Nicosia, Cyprus. A Central Bank of Cyprus official has called for strengthening investor confidence as a key pillar of the Savings and Investment Union (SIU). Panayiota Karamanou said the challenge for the SIU extends beyond education and requires structural changes.
Investor confidence and the SIU
Karamanou, head of the CBC directorate-general of financial stability and resolution, said the SIU seeks to mobilise Europe’s significant savings and channel them into productive investment opportunities for businesses and households.
Limits of financial literacy efforts
In an article published in Eurofi magazine, she said the Financial Literacy Strategy aims to improve citizens’ knowledge and resilience, but previous efforts across EU member states have had limited impact on retail investment participation. She said this points to a behavioural challenge rather than a purely educational one.
Survey findings on knowledge and participation
Karamanou cited Eurobarometer 2023 data showing a weak link between financial knowledge and investment activity. She noted that the Netherlands, ranked highest in financial knowledge, reports investment participation at around one fifth of respondents, while Malta, with mid-level knowledge, records participation closer to one third.
Trust as a barrier
She identified trust as a missing transmission channel, saying around 45 per cent of Europeans lack confidence that investment advice is provided in their best interest. In countries affected by past crises, including Cyprus and Greece, she said confidence is lower, with only around 20 per cent of respondents expressing trust.
EU recognition of the issue
Karamanou said the European Commission has identified lack of trust as a key barrier, including in its 2020 Capital Markets Union Action Plan.
What measures would most increase your confidence that investment advice is given in your best interest?