The pace of the COVID-19 pandemic and its impact on everything from health care and politics to all aspects of the economy has been unlike anything we’ve ever experienced. At present, most forecasts call for a prolonged U-shaped recovery, and many are contemplating the possibility of a W-shaped rebound—twice faltering before finally regaining ground more permanently.
In such a complex and volatile environment, strategic decision making requires absolute clarity. Particularly in the US, difficulties ramping up wide-scale testing, along with a lack of uniformity around national guidelines for jump-starting the economy, have made it more challenging to assess the status of the pandemic and how to navigate its different stages. Reopening regional economies without having solid data as our compass is risky business.
Global cooperation is key to recovery. Eurozone countries approached the crisis with an international mindset and were able to organize and maintain discipline around social distancing while providing economic support as well as increased medical research. Yet, as we’ve already seen, areas that recently moved toward a slow reopening were forced to retreat following a bump in infection rates. As such, economic improvement in the EU is likely to be very incremental, not only because of a potential second wave later in the year, but also the challenge of convincing people it’s okay to return to offices, restaurants, theaters, and other aspects of life before COVID-19.
In many ways, the pandemic is likely to accelerate the pace of change, leading to a more developed digital economy, dramatically altering global travel habits, as well as creating a better balance between work and home life.
Providing Leadership from Main Street to Wall Street
Banks generally entered the crisis from a position of strength and have played a crucial role in supporting institutions and individuals alike over these past few months.
Having maintained a robust balance sheet with strong capital and liquidity ratios, BNP Paribas has consistently supported its European and American clients globally, underwriting large credit facilities, providing hedging solutions, while also ensuring essential cash and trade flows.
Through our Bank of the West division, BNP Paribas has been very active in providing liquidity on behalf of retail clients and individuals. As an early participant in the Paycheck Protection Program, we’ve secured funding for countless small- and medium-sized enterprises, helping to preserve hundreds of thousands of jobs in the process.
Looking Ahead to a More Sustainable Future
Of equal importance: responding to COVID-19 with an eye toward the future. Much has been made of the power of sustainable investing of late, including innovative approaches to financing both green and social causes. While we at BNP Paribas have long embraced such initiatives, in many ways, the pandemic is likely to accelerate the pace of change, leading to a more developed digital economy, dramatically altering global travel habits, as well as creating a better balance between work and home life. Some of the benefits are already evident—just two months into the crisis, the city of New York is significantly less polluted, and much the same can be said for other regions across the globe. We strongly believe that sustainability must be at the heart of the global recovery from the pandemic so that we can build a more resilient and equitable future for society.
Accordingly, a return to the standards that existed at the start of this year is unlikely. The massive shift in lifestyle that we have seen on a global scale has, post-pandemic, exponentially elevated the whole notion of protecting the planet. To the point, I believe that companies, business leaders, and decision makers everywhere will take the lead and forge ahead because of the lessons learned during these trying times.
A Stabilizing Force
Going forward, the range of outcomes and the difficulty in predicting them present new challenges for business leaders. Maintaining a cooperative spirit through the nationalization of global supply chains to ensure greater resiliency and mobilization of critical resources, for example, will be key to a successful resolution of the crisis. Along the way, banks will continue to play an essential role in stabilizing markets and lives.