Prepare forLosses Regardlessofhoweffectivebothgovernmentandbank-sponsoredcreditmodification and forbearance programs prove to be, NPLs will undoubtedly rise in both the retail and commercial sectors. Banks need to increase their capacity to deal with rapidly increasingvolumesofdelinquentaccounts.ForbearanceprogramsmaypushthisNPL surge out for 90 to 120 days, but there will be many businesses and consumers who, evenafterthatperiod,willnotbeabletomaketheirnextpayment. Thiswillalsobethefirstcreditcrisisinwhichcreditinvestmentfundsaretheownersof large swathes of middle-market and commercial assets. We don’t know how they will respondtoastressedpaymentssituationsuchasthisandtheiractionscouldbeacycle amplifieriftheylooktotakequickwrite-downsandrecoverassets. Some of the first causalities of the crisis have been a number of commercial REITS in the US who have been unable to make margin calls and whose lenders have initiated asset sale and recovery procedures. So,inadditiontoconsideringrepaymentholidays,nowisthetimetobuildcapacityto deal with delinquent and defaulting loans. Staff should be trained not only to handle anincreasedvolumeoftypicalrecoveryprocedures,butalsotoaddresscustomers’ creditissuesempatheticallyandconstructively,takingfulladvantageofwhateverbank- specific or government-sponsored loan modification and refinancing programs are in place.Inthisrespect,augmentingstaffwithintelligentmachinescanbehugelyhelpful inboostingbothproductivityandthequalityofcustomerengagement,butthepriority needs to be an authentic, human, and sympathetic response that builds trust. 10 COVID-19: Open letter to retail and commercial banking CEOs