The Covid-19 pandemic has inevitably drawn comparison with the global financial crisis of 2008-09. But while there are similarities, the differences are greater, meaning the remedy needs to be different too.
Perhaps the biggest uniting factor between the two events is uncertainty.Ask the head of a major commodities company in 2008, and they would have told you their biggest task was staying liquid, slashing costs and debts, and surviving. How long the crisis might last was anyone's guess: The recovery could be swift and V-shaped; more protracted and U-shaped; or drawn out and L-shaped.It's the same story today, with a lack of visibility pervading as companies react to the challenges thrown at them and wait for the fog to clear. The great unknown right now is how long that wait will be and how deep the downturn is.At heart, however, the two situations are very different.The 2008-09 downturn was a shock to the financial system - the banks and housing - which in turn had a serious impact on the real economy, meaning the flow of goods and services. The Covid-19...