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Greetings from our CEO

Venturing forth into the post-post-pandemic year

Dear Clients,

 

I sincerely hope that you had a happy and healthy start to the new year and made the best of the strange holiday circumstances caused by the pandemic for the second straight year. The changing of the year perhaps gave you a bit more leisure time than usual to read a good book, to get out and exercise in the fresh air or to enjoy lively conversations in intimate circles so that you can now get started into 2022 reinvigorated and recharged with positive energy.

But before casting our sights forward, let’s first take a look in the rearview mirror. What lingers (in memory) from 2021? Ships bearing names like Ever Given that are too big for the waterways through which they are supposed to pass. Real estate companies with names like Evergrande that are too large to be allowed to go bankrupt. Billionaires in space. An insurrectionist mob in the US Capitol building. Working from home in sweatpants. And, of course, the farewell of James Bond. But last year, above all, gave us a crash course on virology and epidemiology. We now understand a lot about antigens, antibodies and reproduction rates. We know that a virus gets transmitted as an aerosol in enclosed unventilated spaces and that such aerosols particularly get expelled by singing and shouting. We also know that vaccinations against RNA viruses have a limited period of effectiveness and do not prevent reinfection, and that superspreader events can occur. Last but not least, we have all learned the Greek alphabet by now (Omicron is followed by Pi, by the way). With such a thorough (advanced) education, we also ultimately know, though, that the latest (fourth) wave of COVID-19 in central Europe really couldn’t have come as a surprise. Experts last summer were already warning about the scenarios that came true in the end. Will the coronavirus pandemic ever leave us in peace? A return to normalcy is unlikely to proceed so swiftly, but where there is darkness, there is also light. Fortunately, the past two years of pandemic have also shown what impressive feats medical research is capable of achieving these days. Vaccines adapted to the Omicron variant may already become available in a few weeks’ time. And with a bit of luck, it may soon turn out that the pathogenic potential of the latest (or future) mutations is fading. This wouldn’t be unusual in the evolution of pandemics and in the way that viruses work and could pave the way to COVID-19 becoming endemic. We then would continue to have to live with the coronavirus, but we would surely be able to cope with that.

But enough about the pandemic. Besides COVID-19, there will be no shortage of additional challenges in 2022. China is rattling its saber at Taiwan, Russia is doing the same on its border with Ukraine, and Iran may soon acquire the ability to build atomic weapons – only North Korea has been a little less in the news lately. The fact that the (former) world power called the USA could potentially see itself compelled to confront challenges on three fronts this year likewise cannot come as a surprise, at least not to observers of geopolitics. America looks weak in the aftermath of its chaotic withdrawal from Afghanistan last summer. This heightens the temptation for Russia, China and Iran to try to redress old grievances or push forward with long-held ambitions. Xi Jinping and Vladimir Putin admittedly seem unlikely to talk directly about coordinated military action, and the idea of a three-way conference also involving Iranian President Ebrahim Raisi is surely the stuff of fiction. But even if there is no unified plan that connects the aims of Beijing, Moscow and Tehran, there is at least a certain degree of shared analysis and vigilance. The Biden administration will not explicitly take the military option off the table in any of these three conflicts, but most likely will employ economic and diplomatic weapons as a means of first resort. We thus hopefully should be spared from major armed conflicts in 2022. However, geopolitical developments look set to further the trend toward deglobalization.

 

"We can contribute to halting climate change not just through our daily actions, but also via our assets."

Christian Reich, CEO Kaiser Partner Privatbank

While most of us are merely idle observers in the realm of geopolitics, other issues have been hitting closer to home lately. One of them is cyberattacks, which not only affect governments and corporations, but can also harm us as private individuals. And let’s not forget inflation. This more or less abstract, extremely complex statistic that can have a wide range of causes, does not progress linearly and is hard even for central banks to predict – thus truly possessing an element of surprise – has made a comeback for the first time in over a generation. But even fears about the debasement of money pale in the face of a much bigger threat: that of ever accelerating climate change. Be it hurricanes and tornados in the USA, droughts in South America or floods in Germany, there were plenty of object lessons in the dangers of climate change again last year. The Intergovernmental Panel on Climate Change just recently made it clear in black and white that global warming is caused by humans. The effects of climate change are exponential: they increasingly worsen as the Earth warms. They pose not “only” a threat of rising temperatures and melting icecaps, but also of water scarcity, mass migration, food shortage crises and a loss of prosperity.

 

The time to take action is now. The present decade presumably gives us a brief remaining window of opportunity to hurry to restrain temperatures from rising by more than 1.5 degrees Celsius. Private investment capital will have a key role to play in achieving this. Enormous investments in renewable energy, electromobility, infrastructure and new technologies are needed to bring about the necessary greenhouse gas reductions. Responsibility and opportunity roll into one here for investors. We can contribute to halting climate change not just through our daily actions, but also via our assets – be it in dialogue with companies or through dedicated impact investments. Kaiser Partner Privatbank, in its role as a sustainability pioneer in Liechtenstein, will continue to assist you in this area this year by, for example, further expanding our private markets offerings. I look forward to joining you on the challenging but exciting journey ahead of us.

Yours sincerely,
Christian Reich

Christian Reich (1972) Formerly a member of the management board of Liechtenstein’s Financial Market Authority he has a very good knowledge in banking operations. He has been a member of Kaiser Partner Privatbank AG's management board since 2011 and has been chairman of the board since 2015.

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