While the pandemic is mostly behind us, 2023 has proven to be just as tumultuous as the Covid-19 era. Significant financial disruptions marked the year, including bank collapses, generative AI’s ubiquitous presence, climate-related disasters, widespread worker strikes, and the ongoing Israel-Hamas conflict. Join us as we navigate through the major upheavals in finance over the past year :
Bank Collapses : In 2023, three of the four largest US banks faced failure: Silicon Valley Bank and Signature Bank in March, followed by First Republic Bank in May. Regulators intervened to prevent contagion, but the banking industry felt the impact, possibly contributing to credit tightening.
Generative AI Takes Center Stage : March witnessed the introduction of GPT-4 by OpenAI, the advanced successor to the groundbreaking ChatGPT. Companies rushed to invest in generative AI, propelling Nvidia, the technology’s chip provider, to a staggering $1 trillion valuation in June. Despite concerns about human fallibility in AI development, the technology seems here to stay.
Climate-Related Disasters : 2023 set alarming climate records, marking the hottest year in history. Record-high temperatures led to disasters like wildfires in Maui and Canada, extreme heat in the US, EU, and China, and deadly typhoons in Africa and Southeast Asia. The US alone experienced a record-breaking 25 billion-dollar disasters, emphasizing the urgency for companies to evaluate climate risks.
Workers Unite : In 2023, workers across various sectors, from autoworkers to pharmacists, hospital employees, actors, writers, and baristas, engaged in strikes or walkouts. With 453,000 US workers participating in 312 strikes, many proved successful, resulting in increased pay and improved benefits. However, some, like the United Auto Workers strike against Stellantis, incurred significant costs for employers.
The Israel-Hamas Conflict : The global economic impact of the ongoing conflict remains uncertain, contingent on the involvement of other nations. Volatility in oil and gas prices has been evident since the conflict’s initiation, with Goldman Sachs warning of potential trade and consumer confidence dampening in the EU. Economists speculate that an escalation could push US gas prices above $5 per gallon, contributing to inflation, though the conflict’s trajectory remains highly uncertain.
2023 unfolded as a year marked by financial upheavals. From bank collapses to the rise of generative AI, climate-related disasters, widespread worker strikes, and the ongoing Israel-Hamas conflict, the landscape of finance faced unprecedented challenges. As industries grappled with these disruptions, the year underscored the imperative for companies to adapt to evolving climates, both environmental and socio-economic, navigating the complex terrain of a rapidly changing global landscape.
