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.
3 Speech made on 22 January 1988 during the celebration of the anniversary of the signature of the Elysée Treaty. 4 Speech assessing the German Presidency, before the European parliament – 29 June 1983. 3/3  BIS central bankers' speeches