Household wealth plays an important role in the Riksbank’s assessment of how private consumption will develop. Wealth affects households’ consumption in several ways. To simplify, one can say there are two reasons why an increase in wealth, for instance in the form of an increase in the value of one’s own home, can be expected to lead to increased consumption. Firstly, the larger the wealth an individual has, the more he or she can consume during his or her lifetime. This is a traditional wealth effect. Secondly, the size of the wealth can affect the possibilities to obtain loans. This is usually called the balance sheet effect. The larger the collateral a household can offer for its loans, the greater the possibilities to borrow and thereby to consume. When the value of the property owned by the household increases, this also provides a possibility to take out further loans on the property, for instance, to extend or renovate and further increase the value of the property, or to consume other goods. Another effect is that a higher valuation provides the possibility to renew last mortgage loans as first mortgage loans and thereby reduce the interest costs for the loans. There is also empirical support for a positive correlation between wealth and consumption. Wealth also has significance for how strongly households are affected by interest changes.
It is indispensable that households with minimum income to access and benefit the basic banking products, such as current accounts. The Bank of Albania, through legal and institutional changes has provided the possibility that households benefit these basic financial products at a low or no cost at all. As a result, cheaper and swifter alternatives, which compete with the existing financial products, will be available. At the same time, companies that will enter into these new markets will have better possibilities of profit. Education is the sole costs to know and benefit from these products. In this regard, the Bank of Albania remains the main actor for the spread and implementation of the national financial education and inclusion strategies. In this framework, the Bank of Albania is working with national and international important partners, the World Bank and EBRD. Their long experience shows that the correction and reduction of social and economic disparities is a difficult commitment, which takes time. Nevertheless, enhancing financial literacy, by spreading knowledges such are: budget drafting; its effective management; knowing risks and avoiding wrong investments; may affect the mitigation of wounds that these turbulences brings into the life of poor people, and of course to everyone; to the whole society and population and the financial situation that the moment brings about. Turning back to the launching of the Global Money Week 2022, I am glad to see the ever increasing interest of youths, their teachers and professors in our educational activities.