24 June 2021 Survey Report

Covid-19, One Year Later

Capital Markets Entering Uncharted Waters

This research paper constitutes the second edition of our work on the impact of the COVID-19 crisis for capital markets and the investment management industry. It is based on a survey of the global CFA Institute membership, conducted in March 2021.

Governments and central banks in advanced economies have implemented robust and comprehensive plans and have taken a coordinated approach to fiscal and monetary stimulus, which was a novel and potentially controversial stance on central bank independence.

This influx of liquidity into the system clearly tamed the risks of market dislocation and helped bridge the gap—at least partially—for market participants, workers, regulators, policy makers, and investors directly affected by the economic shutdown measures.

Concerns are rising, however, as to the eventual unintended consequences of this liquidity infusion by central banks and government relief programmes, including questions regarding a multispeed recovery, inflationary pressures, addiction to monetary stimulus, taxes, emerging regulatory risks, and the actual financial health of corporates.

These considerations formed the framework for our second research paper on the subject of the COVID-19 crisis. In particular, we sought to explore the socioeconomic consequences of the crisis and that of the stimulus measures as they may be having distortion effects. As part of this effort, we have tried to focus on the “S” in environmental, social, and governance (ESG) and to extract some high-level observations on societal developments at large, including how the various socioeconomic categories may have experienced the crisis differently.

COVID-19, One Year Later: Capital Markets Entering Uncharted Waters Review the Full Report (PDF)

Summary of Findings

The themes that this research explores are as follows:

The shape of the economic recovery
One year after the start of the crisis, the recovery that is forming could be taking a K shape, where different parts of the economy, markets, and social categories are affected in materially different ways.

Equity markets and the real economy
We show that equity markets are perceived to have progressed out-of-pace with the real economy as a result of monetary stimulus.

Inflation may be back on the agenda
Input prices have been the first to show nervousness in connection with the output gap generated by the crisis. The question will be whether this is temporary or structural.

■ The structural consequences of the crisis on the economy
We may be observing structural transformations to the traditional economic balance, with the rise of central bank interventions and a larger role for governments, Big Tech as the clear winners, and ESG as a forceful trend in financial services.

The financing of economic relief programmes
How the government economic relief programmes will be paid for is a key question with taxes and debt monetisation under consideration.

Monetary stimulus by central banks
The question should now switch to whether it will be possible to normalise monetary policy while authorities are wondering how to coordinate money supply and fiscal policy.

The socioeconomic consequences of the stimulus measures
Authorities should consider the effects of economic and monetary stimulus on the fragile balance among the various socioeconomic stratums.

Regulators and the crisis
Regulators fared well during the crisis, but a key question now is about the major risks they should be focusing on.

In the short-term, it would appear that the risk of corporate credit default risk is on the rise, but it could normalise over the longer term. In the meantime, corporates should provide investors with more forward-looking information to enable them to assess the impact of the crisis more precisely.


The survey was fielded to the global membership of CFA Institute across all regions and jurisdictions where the organisation has representation. The survey was sent on 8 March 2021 and closed on 28 March 2021.

A total of 150,024 individuals received an invitation to participate. Of those, 6,040 provided a valid answer, for a total response rate of 4%. The margin of error was +/-1.2%.

We’re using cookies, but you can turn them off in Privacy Settings.  Otherwise, you are agreeing to our use of cookies.  Accepting cookies does not mean that we are collecting personal data. Learn more in our Privacy Policy.