RBA’s Ellis Says Post-Pandemic World May Not Be Risk-Averse

By Sophia Rodrigues

(Sydney, November 18, 2021)—The post-pandemic world may not be a risk-averse one like the one following the global financial crisis because demand is bouncing back strongly and the financial sector globally is in good shape, a Reserve Bank of Australia official said Thursday.

RBA’s assistant governor Luci Ellis made the comments in an online address to the Committee for the Economic Development of Australia.

According to Ellis, after the GFC demand was weak and the financial sector was constrained which meant less finance was available even for good projects.

But this time demand is bouncing back due to support from policy and shifts in demand have opened up some industry-specific business opportunities.

Financial sectors are in good shape and business sectors are also in much better financial shape.

“So, the opportunities are there, if not in every industry, and businesses are well placed to fund or finance that investment,” Ellis said.

Ellis said that whether the global economy finds itself on a path to a “Roaring Twenties” or a post-pandemic malaise would depend on the choices made, and that would depend on whether and how people and firms adapt to the recent experiences.

“Even the supply disruptions that are on everyone’s mind can turn out to be the constraint that spurs some creativity,” Ellis said.

--Contact: Sophia@centralbankintel.com