If one adds the insurance sector, that number is closer to 14 percent. That percentage has increased significantly since 1990 from a total of 10% of GDP or less than 7% for the banking sector only. Importantly, this does not take into account the many economic activities which are directly linked and in many cases dependent on a vibrant financial sector. In terms of employment, the financial and insurance sectors together employ approximately 185’000 people or 6% of total Swiss employment. The total federal and local tax contribution of the Swiss banking sector amounts to an estimated CHF 13 billion or 13% of total tax revenues. A mere perfunctory consideration of these figures should suffice to underline the importance of defending and maintaining Switzerland’s status as a leading global financial center. In a 1974 study, Charles Kindleberger traced the history of financial centers in Western countries. What is striking about Professor Kindleberger’s historical findings is that nothing should ever be taken for granted. Not unlike tides, cities and countries as international financial centers rise and fall. For the most part, this rise and fall seems to reflect dynamic criteria such as transportation infrastructure, political stability and regulatory patterns.1 Since the 1970s, the competition amongst international financial centers has of course become genuinely global with diverse places such as Luxembourg, Singapore, Hong Kong, Dubai and, most recently, Shanghai joining the race. Switzerland has good reasons to be confident about its ability to defend its status. Most importantly, it sets out from a position of strength.

News conference  Zurich, 17 December 2020 Fritz Zurbrügg  Introductory remarks by Fritz Zurbrügg In my remarks today, I will begin with the developments in the Swiss banking sector environment. I will then provide an assessment of the current situation at the two globally active big banks, Credit Suisse and UBS, as well as at the domestically focused banks. Finally, I will talk about the impact the coronavirus pandemic is having on the use of cash. Banking sector environment  Economic conditions for the Swiss banking sector continue to be difficult. As already mentioned by my colleague Thomas Jordan, while global GDP has recovered somewhat since the downturn in the second quarter, in most countries economic activity remains well below its year-back level. As a result, credit risks in particular have increased worldwide, with ratings of corporate bonds deteriorating significantly over the course of the year. In comparison with the real economy, the situation on the global financial markets has eased considerably more since the spring. Risk premia on corporate bonds rose markedly after the outbreak of the pandemic, but have since largely declined again. Stock prices have also recovered from their downturn in February and March. The steep recession has thus far had very little impact on the Swiss credit and real estate markets. Lending volume in the mortgage market and prices in the residential real estate market continued to rise in the second and third quarters of 2020. Furthermore, the number of bankruptcies and value adjustments on existing loans has remained low.