The standard paradigm underlining financial regulation as well as the financial consumer protection toolbox has long been rooted in individuals’ rationality hypothesis. Within this framework, the more information the better, as complete information is deemed to trigger awareness and empower consumers. Rules of conduct themselves have increasingly relied on information flows from intermediaries to individuals, both at the point of sale and on an ongoing basis. The latest financial crisis has challenged this framework, highlighting that investor behavior systematically deviates from classical assumptions. A rising number of policy makers have become interested in delving deeper into the individual decision-making process. Since then, international institutions and national jurisdictions have been launching behaviorally informed initiatives as an important precondition for successful actions. This chapter focuses on Consob (the Italian securities regulator)’s first steps towards behaviorally informed policies within the European framework.
Chapter 17 discusses clearing and settlement. The picture emerging from thise chapter is one of a significant and growing harmonization, but a process which is still incomplete and, in any case, uneven. While some areas enjoy significant uniformity (e.g., financial services or prospectus), in other important areas national differences are still significant (e.g., with respect to civil liability for false, incomplete or misleading prospectus). The institutional framework is itself only partially satisfactory. The very limited direct supervisory powers granted to the ESAs, for example, due to constitutional constraints, determine a baroque and possibly ineffective pan-European supervision. In this context, additional efforts seem to be needed to complete Capital Markets Union, and there are questions whether the political will to do so will be strong enough following the UK withdrawal from the EU.
Traditional educational programs are predominantly focused on knowledge and much less on motivation, attitudes, and any other factor that may impact on the individual decision making and on behaviour. Recent advances in neurosciences and cognitive sciences confirm the insights of some strands of the pedagogical literature, by unveiling that effective learning is prompted by emotional and experiential involvement. This chapter elaborates on the potential of edutainment and gamification in financial education, by reviewing the role that experiential learning may play in the transformation of knowledge into action, also through the lenses of CONSOB first steps into gamification.