Senior bankers are sounding the alarm: Working from home is at risk of not working anymore.
“I don’t think it’s sustainable,” Barclays Chief Executive Jes Staley said Tuesday at the World Economic Forum. JPMorgan Chase’s asset and wealth management boss, Mary Erdoes, agreed.
In the corporate world, “if you ask anyone today, it feels like it is fraying, it’s hard, it takes a lot of inner strength and sustainability every single day to continue to focus and to not have the energy you get from being around other people,” Erdoes said.
Both executives spoke by videoconference as the pandemic has meant the WEF has gone virtual for the first time, rather than its usual mass gathering of prominent corporate and government figures in the Swiss ski resort of Davos.
Erdoes, citing a conversation a JPMorgan strategist had with the drugmaker Moderna, said it’s possible that COVID-19 could persist for a long time amid mutating strains — and instead of more videoconferencing, “the world is going to have to open up.”
Small companies and consumers are increasing their deposits and decreasing their borrowing. Amid pent-up demand, economies could come roaring back in the second half of this year —
“if we can wrestle the pandemic down.” He compared that possibility to the “Roaring Twenties” pulling the world out of a lull after the 1918 influenza epidemic.
Erdoes had another comparison to past decades: the tech-stock froth of 20 years ago, and how it reminds her of the current demand for blank-check companies and wild trading in bitcoin and GameStop. “Those are asset bubbles much like the crisis of 2000. They can end badly, but they don’t affect the actual economy, the actual banking system,” unlike more dangerous credit bubbles, she said.
Staley said the “ultimate economic challenge” will be when enough workers return to employment to send inflation and interest rates higher, and “governments getting to borrow for free may not continue forever.”
Erdoes warned that economic, social and governance investing shouldn’t take the lead in deciding which companies get capital. “To ask for asset allocators or banks to ask which ones are the right ones, and which ones are the wrong ones, goes against the way the legal system and the framework for government works.”
