In recent days there has been a fully coordinated rhetoric of central bankers, who desperately plead for a new fiscal support so that the economies keep on growing with steadily higher rates and also so that to safeguard the result of the trillions first package. Even IMF underlined the fact that “now that we started to support the global economy, we cannot by any means retreat”.

The pandemic is expected to show a hard face before things get better. The second wave of the pandemic is tougher than the first and governments cannot stand taking again horizontal lockdown measures. Therefore, markets have already discounted that the low interest period will continue at least until 2025.

Government deficits are growing in an effort to support global economy and this generates new bond issues, which in these favorable circumstances, have low interest rate. This is a good scenario in this tough situation.

The upcoming months are expected to be tough for the global economy. Europe has already begun to implement strict local lockdowns and the consequences are already visible.

European stocks are lagging US stocks, European macroeconomic indicators are already peaking and as the pandemic deepens, the real economy will feel the pressure.

Under these circumstances, banks will come to an edge. With burdened balance sheets, with leverage not being an option anymore and with total profit margins almost at zero levels, bank sector cannot attract investment interest. In my opinion, with such high fees they charge on banking and investment transactions, in the next years, except of investment interest, they will also lack customer interest. It is absolutely justified that there are banking fintech (challenger banks), which have greater or the same capitalization with former banking giants.