news conference berne, 16 june 2022 fritz zurbrugg introductory remarks by fritz zurbrugg in my remarks today, i will present the key findings from the new financial stability report, published this morning by the swiss national bank. economic environment in the period between the publication of the last financial stability report and the end of 2021, economic and financial conditions for the swiss banking system remained favourable. gdp has returned to, or even exceeded, pre - crisis levels in most countries and unemployment rates have receded globally. corporate ratings have improved and credit quality has remained high. however, these conditions have recently become more challenging, due to both the war in ukraine and rising inflation around the world. as my colleague thomas jordan has explained, the snb ’ s baseline scenario assumes that the impact of the war in ukraine on domestic economic activity and inflation will be temporary and moderate. however, the economic outlook is subject to very high uncertainty regarding the development of financial and monetary conditions as well as economic activity. this environment presents various risks for financial stability. first, the deviation between market prices for residential real estate and the price level that can be explained by fundamental factors, such as income and rents, has continued to increase in many countries, including switzerland. second, stock valuations in some markets remain high despite recent corrections. third, sovereign and corporate debt levels rose significantly during the coronavirus pandemic. these vulnerabilities increase the sensitivity of the economy and of financial and real estate markets to adverse shocks. i would now like to outline the position of the two globally active banks, credit suisse and ubs. i will then present our assessment of the situation at the domestically focused banks. page 1 / 3 berne, 16 june 2022 fritz zurbrugg news conference globally active banks the two globally active banks developed differently in terms of profitability. ubs ’ s profitability increased and was high by historical comparison. at credit suisse, however, profitability was negative. this is on the one hand due to extraordinary items, such as large provisions for litigation, and on the other to relatively low operating performance during the period under review. the differing profitability is also reflected in market indicators such as cds premia and stock prices. after the archegos losses, the market drew a stronger distinction between the two banks and it continues to have a more positive assessment of ubs than credit suisse. with the outbreak of the war in ukraine, the market ’ s assessment

philipp hildebrand : financial market turbulence and the economic outlook summary of a speech by mr philipp hildebrand, vice - chairman of the governing board of the swiss national bank, at the handels - und industrieverein des kantons bern, burgdorfemmental section, burgdorf, 25 october 2007. the complete speech can be found in german on the swiss national banka€™s website ( www. snb. ch ). * * * it is very difficult to assess how the shifts in the credit markets triggered by the us sub - prime mortgage market will impact on the real economy. as a result, the uncertainties with regard to the economic outlook have increased considerably. the evaluation of structured credit products, some of them very complex, is based on models. because of the difficulties this evaluation poses, the market for such products gradually disappeared. the uncertainty as to the degree of exposure of individual banks in the structured credit market led to illiquidity in the unsecured interbank market. central banks around the world have reacted to this unusual situation with injections of liquidity. an adequate supply of liquidity to the economy is essential for our economic system to function. a favourable aspect of the situation was the fact that the credit market turbulence occurred at a time when the global economy and the swiss economy were both in good shape.