Hello im daryn jordan this is counting the cost on aljazeera your look at the world of business and economics this week its been a little more than a decade since the financial crisis and will the pandemic push the banking and financial industry into another meltdown more jobs a loss than during the entire Global Financial crisis and millions more on the line as 2000000000 people go into lockdown. As rich nations pick up last paychecks those people on the margins of society that have no safety net from former workers in developing countries to migrants in rich nations who is looking out for them. From a Health Emergency to an Economic Disaster as the world grapples with the coronavirus pandemic unresolved old wounds may trigger another financial meltdown as rich nations spend trillions trying to keep businesses afloat theyre relying on banks to maintain the flow of cash to industries and offering loan repayment holidays to consumers well in europe where banks have yet to recover from the 2008 north Atlantic Financial crisis despite a trillion euros from governments to prop up businesses there there are fears bad loans will topple some banks and Financial Institutions in the United States president Trumps Administration has been rolling back safeguards to prevent another crisis relaxing rules on how much money banks should have on hand to cover losses weakening stress tests allowing more proprietary trade remember when banks would bet against their own clients well for more than a decade banks stopped using their own money to bet on markets but they have lent money to hedge funds to do just that well bloomberg calculated president trumps. Tax cuts that saved americas top 6 banks 32000000000. 00 at the same time these banks cut jobs they slashed borrowing and ramped up payments to their shareholders the financial crisis has cost u. S. Taxpayers an estimated 23 trillion dollars thats about 70000. 00 per america and in europe despite politicians saying taxpayers would no longer be on the hook for bailouts theyre still happening in December Germanys 4000000000. 00 rescue of nor deutsche bank. Was approved by the European Commission and thats where were going to start this week the German Government is abandoning its policy of running a balanced budget it plans to borrow a 156000000000 euros to protect business and industry from berlin out of there as dominic cain reports. Its a scene thats being repeated around the world patience struggle for life medics struggle for resources and governments face growing demands for cash in berlin the answer appears to be borrowing lots of it fully 156000000000 euro ministers say they could do nothing else this is as minor as a shift. In my view its cynical if some people now start discussions that Health Issues should come 2nd and the Economic Issues take priority the top priority right now is to limit the rapid spread of the pandemic to ensure that our house system is well prepared but just as the virus attacks the population so too doesnt the economy thiel explained operates a cinema in vaughan he worries coronavirus could kill his business from asia its going to talk about its does it want sort out for me as a cinema operator the situation is very better since big march we are no longer allowed to have visitors the fixed costs continue we do not have any possibility to generate an income this means that there is a loss every single day. Felix can access direct government money as part of the new package announced but he wonders is it enough. The moment under both the state aid currently on offer is a step in the right direction weve already tried accessing it however there are a lot of server crashes because everyone is visiting the same internet site of the relevant authorities at the same time to put this new borrowing into perspective its worth remembering that for the past 6 years successive German Governments have insisted on balancing the budget praising the virtues of the socalled shorts and black 0 effectively putting money aside for a rainy day which is why economists say at least in the short term this borrowing round is different what it was always meant as a as as having you know a balanced budget in normal times to make sure that in a serious crisis germany has the room to spend so if youre wondering whether you know this has her soft and those who are insisting on fiscal austerity in the shorts and no thats not the case that extra strength and emboldened them to say the reason why we can spend so much to save our economy in this difficult time is because we saved in good times so the shots and i was not abandoned just temporarily on hold. Another aspect of the government policy is to allow firms to move to whats called courts are bite short working which Means Companies can use federal money to help pay their wage bills in the short term so that they dont necessarily go to the wall in the long term. And then there are the companies who depend on Seasonal Workers such as in the Food Industry germany is about to enter asparagus season and normally hundreds of thousands of workers from Eastern Europe would be crossing borders for the harvest now many cannot and firms like Hubert Herndon in bavaria are feeling the pain between as soon as 12 for 20 today we have seen some 20 to 25 percent loss we preemptively have announced reduced working hours in order to make ends meet and not to miss any time limits we have sent people on leave and weve tried to prepare for everything. That chimes with many firms across germany who hope there is an end in sight to the Coronavirus Crisis one which does not kill their business dominic cain aljazeera berlin well joining us now via skype from edinburgh is us hes chair of International Banking or and finance at the university of edinburgh and immediately has written extensively on Financial Regulation i mean its great to have you on the program let me start by asking you is the Banking Sector prepared for this pandemic do you think no nobodys the Banking Sector is in a much much better this shape that was in than it was in 2008 but nothing like these and of course the biggest problem is this the exposure sold off Balance Sheet by corporates law from corporates to corporates and even one of them defaults as you understand. The same corporation will default on its bank loans and then the status on the Banking Sector will be imported in directly and thats the biggest the biggest said to be yes there is that corporates default on their Short Term Loans to other corporates this is a form of a shadow banking activity that was not a regulated post 2008 and has created serious fragile of these serious vulnerabilities to the Global Financial system the are the threat that the banks face is that the spun damie and the falling g. D. P. And the nation of Economic Activity last for a very long time nonperforming loans accumulated and youre the stand by copy dollars. Are not sufficient to deal with this kind of of crisis do you think lessons have been learned since the 2008 financial crisis then we always fight the last crisis so lessons had been and lessons have been learned and measures are in place to fight it crises that is similar to the 2008 says that started from defined as a sector of. Course a ball to say whether the shock the impact of this type of crisis which nobody could predict a Health Crisis that would shut down the economies ease accounted for in the bank risk models in the bond capital reserves because it is not who ought. For sure is there is a lot of a lot of resilience in the event of a number of defaults in the event or sun your brilliance and their willingness of Central Banks to support. Whatever it takes unlike what happened in the early stages of the 20072008. Let me a pandemic loss and loss of g. D. P. Is massive then the Banking Sector will face serious shoulder and see problems as well and companies during this crisis are already asking for bailouts immobile of the big problems with the 2008 bailouts that was despite the massive cash injections into the Banking Industry very little went in to help the real economy and most of it went to dividends it went to bonuses and investing in the markets i mean thats a big problem isnt it. It is and one hopes that this time whats going to be bailed out quantum is especially because there is no moral hazard problem nobodys really responsible for this type of just crisis and the 4 in the g. D. P. The 4 in Economic Activity so one hopes the government money time will go to bailout. Households not that you support Household Incomes and demand so that not to have a demand shock as well as the supply supply shock that we face today but they are economy needs serious injections of government money and that should include selfemployed people with yourself insurance no pension no entitlements and households with of course still in need to face their day to day bills food bills the mortgage their credit card loans and so on and its an interesting point you make a 1000000 about the bailouts because the European Central bank has asked banks and other Financial Institutions to skip Dividend Payments so they can cover their losses there are others that yeah but there are others who wish to go ahead i want to go ahead with these payments that doesnt look good that does it no because what you do when you pay dividends to your shareholders oborne shift you take cash out of the bank and this is going to be cash that will be needed will be required further down the road for the band who will stand the pressure to withstand the shock and awe. That could be used to rollover loans to Small Businesses or individuals or startups in order to avoid the wave of default its very selfish. And the responsible in this environment to defy the European Central bank or the bank of england or the other regulators and go ahead being born and shes and the evidence should be all together in this and we should all share the pain otherwise companies will become morally bankrupt as well as financially i mean us this time around the governments are trying to help businesses directly arent they i mean should governments take stakes in these businesses and make sure they dont pass on the money to shareholders thereby enriching them. No but they can put Strings Attached to the cash that they are pushing the businesses they can ask the business not to eliminate capacity for the postcrisis period for a period say of 6 months or 12 once you get the same amount of employees the same output and so on so its very important that the money that goes into the private sector is safe because jobs and safeguards individual incomes as well as the viability of the Corporation Just a final point to you emily us this is all very well for rich countries but what about low and middle income nations how will banks cope there and what can governments or pretty stretch with big debts anyway what can they do to help the banks and keep them alive well thats a big question and obviously what i said about the resilience of the Banking Sector this time around at least for a time. Doesnt apply to the emerging markets what could happen there is that the world bank especially would and own organizations would help the state too with the loans that do not have a conditionality this is not the time for stating this is not the time to showing that they show variance balance sched this is a time of fiscal expansion so International Organizations like members like the World Bank Regional banks all the members of the g 20 should be prepared. The wealthy countries members of the g 20 should be prepared to lend money to this smaller countries that we can trace in order to stabilize the Financial Sector and their economy the same. The same should be the case with the i. M. F. The big fear we have is that they might be imposed on this guy and there is some senseless when we shouldnt i even though this gunderson have done nothing there on its a Global Pandemic there is going to be or there is a 3rd of the Global Financial crisis and they receive money because. They wont care if they stay afloat to stay solvent at the end of the day what is going to be the benefit for the Global Financial system for them well good luck there are financial organizations and it didnt end it can do this if we face 6 months down the line or a year down there oh it wave will shove and biographies ok whats going to be why that would be many what was gained so they should do the most for their countries in order to allow them to support their finances so i mean yes we have to leave it there thank you very much. For talking to counting the cost thank you. Well as the world grapples with a global recession its also witnessing the fastest pace of job destruction since the Great Depression tens of millions of jobs could be lost despite trillions of dollars spent on saving businesses and industries the hardest hit sectors are the Airline Hotel and Tourism Industry many millions on low pay and short Term Contracts well in the United States more than 14000000. 00 people could lose their jobs thats according to experts Goldman Sachs says the economy could contract by as much as 34 percent and unemployment could rise to 15 percent with unemployment already at a 45 year high many workers in indias informal economy stand to lose their jobs as 1300000000 people remain under lockdown its a similar picture in many low income and developing countries in the u. K. The number of people seeking universal benefits saw. To a staggering 950000 again there are similar numbers in spain and italy well as people around the world struggle with new anxieties around the kobe 1000 pandemic theres great concern among groups in the us who live and work on the margins of society like undocumented workers and their families aljazeera is rob reynolds reports now from los angeles one son tionne is a day laborer. Im with and. I work day to day so i have to work its them if i dont work. With i want to have enough to cover the basic necessities in a city that has nothing. At the nonprofit Outreach Center where something beyond goes to find work staff are preparing bags with soap tissues and information packets about covert 19 but we were really concerned specifically for workers that are elderly were really concerned about them we look at that we have a Huge Population of workers that are 60 and while it work many undocumented workers cant even practice basic virus prevention workers who dont have access to Running Water can even wash their hands at the month senior osco romero clinic in los angeles dr don garcia treats low income families many of whom are undocumented they live in the shadows their exposure i could very well say on an epidemiological site could even be higher than the ordinary resident or person of the United States just because of their employment stands garcia says some undocumented people ovoid interacting with Public Health systems for fear of being caught like immigration authorities and deported doctors say if the situation remains in which undocumented people stay in the shadows away from the Health Care System during the pandemic it poses a grave risk to the population as a whole theyre becoming a transmission vector to all those other individuals that theyre exposed to unless government policy encourages undocumented people to come out of the shadows the danger of infection could increase for everyone robert oulds Al Jazeera Los Angeles now the International Labor organization has estimated the pandemic will eliminate 6. 7 percent of working hours globally this quarter thats equivalent to 195000000 full time workers. Well im delighted to say we have via skype from geneva sung here only hes the director of the Employment Policy department at the ilo sang were living through extraordinary times arent we and im guessing our best estimates as to how deep job losses will be during the crisis is obviously going to keep changing whats your prediction then in terms of the actual job losses and how difficult is it to compare this pandemic to past events. I think this is very uncertain and also its very hard to predict whats going to happen over the course of this year. Actually about it 2 weeks ago we actually made a prediction about around 25000000 job losses actually by the end of this year and at the time there was the opposition is based on the our over a. Prediction about the g. D. P. And also the password direction of the it is pandemic and also how the employment will be sensitive to this economic shock so the whole these are some so we made a 40 hour initial actually prediction turn us to be rather optimistic so that u. D. P. Is moving fast and also the pandemic crisis will last longer than expected and also more importantly it the way at employment is responding to the this economy shock in the lockdowns are large and quickly and you know large scale and was a very immediate so the this actually put us in a very difficult situation to put days to whats going to happen so we actually changed our methodology a little bit to look at the whats going to happen in the next 3 months thats something we did the same time looking at just the employment i mean have enough so you see it in a knot of the workers who manage to get you out but their working hours are shorter and sometimes on the paid leave and sometimes people have the temporary laid off so the improvement of figure doesnt necessarily convey the fruity to of the reality on the ground thats why they actually start to actually use the working hours so young so then whats your advice to governments during this time especially as more than 2000002000000000 people are about to go into lockdown i mean theres a lot of people who stand to lose their jobs yeah exactly thats the thats the irony. Concern i mean its a very important this is a crisis of fact opposed to labor demand and supply side a centime and a centime deal because we were in the business to mathematical passed you call it this crisis themselves so its crucial and very important for the governments to take immediate actions to support them. And so timing is everything of course the lot of governments are actually making very impressive move to announce the stimulus packages. Not a part of that is actually for exporting the business and workers but we have to move very quickly timing is everything and also the we should put in place a very strong delivery mechanism to make sure the workers and businesses are actually benefit from this extra support in kind any manner without any today lets just talk about developing countries if we can because the problem is a lot more difficult to get a grip of isnt it because of the huge Informal Sector economies in these countries how do you catch and support these individuals that i think this is basically the important question is specially for the informant workers as you notice the and then hes now spreading to Different Countries where typically more than 60 percent of the workers are informed workers normally in the crisis situation in former workers assume managed to actually do their Economic Activities but this time is different because the or kind of lock down the arrangement with or to restrict the movement and also the Economic Activities so they involve more jobs is not actually something actually these workers can can actually manage at the moment for this reason we think that the some sort of protection or income support from the government and community should be the key and International Community is moving very quickly to provide the necessary support for death so young let me get a final thought from you when we come through this what should our priorities be and whats your advice to governments. I think he is for us the job is to create because when you actually provide these spores to business and also to the other person measures for example through these stimulus package our recommendations or ways that the you have to give priority on the jobs and employment we know the we have regular girl lessons from the previous crisis for example over a fine a surprises in the 2008 and now. You see it is germany actually they are actually putting lots of emphasis on to making sure the workers maintain their jobs and that that is the focus of the sporting business as you are and other countries they are the less emphasis put in thats ever says on the top they mentions the the alcan is another contrasting in germany the improvement if any problem and the situation actually somehow is quite ok and then. We have a very quickly but in other countries like the u. K. And also the United States are you taste it took quite a long time to actually getting back to the normal level of employment and when it comes to the incomes and also over or the wages for example it took almost 10 years to get back to precrisis a lever so i think what kind of recovery we want and its very clear i mean we have to make sure the joshua with our priority good means that you could income and thats a good life for the workers and thats what it will the society wants so he only thanks for talking to counting the cost thank you thank you so much. Thats our show for this week but remember you can get in touch with us via twitter use the hashtag a j c t c when you do you can drop us an email counting the cost of aljazeera dot net is our address but theres more for you on line of aljazeera dot com slash c. T. C. That will take you straight to our page which has individual reports links and entire episodes for you to catch up on. But thats it for this edition of counting the cost on Darren Jordan from the whole team here thanks for joining us the news and aljazeera is next. Test. And trace frank assessments its only struggling to cope with the number 4 on the virus failure to take really aggressive action behavior for informed opinion its going to be much more challenging in a place like haiti where theres one play here very relieved people indepth analysis of the days global headlines india done enough to nip the spread of the one of ours in the inside story on aljazeera. Medieval western society it was a feudal society. If you keep going and assume most of pope ended his speech some people stood up and said well sit down and the entrance to the city was horrific they killed people in the streets in their houses and in. The crusades an arab perspective that the sold one shot. On a. Its context this is the thing in storytelling around the biggest issues but had to do it again. And you see what happened in italy you see what happened to spain you see what happened to friends. Joes guy should fail. Donald trump steps up as criticism of the World Health Organizations handling of the coronavirus pandemic. Alone can that al this is al jazeera live from doha also coming up this hour seen plenty of qana various cases some some people as young as in their twentys was