Barclays CEO Jes Staley has compared the pent up demand currently in the global economy to the end of the 1918 flu pandemic and the subsequent “Roaring 20s.”
Speaking on a panel at the World Economic Forum’s virtual Davos Agenda event, Staley laid out the British lender’s expectations for a strong second half of 2021, providing the Covid-19 pandemic can be wrestled into submission by vaccines and containment measures.
The 1918 flu infected around 500 million people in four waves between February 1918 to April 1920, resulting in tens of millions of deaths. What followed was a decade characterized by economic and cultural prosperity in the U.S. and Europe.
“What that led to when it finally got arrested was the Roaring 20s, and there was just this explosion of demand coming out of that,” Staley said Tuesday.
“When we look at the balance sheet of a JPMorgan or a Barclays, there is just enormous stored up purchasing power. Consumers are decreasing their borrowing and increasing their deposits, and small corporates are doing the same thing.”
However, Staley did also note that both the impact of the pandemic and the stabilizing effects of fiscal and monetary policy, along with hopes of an imminent rebound, were distributed unequally across both the economy and society.
He added that the greatest risk “is not an economic one but a social one” due to people being “left behind,” nodding to widespread civil unrest in the U.S. over the past year.
Source: CNBC
