COVID-19 will play a crucial role in defining how financial market infrastructure evolves over the next decade. In a new report, Guy Carpenter-affiliate Oliver Wyman outlines three waves of management action to help navigate the challenges ahead. The report was written by Oliver Wyman Partners Hiten Patel, Daniela Peterhoff, Michael Wagner and Tobias Wuergler and Principal Nikolai Dienerowitz.
Coronavirus (COVID-19) has had a major impact on the global economy. Financial markets have seen unprecedented activity, such as the MSCI World dropping by nearly 30 percent during a five-week period, with both the supply and demand-side fundamentally upended across the globe.
Financial market infrastructures (exchanges, clearinghouses, central securities depositories and custodians, financial data, and technology providers) have been robust, providing the community with stable platforms and operations, as well as timely information to transact throughout the turmoil. Operations of most firms have coped well with the crisis to date, as business continuity plans (BCP) have been deployed, and the workforce has adapted accordingly. Also, risk management systems provided the required buffers so far. Access to capital, liquidity and information has been maintained, and on even the most volatile days markets have functioned as expected.