More US banking turmoil, wider economic fallout, the Federal Reserve losing its inflation focus and even a “financial crash” are among a panoply of dangers troubling economists gathering by Lake Como.

“Very, very pessimist,” is how Valerio De Molli, host of the meeting in Italy on Friday, described sentiment among leading observers about prospects for the world after turbulence that tested monetary officials’ nerves from Washington to Frankfurt. Nouriel Roubini, chairman of Roubini Macro Associates, articulated the gloom.

“We’re entering a recession and financial instability having to raise interest rates because the inflation is too high, so we get inconsistency and a trilemma: We cannot achieve price stability, maintain economic growth, have financial stability at the same time,” he told Bloomberg Television. “So eventually we’ll have an economic and financial crash.”

That comment — from a man with a track record of predicting doom — was admittedly the most alarmist observation on threats persisting to the global economy and financial markets after rising interest rates, deposit flight and investor panic provoked the demise of Silicon Valley Bank, Signature Bank and Silvergate Capital Corp.

Arguably more dangerously, it led to the downfall of a globally systemic institution, Credit Suisse Group AG. While the European House-Ambrosetti meeting in Cernobbio is just a short walk away from Switzerland, where that drama recently unfolded, menaces further afield within the US banking system concerned participants most.

“You always have to worry about what evil lurks around the corner,” said Ellen Zentner, chief US economist at Morgan Stanley. “With financial plumbing, you just don’t know.”

For her, risks in the shadow banking system are one concern because it’s “very difficult to understand the size of it.” Zentner also highlighted stress around commercial real estate that might impact US regional banks already nursing large mortgage portfolios.

“You might have a sort of a random report of a large office property owner just turning in the keys,” she said. “That can start to snowball with concerns about what other losing properties are out there that the banks might have to absorb onto their balance sheets.”

Meanwhile lingering doubts surrounding deposits in such institutions are what trouble Gene Frieda, global strategist at Pimco. He said even an “implicit guarantee” that policymakers have effectively offered isn’t enough to stop stress.

“It doesn’t seem like the US has fully gotten a handle on the uncertainty around bank deposits and bank depositors, uninsured deposits, and as a result I think everyone is on heightened alert,” he said. “We think the risks are sufficiently high that you do want to play it quite safe.”

One vulnerability revealed by the UK bond market crisis of 2022 and by the SVB failure was how bonds no longer serve a traditional role as a safe asset, he said, warning that more such instances may follow.

By contrast, Mohamed El-Erian, chief economic adviser at Allianz and a Bloomberg Opinion contributor, offered more sanguine views on the banking episode. But he has other concerns instead.

“Banking is based on trust and if trust goes out the window, bad things happen,” El-Erian said, adding that “economic contagion” is what will now follow. “I actually worry less about a banking crisis, as much as I worry about the consequences of what we’ve already seen,” he added.

The problem for many participants is that turmoil presents new problems when existing ones remain unresolved, as Roubini explained. Despite the backdrop, the Fed and its global peers can’t afford to forget their inflation mandates, Pimco’s Frieda said.

“I don’t envy them the task,” he told Bloomberg Television. “We’ve got a two-front war between inflation and financial instability, and the Fed needs to keep its eye on the inflation prize.”

--With assistance from Anna Edwards, Matthew Miller, Flavia Rotondi and Caroline Connan.

This article was provided by Bloomberg News.