This is important because policies designed to address issues arising during the global financial crisis are not necessarily appropriate for the current crisis. The spring 2020 market dislocations represented a liquidity crisis driven by the economic response to a global health crisis-as compared to the collapse of a housing market bubble that created a credit crisis that roiled markets in 2007–2009. The paper’s key insight: the COVID-19 crisis is different from the 2007–2009 global financial crisis. The first paper in the series, “ The Impact of COVID-19 on Economies and Financial Markets,” focuses on the relationship between the pandemic, the economic shutdown it triggered, and the volatility that gripped the markets.
MARKETS IN TURMOIL SERIES
The series will chronicle financial markets’ reactions to the pandemic, and successive installments will describe the experiences of regulated funds-and their investors-including exchange-traded funds (ETFs), money market funds, and bond funds in the United States, and Undertakings for Collective Investment in Transferable Securities (UCITS) and ETFs in the European Union. To ensure these discussions are rooted in facts and an evidence-based analysis, ICI is releasing a new research series, Report of the COVID-19 Market Impact Working Group.
MARKETS IN TURMOIL HOW TO
Policymakers in the United States and around the world already are considering whether and how to bolster the financial sector’s resilience to future shocks. The result was a period of historic market volatility and precipitous drops in domestic and global markets. Within a few short weeks, the world’s leading economies shut down all but the most essential activities-measures that created unprecedented uncertainty in the global capital markets. The spring of 2020 will be remembered for the outbreak of the global COVID-19 pandemic.
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