on the desirability of a national strategy may be easier than agreeing on the specifics of such a strategy - in part because of the inherent appeal of programs developed locally and in part because of -- tensions between the basic economic education and :financial literacy topics themselves. I have long had a deep interest in education. lndeecl,eady-i~-saure as Pr~t--e·ftlie e eratlteserve-Bmtk:-eWastan, I co-chaired..th,e..,\;~...f.@r a new ~d T ora-Payzantrformerl y-Ass-istaH-t-SeGW-t-ai:y-fa0· Eeueaeiorrirrthe irst in ton A.~~ excellent in tlii"sro~ ~ ~ · ~ing Presi0ton Fed has increased my appreciation for the importance of~d and its moi:e practical~a-1 literaey. As a , wifr/'J±~~ member of the Federal Open Market Committee a~=d decisions about monetary policy, I have become acutely aware of the importance of an educated public that understands economic principles, most especially the concept of trade-offs and the importance of saving. At the same time, my interactions with community leaders, as well as my responsibilities as CEO of a sizeable employer, at least Source: LEB Version 2 This version 2/23 in the Boston community, have made me conscious of people's need to be more knowledgeable about their personal finances and to be more alert to confusing and -1~ nancial practices. The Federal Reserve System - The Board of Governors and the Reserve Banks - has provided economic education for a very long time. We have long recognized the need to tell the public who we are and what we do. To that end, we have opened our doors to school groups and others for tours of our operations and presentations on the activities of the Fed. Another early educational goal was keeping bankers informed about new banking regulations. Both of these needs remain. Over time, however, our objectives have become more diverse, responding to the changing environment, changing demographics, and changing Federal Reserve responsibilities, especially as they pertain to the Community Reinvestment Act and fair lending. To address these evolving demands, the 12 Reserve Banks have developed publications and programs oriented to the populations and needs of their individual Districts. Surveys of regional constituencies generally show very positive attitudes towards the Reserve Banks and the resources they provide, indicating that these publications and programs, as well as other outreach efforts, are well regarded. This regional focus is an important strength of a decentralized central bank; but at times, this sense of local ownership has made national collaboration a~¼y ~~ I am going to focus a bit on the Reserve Banks and how we have worked ~ / individually and together, not because we are a special case, but because leveraging successful programs developed by one party into use by many is not easy. I imagine that some in this room can attest to that. Source: LEB Version 2 2 This version 2/23 One example of a regional program of which we in Boston are very proud is the New England Economic Adventure. The Adventure is the flagship of the Boston Fed's efforts to make learning economic principles fun through the use of new technologies. The Adventure is an innovative economic educ~ex:ri~ c~~ ~ /4!--W video, interactive games, ~ive discussion/ It brings to life 200 years of regional economic history through the star s of some of New England's most creative ~ LJ/,J»J JiJ., entrepreneurs. The core message of e A enture is that innovation and increasing / -~An older. Jt· The Adventure has been a catalyst for greater collaboration with New England schools. Since opening its doors in late 2003, the Adventure has been incorporated into the social science programs of over seventy five hundred middle seheel-esd-high school ~e have had some delightful surprise not the least of which has been that the Jh~ Adventure/and its interactive website have bee embraced by programs as far away as Arkansas. ~~ cu_,\ Sometimes a regional bank program is adopted by other Reserve Banks. One prominent example is the Fed Challenge. Ten years ago the Federal Reserve Bank of New York developed the Fed Challenge, a high school-level simulation of deliberations at the Federal Open Market Committee. Teams of students create presentations in which they analyze economic conditions, debate alternative policy actions, and ultimately come to a recommendation. The success of the program in New York led the-l2r~ Source: LEB Version 2 3 This version 2/23 New-York-fed~ other Reserve Banks to participate in a national Fed Challenge, uJM~i t;/~ 1~.,LN with the winning teams at the District level competing.at.tae-Board ofemers before a panel composed of Reserve Bank Presidents and Governors. Three-Reserve-Banks, i~~onded to his initial invitation and now ~tonrt-of-eigb.t.Reserve -~- The Fed Challenge is probably the closest thing to a signature -~-~ Iv program fet1b.e Federal Reserve System. OAJ.a.dr.J /l, ~ aµ Iv.,µ, .. 1✓, 1 (Av~ t,Vv.J-fJ./U,. The R.€serve Banks have also collaborated to create ~ products land ~ ~~/IJ . ~,- sesviees-eae-tn take advantage of-new deli¥er-y-tools. The Federal ~~-¥e-Bmrks of BostonrChieago-aad San Francisco have worked together on ~ videos that educate the public about access to credit and identity theft. Edueatess-aseess the System have co~~e--v-ideo "The Fed Todcl)',~jrt:;~h~~le and struct~lre-Fedeffll-Rgser:y~_ _ System, a.s-¥rWl-aii:...m~>¥SJi;eB:}J-education portal personal finance resources for consu rs that is being ex ibited at national conferences. A Reserve Banks' educators group s also working to ublicize collective resources. W ~ C/M i--lt. ~ ~ ~ (y/--fi-1_)~ I t,.. These and other collaborations have maae Federal Reserve System programs and products more accessible and the joint products have been well-received. ~~~ .J/!t: -fq--d;,d err;.;t1x1 -----u~~~ 1 !<>-<l"!'lore .. be""""' mor;/,;,roorrnd:lii:nn:aattce::dd~s;ttrr·tttrttiee~mfi:g~~@~~~ffimjmO~ ,~e. On the one hand, there is broad agreement, cbGtb witbill the Sy~tein Md public have grown and changed. While public understanding of basic economic principles is very important, a confluence of forces including the increased availability of~ credit, a proliferation of financial products, and the changing demographic composition ~ ~ Source: LEB Version 2 4 This version 2/23 • /4vff.Jll.U ~W-A-~~ ~ ~ ~ #-1 of the population, have increase the importance of financial literacy. Tlfeie also Seems to ~ /,lt C. bL ·fit QJ.,1)J.J!l ~ ~ be fairly broad agreement that · · -- tResetve System ~ /~~ ng these needs. When it comes down to the specifics of implementing a more coordinated approach, however, there is considerable~ dis~t about what should be done or, indeed, the benefits of such coordination. While~i~~~~~~uf~ a~ I would like to comment on one particular impediment to collaboration - tensions between the priorities of those involved OJl , in more traditional economic education programs and advocates of a grea}rr focus tJ V/4.,LU1-,() ~ I~/~ f./ ~~ ~ personal finance. T-h~ ecially pronounced in the Federal.Reserve ~ but they are not unique to us. Unless they are recognized and addressed, they will hinder efforts to come together to form a national strategy. As I noted at the outset, the Federal Reserve's involvement in economic education goes back a long way. It is grounded in the Fed's monetary policy role, and the people who are involved in economic education are deeply interested in economics as a subject. They see themselves as educators and they often develop their own content material, focused on the Federal Reserve System or important economic principles. ~et dtd;t71Ct4 aud~~omic education programs 1s eotlege botlfle high schot'lbrtu:dents. '\ The Fed has also been involved in financial literacy for a long time, burthe ~~ current irnpetcts to-d-e-fflore dates-frem late 1980s and e&"ly 1990t Ir'grows out of the Fed's supervisory and regulatory responsibilities, particularly in the areas of fair lending and CRA. Leadership in financial literacy often comes from people who have backgrounds in supervision or in community development; and their traditional focus of concern has been the needs of minorities and low- and moderate- income populations. Source: LEB Version 2 5 This version 2/23 ,. (' They are more inclined to partner with other organizations to deliver programs; and their own financial literacy programs tend to be i:ta~ focused and practical. (JJ-~ In my jwig1;tlent/these two groups are coming at the same problem from different ends of the content and instructional spectrums. The work of both provides value and serves demonstrated needs. But getting them to work cooperatively within.a.single Reserve-Bank can be-difficult, aud the orientutiott-ef-:some ReserveBarrks more to econereic-education-aad-ethers more to :financial literacy~<#' collaboration more difficult. I suspect similar tensions exist outside-the Federub-ReseNe,;- possibly among the organizations here at this Summit. Yet this diversity of programs, orientations, and delivery styles should be an asset if approached in a systematic, coordinated way. Providing multiple access points or pathways to engaging students and the public in learning about economics and personal finance should increase the likelihood of success - of reaching more people and of their truly understanding what they are taught. Further, financial literacy and economic education reinforce one another. The immediacy of financial literacy and its ability to address the question "what is in it for me?" engages many students and teachers in a way that the more abstract economics does not. For many, financial literacy is less intimidating. But economics provides the context to compare different financial questions and understand how they are similar and how they may differ from what you have seen before. And of course, economics helps answer "what does it mean for society?" If we are to provide students and the public with the information and the tools to make sound financial decisions and fully participate in the economic system, we need tr knit these two educational strands together into a more ~~r~proach. · ~ tJJ-W~ ~ m-di ✓ rH1 ;,a tu) wd /4u., ~ cfre> L l!/11 Source: LEB Version 2 11 • .., 1 j L n, {u ~~ ~, This version Zzz I ~ ~

Cathy E. Minehan (2005, March 29). Regional President Speech. Speeches, Federal Reserve. https://whenthefedspeaks.com/doc/regional_speeche_20050330_cathy_e_minehan

@misc{wtfs_regional_speeche_20050330_cathy_e_minehan,
  author = {Cathy E. Minehan},
  title = {Regional President Speech},
  year = {2005},
  month = {Mar},
  howpublished = {Speeches, Federal Reserve},
  url = {https://whenthefedspeaks.com/doc/regional_speeche_20050330_cathy_e_minehan},
  note = {Retrieved via When the Fed Speaks corpus}
}