of recessions on banks become evident. in the baseline scenario, the profitability of domestically focused banks is likely to come under further pressure. first, the anticipated deterioration in credit quality is expected to lead to increased value adjustments and write - downs on loans to swiss companies. second, the interest margin is expected to narrow further due to the persistent low interest rate environment. while domestically focused banks should remain profitable in aggregate, against this background, some of them are expected to incur losses. uncertainty about the future course of the coronavirus pandemic remains high. in this context, the increased vulnerability of the domestic mortgage and residential real estate markets presents an additional risk factor for the banks. should the impact of the pandemic on household and corporate income be much greater than currently assumed, it could trigger a price correction in the real estate market. equally, such declines in income could lead to a materialisation of the historically high affordability risks. both of these developments would negatively affect the quality of the banks ’ mortgage portfolios. given these challenges, the available capital buffers of the domestically focused banks are a crucial element for their lending capacity and loss - absorbing capacity. the snb ’ s scenario analysis indicates that, in aggregate, domestically focused banks would also be in a position to absorb the losses incurred under significantly more adverse conditions than assumed in the baseline scenario. use of cash this brings me to the last section of my speech in which i will talk about the impact the coronavirus pandemic is having on the use of cash. there are currently two main developments. for one, banknote circulation in switzerland rose sharply during the first wave of the pandemic in spring. this increase was mainly driven by the demand for large denomination banknotes and indicates an increased desire to hold reserves in the form of cash. second, available data on card payments and cash withdrawals from atms suggest that for payment purposes, cashless methods are currently being used more than prior to the pandemic, while cash is being used less. following the easing of containment measures, the amounts paid with cards have risen above their pre - crisis level. by contrast, the volume of cash withdrawn at atms continues to be slightly below its pre - crisis level. how much of a long - term impact these developments will have on the use of cash remains to be seen. the survey on payment methods, which the snb carried out this autumn for the second time since 2017, will provide us with more information on

success story and that the so - called pre - in countries will join the euro as early as possible. in the light of the desirable early enlargement of the number of participants, at the points where there are still differences between the eurosystem and the “ pre - ins ” in the monetary policy field, a further “ convergence process ” would undoubtedly facilitate the entry into monetary union. furthermore, given the exchange - rate criterion set by the maastricht treaty, the question likewise arises for sweden and the uk as to accession to the ems ii system. but i am deliberately refraining from going into that tonight. at any rate, i should welcome it if the eu country sweden were soon to take the final step into european monetary union. without a country of such rich tradition and strong economic performance as sweden undoubtedly is, european monetary union remains incomplete. that is why we were all delighted that sweden ratified the maastricht treaty. myself, i am quite convinced that one day it will take advantage of the options the treaty envisages, meet all the convergence requirements and join the monetary union. but the decision rests, of course, with the swedes themselves. all i can say is : you are warmly welcome.