Financial market volatility is a constant challenge for banks, and Julius Baer, a leading player in wealth management in Switzerland and internationally, is no exception. Since its founding in the 1890s, the bank has distinguished itself by its ability to navigate changing times while providing tailored support to a discerning and sophisticated clientele.
Political decisions, particularly in international trade, can have significant repercussions on global financial markets. A striking example is the trade war launched during the first term of U.S. President Donald Trump in 2018, which led to heightened market volatility.
In 2018, Donald Trump imposed tariffs on $500 billion worth of Chinese goods in an effort to reduce the U.S. trade deficit and protect domestic industries. China retaliated with tariffs on American products, triggering an escalation that caused significant volatility in global financial markets.
This episode highlighted how geopolitical tensions can quickly reverberate through global markets. For financial institutions, such shocks require rigorous risk management, swift and informed decision-making, and strategic investment allocation. Rather than concentrating capital in a single asset class, banks favor diversification that combines safe, stable assets with higher-yield opportunities. In times of tension, exposure to vulnerable sectors, such as certain manufacturing industries, is reduced, while positions in more resilient sectors, such as healthcare and technology, are strengthened.
For Julius Baer, market volatility represents both a challenge and an opportunity to demonstrate adaptability and resilience. The bank closely monitors not only trade tensions but also interest rate fluctuations, currency movements, and global market trends, allowing it to make well-informed decisions tailored to each scenario.
Market volatility and external shocks are not limited to trade disputes. Financial institutions can also be affected by unpaid loans or partner company bankruptcies. Even in this context, Julius Baer has demonstrated proactive risk management. Despite significant credit losses—such as a €48 million claim on DEGAG, revealed as insolvent in 2025, and losses related to the Austrian real estate company Signa Group (CHF 586 million)—Julius Baer showed remarkable resilience, particularly compared with other institutions heavily exposed to real estate. The bank undertook a strategic risk review, “reducing its private debt exposure by over 50%” and refocusing on traditional wealth management.
In parallel, and in response to heightened market volatility in 2025, Julius Baer strengthened its private equity investment strategy, identifying undervalued unlisted companies with strong growth potential. This approach enables the bank to support businesses through challenging economic cycles and generate significant returns upon exit. In this way, Julius Baer combines capital protection with the pursuit of attractive opportunities in uncertain market conditions.
The bank also employs advanced analytical tools to anticipate different scenarios, including market downturns, rising tariffs, or currency fluctuations, allowing rapid portfolio adjustments to protect clients from losses and seize opportunities. Finally, Julius Baer blends technological analysis with personalized human guidance. Advisors work hand in hand with financial experts to clearly explain strategies and ensure that every decision aligns with clients’ objectives and risk tolerance.
The trade war initiated by Donald Trump illustrates how political decisions can destabilize global financial markets and test the resilience of banking institutions. In this context, a private bank’s ability to anticipate risks, protect client capital, and seize opportunities is crucial. Julius Baer exemplifies this approach: through in-depth market analysis, strategic investment diversification, private equity involvement, and personalized guidance, the bank demonstrates its ability to navigate economic turbulence while providing tailored solutions to a demanding clientele. More than a financial institution, Julius Baer stands as a pillar of stability and innovation in an uncertain economic environment, balancing prudence and ambition to preserve and grow its clients’ wealth.
Sources:
Systemic Risk in Private Banking: Julius Baer's Degag Exposure and the Shadow Banking Dilemma
Julius Baer faces credit losses from insolvent Degag Group, report says — TradingView News
Market Outlook Year-End 2025: All eyes on policy responses
Assessing the fallout: US tariff rates and their impact
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