ISMAIL LAGARDIEN: Interventions needed to help poor countries rebuild after pandemic
After every systemic crisis — where, for instance, more than one bank fails — there is a call for safety nets, or at least buffers to mitigate the effect on the poor and vulnerable. If we look back, starting with the 1929 stock market crash, bank runs swept across the US between 1931 and 1933 and thousands of banks shut down.
The newly elected US president, Franklin Roosevelt, hastily passed legislation to stabilise industrial and agricultural production, create jobs and generally stimulate recovery. He also created the Federal Deposit Insurance Corporation, to protect depositors’ accounts, and the US Securities and Exchange Commission to regulate the stock market and prevent abuses of the kind that led to the 1929 crash in the first place. In other words, he established great institutional (financial) stability, strengthened the necessary buffers and focused on creating greater social safety nets. Crucially, in 1935 the US Congress passed the Social Security Act, which for th...
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