Federal Reserve Chairman Alan Greenspan said Tuesday that consumers needed to increase their financial knowledge to cope with an increasingly sophisticated marketplace.

"For an increasingly complex financial system to function effectively, widespread dissemination of timely financial and other relevant information among educated market participants is essential if they are to make the type of informed judgments that promote their own well-being and foster the most efficient allocation of capital," Greenspan said in testimony prepared for delivery to the Senate Banking Committee.

The testimony did not allude to the current economic situation or the outlook for interest rates.

"As in the workplace, fostering education that will enable individuals to overcome their reluctance or inability to take full advantage of technological advances and product innovation in the financial sector can be a means of increasing economic opportunity," Greenspan said.

He added that consumers "will also need to accumulate the appropriate knowledge about how to use new technologies and how to make financial decisions in an informed manner."