Jakob Miethe, who works at the International Economics department, has successfully defended his dissertation at the Humboldt-Universität zu Berlin.The dissertation with the title "Offshore Finance and the Economics of Regulation and Reform" was supervised by Prof. Dr. Lukas Menkhoff (DIW Berlin, Humboldt-Universität zu Berlin) and Prof. Marcel Fratzscher, Ph.D. (DIW Berlin, Humboldt
In recent years, the global community has promoted several initiatives aimed at breaking bank secrecy in tax havens. Such treaties for the exchange of information among tax offices can be effective. A treaty between country A and tax haven B reduces deposits from A in banks of B by approximately 30 percent. However, the analysis shows that tax evaders react to such treaties not by becoming honest
German Institute for Economic Research: No reason for exaggerated concern about an economic slowdown
Euro area states can benefit from an interest rate increase in the U.S. in the short term, according to the findings of a current study by the German Institute for Economic Research (DIW Berlin). Thanks to the devaluation of the euro, their exports would rise to the extent that they are able to
Central banks frequently intervene in foreign exchange markets. Using recognized criteria this report analyzes the probability of success in a data set of 4,500 intervention episodes in 33 countries. It is important to differentiate among exchange rate regimes because each focuses on a different goal. While flexible exchange rate regimes intervene less frequently and seek to influence trends,
For social and economic reasons, national economies benefit from the inclusion of as many people as possible in financial services. In a cross country study, the present study shows that financial literacy for the general population promotes financial inclusion. This relationship goes beyond the effect of higher economic or financial development. And the effect of higher levels of financial
Is it common for central banks to intervene in foreign exchange markets in order to influence exchange rates? And if so, is it effective? From a German perspective, these questions seem surprising, since the European Central Bank (ECB) does not intervene in foreign exchange markets—rather, it lets the exchange rates float freely. The situation is very different in the emerging countries:
Mr. Menkhoff, foreign exchange market interventions (FX interventions) can be used to influence international exchange rates. Where and how frequently are FX interventions implemented?
At present, these interventions take place predominantly in emerging and developing countries. In the countries that use them, an intervention takes place almost one out of every three days. [...]
DIW Berlin examined the causes for the gender gap in financial literacy in several countries – Cultural factors play a key role in addition to income, education, and experience – Better financial literacy would mean more financial security for women in retirement
In most countries of the world, women know less about financial matters than men. Socio-demographic factors such as income,
In most countries, women have a lower level of financial literacy than men on average. This report demonstrates that differences in income and education and less experience in financial matters only provide a partial explanation for the gender gap. Data from various countries show that cultural differences may also play a role. In order to close the gender gap in financial literacy, schools should
Ms. Grohmann, you have examined the gender gap in financial literacy. In general, do women know more or less about financial matters than men do?
On average, women know less about financial matters than men in most countries. There are exceptions – Thailand and Russia, for example – but in 135 out of 144 countries, women know less about finances than men. [...]
In Germany and many other countries, financial advisors are required by law to assess their clients’ risk preferences in order to help them make informed and appropriate investment decisions. Most institutions that provide financial advice - banks, for instance - carry out this assessment using just one type of risk measure. Financial advisors might ask clients to answer a question about
Mr. Menkhoff, in many countries the law requires financial institutions to give financial advice to people who are going to invest money. How do financial institutions normally assess the risk attitude of their customers?
The most common way involves asking clients to self- assess their attitudes toward risk or their hypothetical response to a risky situation. Typically, clients will choose from
Parents exert indirect influence on the way in which their children will deal with money and financial products in the future – schools can promote competent financial behaviors
"Waste not, want not“: Children whose parents teach them this concept—and offer similarly wise directives when it comes to money and finances—will often make better financial decisions as adults.
Ms. Grohmann, some people make considerably poorer financial decisions than others. Where exactly do these people experience difficulties?Many individuals make poor financial decisions, particularly when it comes to saving for retirement. They don’t start planning early enough and consequently don’t save enough to provide them with financial security in old age. They underestimate how