Governments around the world have spent a staggering US$14tn to cushion the blow of the pandemic, according to the International Monetary Fund. Liquidity support, such as loans and guarantees, comprises US$6tn of this. Our special report on pages 18 to 25 looks at the scale of the debt taken on by firms, solutions for supporting businesses globally, and how our members, their firms and clients can participate in the great global recapitalisation.
Economic recovery will require consumers to put their hands in their pockets but, in the second quarter of 2020, household savings ratios spiked to record highs in countries around the world, dipping slightly in the third quarter but remaining well above average. We look at the impact of this, and alternatives to holding a stockpile of cash, on pages 39 to 42.
These alternatives include investments, but “what is likely to be the impact on the different styles of investment … and which styles are likely to be most fruitful in this radically different climate?” Turn to ‘A question of style’ (pp.34–37) for discussion on this question.
Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England, suggests in his profile interview that we should “Consider what would have happened if we’d gone into March  with thinly capitalised banks, with the vulnerabilities that they had in 2007.” The pandemic has identified gaps that need to be addressed, he says. Turn to pages 26 to 29 for more from Sir Jon.
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Other highlights in this edition include a Q&A with Jonathan Davidson of the FCA and behavioural risk expert Dr Roger Miles on the topic of whistleblowing and psychological safety; an ethical dilemma about compliance while working from home; and an insightful look at the FTSE 100 versus the S&P 500 in Andy Davis’s column on page 72.
As ever, please get in touch if you have any comments or questions.
Review editor, CISI
Read the February 2021 flipbook edition of The Review