Introduction

How much do people know about finance? What is the consequence of a lack of financial knowledge for financial consumers? If these are the big questions on consumer finance studies that deal with financial literacy, there are two other preliminary questions: what does “financial literacy” really mean? And do we know how to assess financial literacy? These questions represents the focus of this study. The first part identifies the main components of the financial literacy construct, and proposes an assessment methodology. The second part applies such methodology on data from different countries (the UK, Germany, France, Italy, Spain, and Sweden) to assess financial literacy in Europe.