This Is No Black Swan

As the coronavirus gripped Europe and America in March and April, it was clear that banks had a number of issues to deal with. Suddenly shuttering branch doors, closing head office and asking staff to stay at home, became the modus operandi for all. This is something that no major financial institution had planned for, but my question is: why?

Oh, it’s a black swan event.

Well, no. It wasn’t a black swan event at all. It was completely predicted and predictable.

Bear in mind that the definition of a black swan event, according to Investopedia is “an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.”

This was not unpredictable. The US government, UK government and many other governments had scenario planned such events and simulated them, and many fictional movies and books have outlined such events occurring. We have had SARS and ebola and other diseases, so we all knew there would be a pandemic one day. There’s even a game named Pandemic which played out such situations.

In fact, The Week makes clear what we all know:

The 2011 Steven Soderbergh film, Contagion, starring Matt Damon and Gwyneth Paltrow. It grossed $135 million in the domestic box office and is currently one of the hottest films in the Warner Bros. library. The origin of the virus in that film even echoes what many scientists think occurred with the coronavirus. Hollywood wasn’t making brainy thrillers about Wall Street mortgage derivatives in the early 2000s.

Moreover, in the years since the 2009 H1N1 flu outbreak, which killed more than 12,000 Americans, there have been numerous studies and public speeches from experts warning about a systemic lack of preparedness. A 2014 Department of Homeland Security study said the U.S. was ill-equipped to handle a pandemic. In 2018, the head of the World Health Organization warned, “A devastating epidemic could start in any country at any time and kill millions of people because we are still not prepared.” Also in 2018, Microsoft cofounder Bill Gates said he had raised the issue of a “large and lethal” pandemic with President Trump.

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