Brussels, 25 October 2016
Please note that the video is in German.
A transcipt in English follows.
Video transcript in English
Messrs. Rüdiger and Fahrenschon on the European Stock Market Learning
Moderator: Welcome to the 44th floor of DekaBank, we are at the top of the financial quarter here in Frankfurt, and we want to speak about the European Stock Market Learning, the online competition of the savings banks. The ESML has a longstanding tradition, there are generations and generations of students who have taken part for many years and the interest to do it has not decreased, that's why we investigate further and wish to learn more. My two interlocutors here are
Mr. Michael Rüdiger, CEO from DekaBank, and
Mr. Georg Fahrenschon, President of the DSGV (German Savings Banks Association). Mr. Fahrenschon, why have savings banks engaged for so many years now in the so called Stock Market Learning game in Germany?
As you know, financial education is becoming more and more crucial, and of course experience plays a key role here, especially when it comes to shares: what they are, what is their rationale, what is the interaction between the decisions to buy from an investor and the price fixed by the stock market. On the one hand this being done in a playful way but it is also targeted to make real decisions in real timeframes. This is a very important starting point and we also notice that we touch upon many interests: 140.000 young students participating yearly, 300 savings banks support this initiative on the field, together with the investment firm of the German savings banks, shows that we have developed a fantastic format.
Moderator: And in spite of this, Mr. Rüdiger, Germany can still be considered a developing country when it comes to investments and equity culture. This is due to, amongst other reasons, insufficient knowledge, people are not informed… Could this be a breakthrough, could maybe something like the Stock Market Learning help to raise the interest?
Michael Rüdiger: I am completely convinced of this. The investment firm of the savings banks puts its passion in the promotion of the investment culture, and all our research shows that financial education is one of the pillars to promote this investment culture. And the professionality introduced by this game, to inform not only about the shares in the narrower sense, but also the participation in productive capital, is a very important building block.
Moderator: Mr. Fahrenschön, it is not only about the best portfolio development, the best performance in a few weeks, there is also a sustainability rating. Why is the sustainability aspect becoming more and more important?
Georg Fahrenschon: There are two main reasons. Firstly for good reasons. The younger generations currently ask themselves how this will be developed in the long term. We have represented ecological and social matters. How do pure market economy decisions impact society. And secondly, we notice that in real life, like in investment decisions, those ethical standards actually have a value and make a profit. That's why we are firmly convinced that not only are the young generations asking the right questions, but we also need to be well informed and consider sustainability impacts and ethical questions on a daily business.
Moderator: Shares are still unknown in school lessons. Subjects dedicated to economics, such as the stock market or public economics barely exist. It is about motivating young people, while introducing the subject of the stock market.
Michael Rüdiger: Yes, it is urgently necessary from our point of view. This is also related to the fact that we speak here about long term investments. In today's low interest rate environment, which in our opinion will unfortunately last longer, it is essential that people start very early to build assets for the future. This can of course sound boring to young people, and that's why we need something like the Stock Market Learning platform, where students can engage in a relaxed way but also with real time data, so as to learn how to use this in order to build assets for the future and what the effects of their investment decisions are.
Moderator: What are the concrete take aways and added value for the participants, for the teams? There are teams that compete against each other, Mr. Fahrenschon.
Georg Fahrenschon: It is of course, a playful but challenging approach. Feedback on real exchange values, market indexes, right decisions daily taken… this means: Am I learning anything? I become acquainted and establish contact with a very important instrument, because everybody knows that we should start as soon as possible to optimize our pension. Investment savings play a key role here, as the legal pension will not be enough in the future and in this respect the ESML allows me to become acquainted with the stock market so that it will help me to go a bit further in retirement and build additional pension savings through securities.
Moderator: The stock market it does not only go up but also down, stock market professionals call it volatility. Of course this is how the stock market survives. Think about the DAX fever curve just before the daily news. Are investments something for the average investor, or is the main objective purely speculative, Mr. Rüdiger?
Michael Rüdiger: With the right financial education tools and also with the right appreciation of risk, ideally done together with the savings banks, this is the right tool. If the Stock Market Learning makes this volatility and mechanism transparent, then it is important to see what long term effects I can target. Regular, long-lasting investments avoid volatility and bring us farther from daily fluctuations and the continuous potential for the value to grow. This is not contradictory, both go together, transparency, understanding, risks and the positive long term effects that we wish to combine with each other.
Moderator: Many thanks, Sirs, for this conversation.
About the European Stock Market Learning
The European Stock Market Learning is a European initiative to enforce literacy of young people in business and financial affairs through an online simulation of financial investments. It is a national and cross-border competition for teams of pupils (15 and older) and students run by European savings and retail banks. The ESML was launched in 1983 in Germany and since 1999 joined by further ESBG members, so that currently five countries participate. Since 1983 about 7.5 million pupils and students have participated in the annual stock market simulation with more than 45,000 teams per year. The European Stock Market Learning is coordinated by ESBG. >> Learn more