This article originally appeared in the May 2025 edition of MortgagePoint magazine, online now.
Pierre Buhler, Managing Director at SSA & Company, brings over two decades of strategy and restructuring expertise to bear on some of the most urgent issues facing today’s financial institutions.
With a background steeped in guiding companies through transformation and turbulence—including founding operations intelligence provider CKM Analytix and serving tenures at Chase Manhattan Bank, Charterhouse London, AlixPartners, and Mitchell Madison Group—Buhler offers a clear-eyed view of where the banking industry stands several months into 2025.
In this exclusive interview, he lays out five critical insights into the challenges banks face in an increasingly volatile global landscape—and what industry leaders must monitor to stay ahead.
1. A Quadruple Threat to the Banking Sector
If the post-pandemic economy has been defined by complexity, Buhler believes the banking sector is now grappling with a convergence of four dominant—and potentially destabilizing—forces. “We have a risk of a recession,” Buhler said. “That’s a global risk, and that risk is increasing … I would expect that this year we’ll see a recession. Hopefully, not a complete depression.”
Alongside recession fears, Buhler notes concerns about credit quality, with delinquencies beginning to tick upward.
“When you see the 30 to 90 days or the above 90 days delinquency on some loans seems to be increasing, that tells me there seems to be vulnerability on credit quality.”
The specter of prolonged interest rate volatility is a third concerning factor. Buhler explains that “Interest rates remain high and very volatile. I don’t believe the volatility will necessarily go away when you think about the dance that happens between the deficit, between the yield, between the potential risks that we have.”
Finally, tariffs remain an elephant in the room—especially those affecting imported materials, which are threatening to drag down critical sectors such as construction. “The tariffs are presenting a dark cloud above what we see,” Buhler said. “A lot of materials get imported from China at 145%. That’s a disaster. That’s a disaster for construction. It’s not just the people. The cost of materials is about to go up.”
2. What the Industry Should be Watching
With headwinds mounting, Buhler emphasizes the importance of closely monitoring bank earnings—especially specific balance sheet indicators that can flag emerging vulnerabilities.
“I’m looking at the common equity tier 1 capital ratios (CET1) like a hawk from a balance-sheet standpoint. Any variation on that would be important,” said Buhler, adding that “if it degrades, it’ll tell us a lot.”
Buhler notes that capital ratios are critically important as “they summarize the flexibility that a bank might have in its balance sheet to do certain things. JPMorgan Chase is in the upper 15%,” explains Buhler, “and I was looking at another small bank, which is at 9%. That’s an enormous spread if you think about that.”
Buhler is also watching shifts in consumer behavior—particularly the types of debt and credit consumers are seeking out. “We are moving some potentially long-term debt into very short-term instruments that are not measured consistently by all the banks or by the market in general.” Buhler notes that if credit card balances continue increasing, we could be at risk of “getting back to a subprime situation.” These signals, Buhler warns, could offer early warning signs of larger economic turmoil to come.
3. Non-Banks Primed to Step Up?
Buhler told MortgagePoint that traditional banks and lenders are already showing signs of caution amid current economic uncertainties.
“The banks are extremely conservative and are remaining very conservative, which will further the availability of loans as they take the minimum amount of risk they can take,” Buhler explains.
As banks retreat, non-bank financial institutions may increasingly step in to fill the void. “There will always be players willing to take more risks.”
Buhler notes that, while this may boost short-term liquidity in underserved sectors, these players face higher risk—and are unlikely to benefit from the same safety nets afforded to regulated banks.
Buhler does note a silver lining, however: the industry’s vastly improved ability to use data to manage risk. “The ability that the banks have to exploit data … allows them to micromanage at a much lower level, which was not possible [in 2008]. They don’t just need to smell the coffee. They can see the color of the coffee and the size of the grain.”
4. Policy Uncertainty and Geopolitical Fallout
With ongoing uncertainties in the regulatory environment adding to the industry’s stress points, Buhler said that reductions in federal spending could be another factor to send ripples throughout the financial system.
The Trump administration’s push for deregulation may help boost efficiency in various areas, but it also removes safeguards. “From a government standpoint, the policy changes will tend likely to be more towards liberalization and elimination of boundaries versus creating new limitations,” Buhler said. “At that level, I don’t believe it’ll necessarily impede the businesses and the banks. It may not benefit the final consumer, but from a purely economic standpoint, it could create more efficiency.”
5. Who Bears the Brunt?
With so many macroeconomic factors in play, Buhler expressed concerns about who will be most affected by the waves being created.
“We have to wonder who will suffer the most,” Buhler said. “I don’t believe it’s an equal risk for everyone.”
Buhler pointed to rising credit card rates and shrinking access to credit as likely outcomes in the months ahead.
“You’re about to see interest rates on credit cards going through the roof,” Buhler said, noting that the economic shifts will likely compound to make less fortunate people, even less fortunate.”
