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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 40 May 2025 F E A T U R E S T O R Y PIERRE BUHLER ON THE BANKING SECTOR'S CROSSROADS As banks navigate rising recession risks, tightening credit, and tariff-driven uncertainty, the financial landscape is shifting. In this debut of our "Five Points" feature, Pierre Buhler of SSA & Company outlines five critical forces reshaping the sector—and what they signal for housing finance and the broader economy. B y DAV I D W H A R T O N P ierre Buhler, Managing Direc- tor 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 Lon- don, AlixPartners, and Mitchell Madi- son 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 I f the post-pandemic economy has been defined by complexity, Buhler be- lieves 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 necessar- ily 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 threaten- ing 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 W ith headwinds mounting, Buhler emphasizes the importance of closely monitoring bank earnings—es- D A V I D W H A R T O N , Editor-in-Chief of MortgagePoint, has 20 years' experience in journalism, having worked for the Five Star Institute since 2017. Wharton has an extensive and diversified portfolio of freelance material, with published con- tributions in both online and print media publications. He can be reached at David. Wharton@thefivestar.com. Q & A Five Points