Longer-term scenarios willprovide valuable lessons forbanks The sections above cover what we consider the short-term issues and priorities for the retail and commercial banking industry. What the medium-term impacts of the COVID-19pandemicwillbeonthesectorwilldependverymuchonhowtheindustry itselfandgovernmentsreactoverthenextfewmonths. Theworst-casescenariocouldbeamaterialcreditcrisiswithhighlevelsofcharge-offs and sustained damage to the underlying economic infrastructure in many countries that will take years to recover from. Yes, the coffee shop that closes tomorrow could soon be replaced by a new coffee shop when demand returns, and it could hire the samebaristas,butthattypeofservicesectorresetcomeswithmaterialtransitioncosts. This worst-case scenario may also lead to medium-term ripple effects, all of which could limit GDP growth even when the current crisis is well past. If credit losses spiral, thisscenariomightalsoseverelyunderminethebankingsector,leadingtothetypesof rescues and rapid consolidation we saw in 2008. While it is too early to plan for these contingencies,ifthecrisisdeepensandthereisanegativereinforcingeconomiccycle, thestrongestbanksshouldstartpreparingtobepartofindustry-widerestructuring–as theywereadecadeago. 22 COVID-19: Open letter to retail and commercial banking CEOs