Central banks must change course if they are to lead us out of the coronavirus crisis | Josh Ryan-Collins
After 1945, banks worked closely with governments to ensure credit went to the right places. This should be happening now
The financial sector was the cause of the last major economic downturn of 2008. This time round we need it to help aid a strong recovery following the economic shock caused by coronavirus. As they did during the last crisis, central banks have prevented financial sector collapse, with the G7 nations injecting $2.5tn of new money into financial markets in March and April through quantitative easing and related liquidity programmes.
In the face of demand-and-supply shocks causing some industries to contract and widespread unemployment, we now need banks, asset managers and stock markets to take advantage of this liquidity by lending to productive and job-creating sectors of the economy. These jobs need to be sustainable so we also need patient finance - long term, committed, high-risk investment - to create the green infrastructure and innovation needed to rapidly transition to a zero-carbon economy.
Related: The pandemic has exposed the failings of Britain's centralised state | John Harris
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