This is article, Delloite looks at three scenarios related to regulation and society that they expect to shape capital markets.
This pandemic is expected to have lasting repercussions. This is the basic assumption. Stakeholder capitalism and isolationist government policies are expected to be the common denominator of these changes. And in all scenarios, governments and regulators are likely to be more reactive to lessons-learned for capital markets from the pandemic, including by introducing new regulations.
In summary, society and government will be important forces in determining the future of capital markets. Across all potential scenarios, there are underlying industry forces which they believe will drive impacts across capital markets institutions. For each force, Deloitte have highlighted likely implications and resulting key challenges that capital markets institutions will face under the relevant scenarios. Please continue reading here
Deloitte considers four scenarios that could play out over the coming months (and years):
The Passing Storm – relatively successful management means that pre-pandemic norms return in many areas, although not without lasting repercussions. These disproportionately affect lower and middle income individuals and communities.
Good Company – the role of large corporations and of the wholesale financial services industry in supporting the public response accelerates developments towards more socially engaged ‘stakeholder capitalism’. The financial services industry adopts a heightened responsibility post crisis, both economically and socially.
Lone Wolves – a prolonged pandemic period, with unpredictable bouts of volatility and an extended global recession spurs governments to adopt isolationist policies. This leads to insufficient global coordination.
Sunrise in the East – a more effective response and better recovery trajectory accelerates a long term increase in the relative importance and influence of East Asian nations including China. Western recovery is based on lessons learned from the earlier recovery observed in the East.