In a Zoom meeting this week, one of the participants noted that her children had referred to the practice of blowing out candles on a birthday cake as being very unhygienic. Indeed this tradition that many of us have had for years is one which should disappear as we think about hygiene in a post-COVID-19 world. For children growing up today it is very unlikely that they will have parties with cakes and candles as in the past. This remark reminded me of a recent feature article in The Economist, “The 90% economy that lockdowns will leave behind.” This article begins to outline the many ways in which our world has permanently changed – much more dramatically than with the financial crisis of 2008.
For bankers the need to focus on a dramatically changing economy is critical and with much more serious consequences than the loss of the tradition of birthday cakes with candles. Many businesses will no longer be viable as the economy adjusts to more social distancing – a practice that will be driven as much by individual decisions as by governmental fiat. Many other businesses can survive but will need to invest in change to do so. And it is not just businesses with direct contact with people but also those with more indirect consequences such as energy firms where there may be a permanent reduction in demand – good for the climate but challenging in its transition.
Banks provide key support to companies in the real economy. Those banks that will be successful should be thinking about the changes that will be coming. These banks should be proactively looking for ways to support their clients in the transition. The question for all bankers needs to be: What are you doing?
