This article was originally published on Bloomberg.


“The pandemic has shown us that our financial system—and private capital in particular—just doesn’t adequately account for the often messy and fragile world we inhabit. We may now be at a point where it’s no longer possible to ignore this. Here are a few things we may be force to reckon with:

The real world has hard constraints

…There are no easy hacks for a global crisis

…Externalities are back

Investors and policymakers will have to be much more conscious of their reliance on complex and fragile systems. Externalities—costs or benefits that aren’t reflected in market pricing—are by definition ignored in most financial decisions.

We’re now living through a powerful demonstration of the problems with that way of thinking. The benefit of having a functional public health system isn’t priced into the market in normal times; now it’s making a decisive difference in guiding the fates of entire nations.”

Read on at: Bloomberg.