Financial service executives expressed worries about economic protectionism in a Luxembourg for Finance survey. Pictured: Nicolas Mackel, CEO of Luxembourg for Finance, is seen speaking at a funds industry conference in London, 8 May 2019. Photo credit: Association of the Luxembourg Fund Industry
The economy may not recover from the coronavirus outbreak by 2021 and cross-border finance could be hampered by the covid-19 crisis, a canvass of Luxembourg financial executives has found.
Nearly three-quarters (74%) of finance bosses expected it to take “at least 1 year, and potentially 2 to 3 years” for the economy to return to pre-crisis levels, according to the Luxembourg for Finance survey.
Eight of ten (82%) respondents said covid-19 would have a “slowing effect on globalisation” and half (51%) predicted it would lead to “increasing fragmentation of the EU single market.”
The vast majority saw their future fortunes in Europe (90%), with a sizable number also focused on Asia (34%) and the US (25%).
Only “8% thought business travel would return to pre-crisis normality quickly,” said the state-backed promotion body.
Nicolas Mackel, CEO of Luxembourg for Finance, stated in an announcement:
“This shows the financial sector is still thinking in cross border and international terms, despite the potential threat to these concepts from covid-19, and their possible exploitation by populist elements. For this reason, we must ensure governments, central banks and regulators do not raise their drawbridges, and instead continue to make the case for globalisation as a positive force for social change, business growth and economic development.
“We must let the global financial sector play a core role in supporting real economies around the world, but that means framing how this pandemic does not spell the end for our global system of capital flow, trade and relationships. Now more than ever finance needs to be fluid and deployed for the benefit of all.”
The outfit polled “183 senior leaders across firms based in Luxembourg’s financial centre--including a mix of global and local asset managers, banks, insurers and professional service providers”, Luxembourg for Finance said, “in early May”.