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Apr 08, 2020

Eurex

Worth reading: World Economic Forum says coronavirus crisis should not be compared to 2008

Comparisons have already been made between the coronavirus crisis and that of 2008. But viewed through the lens of exogenous and endogenous risk, they're quite different. The policy response should therefore also be different, suggests the Wold Economic Forum in a recent article.

The coronavirus is having a strong impact on the world economy and financial system, but does this mean we will will face a systemic financial crisis along the lines of 2008?

The authors find similarities like widespread bankruptcies, liquidity shortages, large losses and that some financial institutions may fail. However, they conclude that this alone does not mean a systemic crisis is inevitable, or even likely, and any solution focused primarily on the financial system would fail.

Read the whole article at weforum.org