As the pandemic still rages on, the effect that it’s made has been felt all throughout the economy. Various sectors are in jeopardy and one of the hardest hit is the finance sector. It’s not clear if there will be any layoffs due to the coronavirus, but the fact that governments will create them is a certainty. Governments now look forward to investing in new areas that they had neglected in the past, and new workforce is needed to manage them.
The UK is making some strides in this area. Rishi Sunak, the country’s ex-Goldman Sachs, ex-TCI Fund Management chancellor, is bailing out UK businesses with over £330bn in loans which is equivalent to 15% of UK GDP. The ‘Covid Corporate Financing Facility’ was introduced on 17 March to buy the short-term debt of investment grade companies that ‘make a material contribution’ to the UK economy. Along with it a ‘Business Interruption Loan Scheme’ was introduced to provide loans of up to £5m ($6.2m) each to small and medium scale companies which is struggling during the virus.
UK Government Investments, are being strengthened, so need of assistance is already on the rise. The unit employs around 120 people who oversees the state’s £45bn investment in RBS, which dates back to the financial crisis. As the government’s involvement in the economy increases, ‘UKGI’ alone will need a significantly higher number of new employees.
Providing expertise for a nominal fee is also an option (David Soanes of FIG worked during the financial crisis for UK government). The UK government plans on issuing convertible debt in the form of loans that can be converted for shares at a later date. For this purpose, DCM bankers will be needed to help structure such deals. More debt will be issued if the crisis goes on, and a greater number of employees will be needed to oversee the same.
Anti-body tests are being conducted; this could pave the way for issuing ‘immunity passports’ that mark who has antibodies against COVID-19 which allows them to go with their usual work life. This could also help with employability as well, and most important of all, a stabilization in the economy. But there is also the likelihood that people see this as a reason to get infected with the virus.
