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Though the pandemic’s largely in the rearview mirror, 2023 has been every bit as volatile as the Covid-19 era was. Bank crashes, natural disasters, and devastating wars in the Middle East and Ukraine were among the events that had the biggest impact on finance this year. (And that’s not even counting the looming singularity.) Buckle up, CFOs, as we take you through the biggest finance disruptions of the past year:
Bank collapses: Three of the US’s four largest bank failures took place this year: Silicon Valley Bank and Signature Bank in March, and First Republic Bank in May. Regulators stepped in and prevented contagion, but the banking industry was rattled. The crisis may have contributed to credit tightening, Reuters surmised.
Generative AI became inescapable: In March, OpenAI rolled out GPT-4, the more advanced successor to its already-groundbreaking chatbot ChatGPT. Companies scrambled to invest in generative AI, and Nvidia, whose chips power the technology, was valued at $1 trillion in June. Though the recent shakeup at OpenAI has highlighted concerns about the fallible humans developing generative AI, the technology itself appears to be here to stay.
Climate-related disasters: We broke all the records this year—and not in a good way. 2023 was the hottest year in recorded history, with five straight months of record-high temperatures. The warming climate contributed to natural disasters such as wildfires in Maui and Canada; extreme heat in the continental US, the EU, and China; and deadly typhoons in Africa and Southeast Asia. The US alone saw a—yes—record-breaking 25 billion-dollar disasters this year, underscoring the need for companies to assess their climate risk.
Union’s been on strike: Workers from a wide variety of occupations, from autoworkers to pharmacists, hospital employees, actors, writers, and baristas, went on strike or walked out in 2023. Some 453,000 US workers took part in 312 strikes this year, according to Cornell’s Labor Action Tracker. Many of the strikes were successful, from workers’ perspective, resulting in payincreases and better benefits. But some proved costly to employers: Stellantis, for instance, lost $3.2 billion in the United Auto Workers strike.
The Israel-Hamas war: The effect the conflict will have on the global economy is yet to be determined, and rests largely on whether other nations become involved. Oil and gas prices have been volatile since the conflict started. Goldman Sachs predicted that it could dampen trade and consumer confidence in the EU. Some economists have suggested that if the war escalates, gas prices could rise above $5 a gallon in the US, contributing to inflation, though they note there’s great uncertainty about the course the conflict will take.