Writing in The Economist, Mark Carney argues that the current crisis 'is a test of stakeholder capitalism'
change in the post-covid world. On one level, that’s obvious: valuations in global financial markets have imploded, with many suffering their sharpest declines in decades. More fundamentally, the traditional drivers of value have been shaken, new ones will gain prominence, and there’s a possibility that the gulf between what markets value and what people value will close.
If these were the only issues, classic value mantras would apply and attention would turn, as it already has for some, to the very real opportunities the crisis has revealed: in teleworking, e-health, distance learning, and the acceleration across our economies from moving atoms to shifting bits. Second, much of the enterprise value of companies will be taken up by extraordinary financial support and destroyed by lost cashflow. Their higher debt will increase the riskiness of the underlying equity and weigh on the capacity for growth.
Fourth, people’s economic narratives will change. After decades of risk being downloaded onto individuals, the bill has arrived, and people do not know how to pay it. Entire populations are experiencing the fears of the unemployed and sensing the anxiety that comes with inadequate or inaccessible health care. These lessons will not soon be forgotten.
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