Coronavirus outbreak and government measures

Professor Giovanni Barone Adesi
Professor Giovanni Barone Adesi

Institutional Communication Service

20 April 2020

Giovanni Barone Adesi, Full Professor of Finance at the USI Faculty of Economics, explains and comments on the financial measures adopted by countries to tackle the Covid-19 pandemic, with view on Switzerland in international comparison. 

Listen to the full talk by Giovanni Barone Adesi in Italian

The crisis triggered by the outbreak of the novel coronavirus has led many countries to implement a series of emergency provisions, starting with quarantine measures and the subsequent shutdown of all production activities considered non-essential. To deal with the impact on the economy, the affected countries have adopted measures that are essentially aimed at maintaining consumer income on the one hand, and the liquidity of businesses on the other. 

"Switzerland has taken timely action to ensure both strategies, and has been able to do so because the banking system is overall in a fairly solid position. This is a big difference from the crisis of 2008 - which was however a credit crisis in the banking system and not a health crisis like this one that blocked both production and workers' income", explains Prof. Barone Adesi. 

Other countries have taken similar actions, albeit in a variety of ways. "For example, many governments, starting with Germany but also Italy, are worried - among other things - about the possibility that the stock market values depressed by this crisis will allow hostile takeovers by foreign groups", Baron Adesi points out, adding that "Switzerland does not suffer from this because its leading enterprises are large corporations and who remain better balanced as they have had access to the international capital markets for many years. So the Swiss government has not had to take such measures, unlike, for example, the German government which has allocated 500 billion euros to protect its industries". 

"If the first wave of the pandemic seems to be easing, it's not sure we can resume production and normal life without problems. In general, however, the economic crisis is being dealt with adequately, trying to limit its consequences, although the real solution will only come when the health emergency is resolved," the professor concludes.

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