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Adam Kulam and Lily Engbith

The Covid-19 Financial Crisis That Wasn’t

Four lessons from global financial authorities’ successful response to the coronavirus pandemic.

It could have been worse.

It could have been worse.

Photographer: Spencer Platt/Getty Images

The sudden realization in mid-March 2020 that Covid-19 was going to be a once-in-a-century pandemic created the kind of disruption that financial crises are made of. Pundits predicted an unprecedented triple shock: lockdowns would decimate demand, travel bans would devastate supply, and the “dash for cash” would freeze financial activity. Stock markets plunged and bond yields jumped.

But despite the disastrous human toll and the inevitable economic downturn, the financial crisis didn’t happen. To understand what went right, our research team at the Yale Program on Financial Stability compiled a database of some 9,000 government actions in 180 countries. The lessons: Go big, go early, and prepare for next time.