Interview: Trump’s US-Europe travel ban NZ effects

26 May note: This interview gives an interesting take on what was going through my mind two weeks before lockdown. It is reassuring to see that some of my crystal ball was working, even if way back then I hadn’t yet considered a full shutdown of our borders as a central scenario…

Trump’s travel ban on Europeans entering the US caught airlines, policymakers and travellers off guard. The effects on economic and financial markets have already been dramatic. Just what risks does the ban pose for New Zealand?

The following interview with Seven Sharp gives my immediate take on the implications for New Zealand in the hours following President Trump’s announcement.

The morning after this interview, I awoke to the news that many global financial markets had their biggest single day plunge since 1987.

26 May note: Below is my 13 March take on what that stockmarket crash would mean for the months ahead.

Coronavirus now poses a crisis-trifecta: Public health, economic and a financial crisis. Markets will begin pricing in risk seriously and liquidity will tighten, particularly for corporates and banking systems across the globe where there were already some question marks.

Now is the time for decisive and co-ordinated central bank actions across the globe to reassure investors and depositors of the health of local banking systems. Assistance will also be necessary from a fiscal perspective, across taxation, targeted subsidies and other spending support.

New Zealand is well-placed from a banking stability perspective, but our banks still need to access international markets. The availability of credit is vital for small business in New Zealand, particularly in the current climate of severely impaired economic activity.