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Newsroom & speeches
18 November 2009
Thank you for the invitation to speak here today.
I’m enthused by the new Foundation Degree in Financial Services at The Open University and am honoured to talk to everyone here at its launch.
The launch of this degree is timely. This is a great example of an education establishment reflecting on the times and capturing the need to provide a service through education, offering the skills that will help repair our financial services industry now and serve the economy in the future. I commend the OU’s continued efforts to deliver learning with contemporary relevance.
I’m also delighted to see the range of people and organisations in attendance – those who are interested in the degree and the various partners who have worked closely with the OU in developing the award.
I am a firm believer that the ties between industry and academic institutions should be strengthened. Such ties can only deepen the quality of the debate about regulation and governance; such ties are necessary if we are to imbue our financial services with a long-term perspective.
It will help us to reaffirm our understanding of the role of finance in society and in our economy.
A strong finance system is critical for growth, but it is a system that has long been opaque.
The financial system that serves us in the future needs to be transparent, open and engage more with people and be characterised by much greater competition.
And we have been taking action to achieve this.
We have put in put place new regulations on how retail banks conduct their business, which included regulations which mean that all lenders will have to explain their products and the terms and conditions properly.
We are also acting to improve financial capability, as it is important that people have the knowledge, skills and confidence to cope with an increasingly complex financial world.
We want to ensure that people can make the most of their money and avoid getting into financial problems in the future.
And this work spans across all stages of the lifecycle.
It starts with financial education in schools, so that when young people leave school they have the skills and confidence to cope with an increasingly complex financial world.
An example of our work in this area is the ‘My Money’ programme launched in September 2008. It is the first programme to provide a joined-up approach to financial education from when a child first starts school, through to the transition to working life or further and higher education helping kids aged 4-19 learn about money and how to manage it.
And since September last year, Financial Capability and Economic Wellbeing has been taught as a specific strand of PSHE – Personal Social, Health and Economic education in the secondary curriculum in England. On November 5th the Government announced that PSHE will now be made compulsory, bringing financial education to all English classrooms.
I understand that the OU also has another course that will help the improvements in financial capability - the ‘You and your money’ (personal finance in context) course - which is now included in the financial services foundation degree.
I hear that this course has been well received and is oversubscribed - I congratulate you for this.
In very basic economic terms this shows that there is a real demand for financial education and hopefully supply elsewhere will be increased!
But simply explaining products to people will not help to rebuild trust in a system which for too long has been shrouded in complex algorithms, product complexity and obscure language.
A year ago this week the world’s financial system faced its most dangerous moment in at least 70 years.
However, we have engineered stability through action - we looked back on the mistakes and deficiencies in the system and started thinking about the future.
But there is more to do.
We need to reflect on the failures of both regulation and market discipline in keeping the financial system safe and focused on its long-term health.
And this entails the need for the right people to be working in the sector.
The Foundation Degree will bring new people in with new skills and skills tailored to the demands and interests in the sector.
It is another avenue for a broader range of people to enter the industry, opening the sector up, ensuring a diversity of backgrounds and skills; this can only be a good thing for financial services.
The new qualification delivers the key higher Level 5 skills in the QCA National Qualifications Framework that will be increasingly important.
It will ensure a broader understanding of business, finance and how the financial sector works in relation to the rest of the economy.
This is something I’ve been keen to see more of, so I’d like to thank the Open University in taking the steps to do so.
