Half of Cypriots do not know the limit for insured deposits despite the fact that Cyprus suffered a haircut of deposits over €100,000 as part of its bailout plan in 2013, a survey showed.
The fining which has been described as a paradox emerged in the context of a survey carried out by the Central Bank of Cyprus over financial literacy.
Furthermore, the survey’s findings show that financial literacy is weaker in the age group of 18-29 years, where responses received the lowest rankings.
The survey, along with other surveys conducted in the past will form the basis for the drafting of a national strategy on financial literacy in Cyprus.
Addressing a webinar to reveal the findings of the survey, Constandinos Herodotou, the CBC Governor, said “the stock crisis of 2000 and the Cypriot’s irrational handling of their portfolios before the 2013 crisis have highlighted that a significant part of our country’s population does not have core financial knowledge or rational practises on financial issues such as investments, savings and borrowing.”
Presenting the findings, Goerge Kyriacou, the CBC Director of Economic Analysis and Research said the survey confirmed that the level of financial literacy in Cyprus needs improvement.
The survey used a common questionnaire used by the Organisation of Economic Cooperation and Development with Cyprus raking 11th at 13.3 points.
Kyriacou however said Cyprus scored the lowest points on questions regarding compound interest and portfolio diversification, which are associated with the crisis of 2000 and 2013.
Moreover he said that the respondents replies were disappointing over additional questions as they did not know the annual percentage charge, when a credit card limit will be repaid with a certain interest rate and a certain balance while 50% of the respondents did not the limit for insured deposits.
“I find that somewhat paradoxical in a country where a bail-in was imposed in 2013,” he said.