Shifting corporate responsibility to consumer resilience
The coronavirus Covid-19 crisis has highlighted the need to build better consumer financial resilience – bank efforts to support personal savings and debt reduction will have a greater impact than writing cheques.
Nobel-prize winning economist Joseph Stiglitz made the point recently in reference to Covid-19 that the US has created an economy without resilience. It would be fair to say the US is not the only one, but it is the most striking because it is famed as the world’s richest country.
The many factors that make up a resilient economy will be debated in the months and years ahead. And as governments put together packages for those who have lost their jobs or who need support as a result of this crisis, the question of how we create financially resilient individuals also needs to be examined.
In the US, the Federal stimulus package includes a one-off $1,200 cheque to individuals who earn less than $75,000.
Even with other short-term changes such as frozen student loan repayments, mortgages holidays and lowered credit card interest rates, these efforts are unlikely to create enough financial resilience to survive the longer-term economic impact of coronavirus: they are no more than sticking plasters to cover some deep wounds to the economy.