In my 44 years in finance, I have never experienced anything like what we’re seeing today. When I originally sat down to write my annual letter to BlackRock’s shareholders, I was in my office, thinking about how to describe the events of 2019 and what BlackRock achieved last year. Today that seems a distant reality. BlackRock’s offices globally are nearly empty and instead, I write to you in isolation from home, like millions of other people. Since January, the coronavirus has overtaken our lives and transformed our world, presenting an unprecedented medical, economic, and human challenge. The implications of the coronavirus outbreak for every nation and for our clients, employees and shareholders are profound, and they will reverberate for years to come.
The virus has taken a severe toll. It has killed or sickened hundreds of thousands, and even for the healthy, it has dramatically altered daily life and threatened financial security. For governments, it has presented the astounding challenges of implementing quarantines on a scale never before seen and of responding to the economic and financial fallout from them. For the private sector, it has upended how companies operate and the demand for their products and services, with small businesses and their employees invariably shouldering the greatest burden. And medical professionals, in almost all cases operating with insufficient supplies and a lack of hospital capacity, are faced with wrenching decisions about how to keep the most people alive. These medical professionals, on the front line in this crisis, are today’s heroes.
The outbreak has impacted financial markets with a swiftness and ferocity normally seen only in a classic financial crisis. But it has not simply pressured financial markets and near-term growth: it has sparked a reevaluation of many assumptions about the global economy, such as our infatuation with just-in-time supply chains and our reliance on international air travel. Even more profoundly, people worldwide are fundamentally rethinking the way we work, shop, travel, and gather.
Although 90 percent of our employees are now working from home, we are working hard to remain connected to the communities that we serve. BlackRock is contributing $50 million to the immediate relief of those who are most affected right now, and to help address the financial hardship caused by this pandemic. We are also committed to assisting governments around the world as they navigate the financial stresses of this crisis and to support their economies. Work like this – focusing our expertise and capabilities on major public challenges – is core to our purpose. BlackRock’s biggest responsibility – now more than ever – is to help our clients navigate this market environment.
As dramatic as this has been, I do believe that the economy will recover steadily, in part because this situation lacks some of the obstacles to recovery of a typical financial crisis. Central banks are moving quickly to address problems in credit markets, and governments are now acting aggressively to enact fiscal stimulus. The speed and the shape of these policies are deeply influenced by the world’s experience during the global financial crisis in 2008. I also believe their actions are likely to be more effective and work more quickly since they are not fighting against the same structural challenges as they were a decade ago.
That is not to say the world is without risk, nor to suggest that the market has reached its bottom. It is impossible to know. There are also significant challenges ahead for heavily indebted businesses, and if governments are not careful in the design of their stimulus programs, the economic pain from the outbreak will fall disproportionately on the shoulders of the most economically vulnerable individuals.
At BlackRock, we are working to keep a long-term perspective on this crisis – as we always do – while helping our clients, our communities, and the countries where we work and live navigate this extraordinary and difficult environment.
This article was originally published on LinkedIn and is a condensed excerpt from Larry Fink’s annual Chairman’s Letter to Shareholders, published on March 30, 2020. For the full letter, please visit BlackRock’s corporate website.