Why is this research relevant now?
“Banks play a crucial role in keeping the economy going, so if they really do get into trouble, the economic damage may be even greater than what we expect right now. If businesses are unable to repay loans because of the crisis, that will have implications for the criteria that banks will subsequently set when it comes to issuing new loans. Banks are often slow to discover any arrears, while the stock market is a quicker and more up-to-date way of seeing what is actually happening to companies and, consequently, to banks. By mapping out the actual economic damage to banks as early as possible, we hope that Dutch and European regulators will be able to intervene in time.”
What motivates you to do research on the impact of Covid-19?
“I enjoy my work as a scientist because I am able to learn and research new things. I’ve been working for the EUR for some twenty years by now and, in addition to teaching, I have mainly focused on relatively pure science. But I now feel the urge to explore the social impact more. I have a fairly specialised field and that has its limitations; my research is published somewhere in a journal and only a few dozen people around the world actually read it. It is useful, but before it has an impact anywhere, it can take years and can be very indirect. Nowadays, I mainly enjoy looking at how my expertise can contribute more to the public debate, and this happens to be a really good reason to do that.”
How do you manage to carry out research during a pandemic?
“Our research is based on data gained from share prices and banks. We run statistical analyses on these data, which you can basically carry out on your laptop from anywhere. The only influence the pandemic is having, is the fact that we are now meeting up online as researchers.”
What hypothesis do you base this research on?
“We expected banks to be hit hard by the crisis due to the pandemic. Meanwhile, we have been working on the study for several months and the data for March and April have confirmed this theory. Some serious losses had been predicted for the European banking sector, but the surprising thing is that share prices have already recovered significantly since April. There is a lot of discussion as to why those share prices have rebounded so well while the economic crisis is still going on. That question also forms a part of our research.”
What has changed in the stock market in the wake of the pandemic?
“In March, when the pandemic first hit, stock prices plummeted dramatically by about a third. That is huge and you hardly ever see that happen, given that it meant that one third of the economic value of Dutch companies practically disappeared overnight. When the lockdown was announced, a substantial positive adjustment played out on the market. This suggests that the stock market as a whole estimated that the corona measures were good for the economy in the long term. That makes for an interesting discussion about competition between healthcare and the economy.”
What has changed in your work as a consequence of the pandemic?
“The major change is that education is now all online. It was an exciting time in the beginning, which was good for the team spirit because we were all facing a huge issue that we had to solve together. Often innovation in education can take a long time and can also go wrong, but now it needs to go well within a very short period of time. That’s why, as a professional group, we tried everything that we could come up with and I think that this might also prove beneficial for the future, because now we have much more experience with digitalisation.”
“We have also started a series of studies related to the pandemic. Our research is typically long-term, and it usually takes years before a research project goes from the idea phase to publication. Instead, this research is much more topical and can have an impact on policy discussions. This requires another mindset, because the results of this research have to be made available soon. We’ve got to switch things up a gear.”
How are you experiencing the corona pandemic on a personal level?
“I actually quite enjoyed it in the spring. I did like working from home. My daughter was also not in school then, so I was able to spend a lot of time with her. Since then, I think it is a shame that we are stuck at home, because I miss my colleagues a lot. I miss the cohesion and the exchanges. I speak to a lot of people via Zoom, but that’s much more business-like, whereas on campus you could catch up for a chat afterwards and get a good sense of what was going on. I also miss the contact with students. The added value of studying at a university, especially at ours, is the interaction with lecturers who bring along their expertise and enthusiasm in order to explore a subject in depth together with their students. We are still trying to do that as well as we can, but it is pretty difficult.”
