There would be various reasons for that: • First, financial institutions change their risk preferences, especially as a result of disappointed confidence or an expected recession. At least for a while, there may be a higher risk aversion overall. • Second, financial institutions find themselves subjected to an erosion of their capital base.
It would be a great tragedy were we to stop the wheels of progress because of an incapacity to assist the victims of progress. Our efforts should be directed at job skills enhancement and retraining – a process in which the private market is already engaged.