Profiting on Crisis: How Predatory Financial Investors Have Worsened Inequality in the Coronavirus Crisis?

Covid-19 did not only lead to a health crisis but also to an unprecedented economic one which widened inequality gaps. Researchers tried to understand how “predatory financial investors” – i.e shadow banks, such as private equity, venture capital, and hedge fund firms -  have shaped the crisis, then affecting and increasing inequality levels.  

Authors argue that by accumulating capital through private and speculative investments that exploit vulnerabilities in the economic system during a time of crisis, financial investors profited from the Covid-19 global pandemic. According to them, by providing crucial funding for companies delivering health care innovations or protective equipment, investors benefited from the situation and shadow banks kept contributing to precarious working conditions and growing economic inequality, then reinforcing gender, racial, and social class inequalities.

Authors thus call for an increase control and regulation of shadow bank, that operate in the private sphere with limited oversight and divorced from the real economy, in order to prevent investors to capitalize on future crises.

To read more: https://journals.sagepub.com/doi/pdf/10.1177/0002764221100316