Page 2 of 2

A good first half won't guarantee a continuation in the same vein. The trajectory of the pandemic means that economic uncertainties prevail and get more serious. The expectations aren't great. Here are four aspects to remember:

1. Big Risks in Major Growth Markets

The U.S. and Asia are important growth markets for Swiss banks, in particular for wealth management. With a highly problematic situation in the U.S. (corona-spread, elections) and Asia (corona, China, recession), the question is how well the Swiss banks will be able to continue their business in those regions. Is virtual contact going to be enough in the future?

2. Geopolitical Dangers

The major geopolitical risks will be exacerbated by the slow economic development. It isn't only about a conflict between the U.S. and China, but also other regions of this world, mainly in Asia – where political tension spell trouble for the economy.

3. Weak Dollar

The dollar has caved in recently, which seemed an obvious reaction to the extremely expansive monetary policy of the Fed. Gold and other precious metals rose. This could lead to higher inflation expectations and might narrow the scope for central bank measures. Financial markets could get into trouble and that would be negative for the banking industry.

4. Potential Crash

What may further the risks described under 3. is a renewed economic weakness after a second or third wave of corona-infections. Stocks are very expensive and valuations seem detached from economic reality.