buycine: ab inbev agrees to anheuser-busch. jonathan: trade troubles. china imports slumped almost 15% after 11 straight months of decline, the longest losing streak in six years. francine: barclays will be heading back to wall street as it is said to be targeting an extra e morgan banker for the job. -- and next jpmorgan banker for the job. welcome to "the pulse," live from london.

. manus: welcome back. a great job in lima, francine. coming up, we will be joined by a renowned harvard university professor and author, neil ferguson. francine: we will be talking about his new book. the killer question will be what would henry kissinger do if he was focused on china right now. oil, andof china, speaking of oil, breaking news from the iea. from breaking news switzerland -- it is important because it i effect ubs and credit suisse. this was a left finance ministry has just announced it will require the country's biggest banks to have capital equal to about 5% of total assets, after credit suisse and ups sought to win easier terms. this is according to people familiar with the deliberations. the decision would mimic the

u.s. leverage ratio for its biggest banks, which exceeds the 3% minimum set in a global agreement by the barca committee. that is according to the people. the swiss government will also align its calculations of the with the method employed in the united states, and that will result in fewer types of debt counting toward capital, according to one of the people familiar with the situation. a measure of financial strength, the leverage ratio, has been gaining in importance since 2008 as a means of making big banks less prone to collapse. a government appointed expert panel recommended in december that switzerland follow the lead of the united states, which in recent years has introduced some of the worlds toughest capital requirements. i know you just saw the ubs shares, but coming close -- this

is the intraday chart. as soon as the news came out, credit suisse shares fell as much as 3%. they are coming back a little bit, now down just 2.73%, and have a look at ups intraday. they did fall, down as much as 3%, but have come back to a decline of 2.3%. that is the big news coming out of switzerland, no surprise to see ubs and credit suisse shares plummeting. francine: that is very significant because credit suisse is announcing its plan on the 21st. we have reports that they are looking to raise capital and doing mass cost-cutting. if they do that now it may be more difficult to raise capital. ahead for theimes banks and people would argue that it makes them stronger. let's talk about beer -- a record beer industry deal has been secured. ab inbev is set to buy sab miller for 68 billion pounds. francine: the agreement in

principle comes after several offers were rejected over two weeks. caroline hyde has the details. they comes just before the deadline. caroline: it does. the clock was ticking down for ab inbev to bring sab miller to the table, and to compromise -- and compromise they have, over 68 billion pounds. finally they struck a deal -- you will be bringing together budweiser, one in every three beers sold will be by this juggernaut. you'll have to be offering 48 pounds per share, a 50% premium. meanwhile, they extend the deadline. the deadline was looming for tomorrow, and now they are going to extend to october 28 to really start and. the a's and the i's and

cross the t's. regulatory approval is going to be a key issue and this is why we have a massive of $3 billion fee if the regulators block this. if you have one in three beers sold, half of the prophet of the entire beer market, regulators could start to clamp down. this is what we are expecting assets to be sold in china and the u.s.. partial share alternatives -- this is to lou are the biggest shareholders of sab miller. colombia's-- santa domingo is a family and they own 15% of the shares. what if they suddenly get all these billions of pounds coming their way, 44 pounds per share -- that is a hefty tax payment.

they are trying to reduce it by paying it in shares -- this seems to be a sweet spot for the shareholders. 41%. meanwhile, the sab miller board says they are prepared to recommend this deal. won't dig into what the regulators could think and what a behemoth this will create. one in three beers sold -- that's half of it. could they be forced to sell joint ventures? could sab miller have to selloff? and in china -- this could be another regulatory issue. but the focus is there and the growth potential is there. just think -- africa, sab miller owns that plot. push intooing to latin america, but as it stands, they don't have much overlap. already, ab inbev is big in brazil, argentina, mexico. sab miller is big in peru, ecuador -- they are able to see synergies of not having to sell assets. as for europe, finally carlsberg in heineken will get a run for

their money. a bigger competitor fight them in the u.k. compromise has come and the deal just needs to be signed off by the board and the shareholders. october 28 is the new date. manus: caroline, thank you very much. let's bring in the royal asset management chief investment officer's. great to have you with us. we have had pieces of breaking news from the bank, so let's start there. credit suisse and ubs -- another challenge. the leverage ratio at 5%. that is above the global minimum, but what is your first take? >> the immediate response would be naturally to fall. what's interesting is that as the story breaks, you understand that they will try to move to an even playing field with the u.s. from ubs and credit suisse perspectives, as long as you are on equal terms with u.s. peers, it becomes less of an issue. but clearly they are facing some issues. francine: we understand that the

5% -- it is still within the expectations, and it brings it to the same levels but if we look at their leverage ratios now, credit suisse and ubs are 2.7%. that will be painful to get to 5%. do what youagree, are trying to argue is an equal playing field with your competitors. there is a short-term response but that is more strategic. manus: does this change the business question mark the dividend story? does it potentially change how they act? i was just about to say -- credit suisse, there was speculation over the weekend. the argument is that ubs has done the head of credit suisse. piers: no, ubs has been a year to a year and a half ahead and strategic thinking. he is a great manager and it will be interesting to see what

he comes out with her credit suisse -- it will be part of a capital raising. this is obviously another equation to throw into the mix as they decide on strategy moving forward. from our perspective, what we are trying to see is an even playing field, particularly from the bank perspective. francine: this seems like longer-term. it will be a level playing field , but would you be buying any european banks at the moment? we are seeing a lot of changes at the top -- we are still trying to figure out who is going to come on top as a winner. piers: thanks are an interesting challenge, because if you are going to say that these starts will -- that these will start to just carry and it earned zero out. the challenge you have in europe -- givingnking themselves out of the system in terms of poor loans. i'm not entirely convinced that

the history and legacy have really worked up peripheral banks in europe. broadly speaking, foundations have been established and better practices have been taking place. the challenge is that there aren't that many people shouting out for demand. mainly that is because bond markets are very attractive to major corporate's in terms of issuing low yield. manus: talk to me about barclays. our lead story is that they could potentially be talking to back to america and back to investment banking. piers: very interesting. as an investor, when you meet management, you are trying to establish whether the strategic parts they have are consistent with economic returns in the future. having gone from on investment divestedodel, you then a lot of your investment banking, got rid of bgi, you reduced your exposure, and then

you are bringing back somebody whose background is investment banking, and who most recently had asset management. it may be an interesting new direction. i do think there is an opportunity set for them to consider. they have some very good capability in that business. bringing somebody in with that kind of focus, the contrast between jenkins and staley is quite dramatic. but he put his colors on the mast over the summer. francine: thank you so much. he stays with us. manus: fresh data out of china shows no sign of let-up in the country's economic slowdown, with imports falling 17.7% in september. francine: it is the 11th straight month of decline. let's go to our chief asia economic correspondent -- what is going on? saying, wemanus was

don't have any turnaround in the china story just yet -- another negative one for imports is impacted by pricing, which has fallen, it brings it down. we are also pointing to a picture of weak demand in china, a slowdown in manufacturing. on the export side, the decline was less than anticipated. there were some positive signals in terms of shipments to the u.s.. but the overall story i think remains over an economy that has yet to really gain traction or turn a corner. there are reports that china is accelerating their stockpiling. to what end is that playing into this, briefly? enda: yes, well, buying on the cheap will always be a strategy of huge importers. one of the problems in china is excess capacity. it is a problem in china, and that means they expert deflation

in sectors like steel and electronics. as long as they have a big inventory and big overhang, prices will fall, and that has yet to work its way through the system. enda, thank you very much for wrapping up the data for china. the london summit is taking place this week, aimed at finding innovative solutions to global problems. one of the topics there is the refugee crisis. anna edwards is at the summit in central london. anna? anna: thanks. i'm pleased to say that i'm joined by mike milken, the chairman of the milken institute, bringing together the great in the good of finance, public policy, wrestling with difficult issues, including migration. we wrestled with this topic last night.

-- >> if we go back in history and look at 50 million people from europe, traveling, it built the united states. in china, they are attending to have their business create more jobs and opportunity in western china so they don't have the same migration to the east coast. the question is, can we help create some businesses? there are a lot of talented people from syria who are unfortunately in refugee camps in jordan, lebanon, turkey today. could we create some micro-businesses there, that would give people opportunities? but that requires cooperation from jordan, lebanon, in turkey. anna: another topic that got quite a lot of airtime was the role of trade in trying to improve the lives of people who live in north africa and the middle east, helping the syrians in the near future, certainly

trying to open up trade to north africa and the middle east. using that as a way to prove people's living standards. >> i think that is true. one of the curses of a natural resource society, where you based the society unnatural recourses, it doesn't create a lot of jobs. that isodern technology available to us today, there are a lot of things that could be done in north africa, the middle east, south saharan africa. if you ask yourself why are they coming, on one hand they are coming for safety and opportunity. , manyd they leave europe came for religious freedom to the united states. this is what we would refer to as social capital -- a large area of the milken institute's focus. it is rule of law, property rights, universal suffrage,

universal education, religious freedom. all those things are alive and well in europe, and europe underestimates how important -- and the social safety nets that support people. you can also ask why did so many people of wealth and success want entrepreneurs from china? the exact same reasons. it is the social capital that exists in europe that attracts people from around the world. anna: so it helps to look at this problem or this opportunity with a long lens, then. maybe it helps to look at the rise of the middle class in africa and parts of the emerging world through that long lens of history, an area of opportunity you focused on. there are many people from africa here today. >> that is correct. but the rise of the middle-class is one of two or three things that is substantially changing the world.

let's talk about the largest middle class, china. a large movement in the middle class in brazil. when you move people to the middle class, they have enough money to live, house their families, feed their family. now they start moving out and picking about other things -- what about the air i breathe? what about the environment? what about safety? can i count on the products i'm using? anna: they demand more from their regulators and government. >> yes. so these are many of the challenges in brazil today. the milken institute and others have predicted that brazil will become the world's fourth-largest economy. but the stock market is down 75% in u.s. dollars. if you are going to be the fourth-largest economy you need a strong government, you have to have faith in your institution, particularly her largest company. so the rise of the middle class can destabilize the society if

it's needs are not met. i think what you are seeing, 10 or 20 years ago, the world was talking about the environment in china. today, the world doesn't have to talk about the environment in china. the chinese national people are fully aware and are demanding solutions from their government. anna: when you look around -- we have policy experts, experts in the world of finance -- when you look ahead to what might cause the next destabilization of the growth story globally, do you worry about china and the emerging market growth story? do you worry about commodities? do you worry about a bubble in high-yield debt in the united states, particularly in commodity companies? where are your worries focused? >> well, i am not worried about high-yield debt. debt, it is about really a market of bonds and debt issue, not a market.

some companies will make all-time highs, some all-time lows the same day. in technology has really changed the world, but most of the companies in the world -- 99% -- they create almost all the jobs, and all that are in commodity businesses, it is hard to charge more for your product then a value added if it is a commodity. so they go through various cycles from that standpoint and they should be more financed with equity due to the volatility of the business. anna: thank you very much for joining us, with a wide range of thoughts. mike milken. hear from london, back to you. manus: thank you very much. anna edwards with michael milken. where should we go next? francine: barclays is the big story of the day. we have a huge m&a deal.

the ceo search leads to another american, another former jpmorgan executive. is staley next in line for the job? we will talk about that up next. ♪

francine: welcome back to "the pulse," live on bloomberg. isus: american just staley

said to be the man for the top seat. barclays is close to naming the veteran as the next ceo. let's bring in stephen morris. diamond interesting -- was an american investor and here is mr. jenkins -- we are americans and investment banking. stephen: it looks like barclays will take the gamble that he is the one to sort out their investment bank after antony jenkins failed to get to grips with it -- obviously a very different person, a different background for barclays being run by the investment bank. francine: do we think he is the right guy for the job? it's is a catch 22 -- if they don't have an investor banker, they don't understand business. if you do, it will be tough to cut down on the bank. stephen: it remains to be seen what kind of role he is brought in to do. he will chop the investment bank down to size, or has he be brought into champion the unit

and turn it around to make it a big player again? suisse is chasing after well. what is going on? piers: one thing we need to step back from that has been quite a change philosophical he up barclays -- if you had a recent contact with them specifically as consumers, the face has changed radically, and we have done a lot of social engagement with them after we worked closely with management. jenkins has done a lot of that good work. understanding your customers better -- that is the natural thing you do as a bank. but the second thing is mcfarlane looked at that, the world heading in the right direction, but we still have a strategic challenge. that is a better return on equity, which is on the floor. piers: it depends on how you

choose to measure it. i think they can generate a reasonable alternative and they have done, traditionally quite well. it is a question of where you choose to play the game. haveine: the fact that we a single supe supervisor -- the challenges that we move responsibility for regulation would we made an independent -- francine: in europe. piers: right. but the challenge coming back here, the pra, everyone wants to set an agenda and be crystal about improving banking practice and moving back to traditional methodology of the bank of england, focused on capital, your control of capital, as opposed to the fsa which was a bit more laissez-faire and open to how you manage the different parts of your balance sheet. the common regulatory stance really sets an interesting

challenge, but i think this has nothing to do with the regulators -- this is the management team saying we need to focus, have leadership back. -- if weecision reinvest in that business and try and generate return or we decide that we have an investment banker who can take it down to a more manageable size, and still generate economic return? until you sit down, it is difficult to speculate. all i would simply observe is that they have taken down this -- they have been focused on better performance, and it is starting to come through in the numbers. we have moved from a position where they didn't choose to own, to a position where after engagement with the company and the belief in the culture, that there is a significant change taking place. francine: think you so much. piers morris. break, we havee

a very well-known economist in the house. we will be talking to neil ferguson, and of course, vw. ♪

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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. mark: u.k. inflation terminal across the bloomberg terminal any gnome and out -- 0% is the that theeaning inflation rate is well below the bank of england's target -- cpi -- -.1% inflation. we have deflation on consumer prices -- we had deflation on consumer prices in april, down by .1%. well below the bank of england's sayst of 2%, but the bank we are expecting inflation to stay around zero in the near term and below zero until

spring, 2016. bloomberg intelligence says cpi will accelerate quite quickly in the months ahead as the direct effects of the falling oil price will begin to drop out of the annual cpi comparison. mark carney has said himself that it will become clear at the beginning of 2016. minutes of that meeting signaled that they were going to borrow more for longer as slow inflation process, markets pricing in the first rate hike at the end of next year. economists are saying sometime in the second quarter. i want to move away to some of the other big stories, the one coming from china, import prices an 11g 20.1%, falling for straight month, extending the longest losing streak in six years. commodity producing countries are being hit today, china is the biggest trading partner of australia, and the aussie dollar

was rising for nine consecutive days and falling for the first day and 10. -- in 10. crude oil has the biggest drop in six weeks, after opec says that production rose to the highest levels in 2012. china's crude purchases are rebounding in september from a three-month low. this is the two-day chart, falling 5% yesterday, then rising by 1%, then the big corporate story of the day -- sab miller. if you don't succeed, try again. after four rejections, ab inbev has agreed a price to take over as a.b. miller, 69 billion. that is a 50% premium to the closing price on september 4, the day before speculation of the deal surfaced. a busy morning. francine: here are bloomberg's other top headlines. ab inbev has agreed to buy sab

miller for 60 billion pounds. it cap's more than two weeks of back-and-forth negotiations over the price. the record deal gives budweiser control over half the drinks in the industry. once they merge, one out of three beers sold will belong to them. to have capital equal to 5% of social assets, according to people briefed on the deliberation. shares in swiss banks are lower this morning, ubs down over 2.25%. francine: china shows no sign of a let-up in their economic slowdown with imports falling 17.7%. it is an 11 straight month of decline, the longest streak in six years. exports fell that were above expectations. manus: barclays is set to be close to naming jeff staley as the new ceo. he spent 34 years at jpmorgan before joining hedge funds firms. telling is

regulators that he is the front runner. if approved, the appointment should be announced within two weeks. back to america for leadership, eh? francine: second one from 80 morgan. -- from jpmorgan. neil ferguson has just written a biography on the life of henry kissinger. great to have you on the program -- think you for coming in. when you look around the world, -- you talk about china and interest rates and negotiation. the fact that we don't have a statesman, a political person, who is a beast at getting stuff done, who would you say is the number one guy? jingping was to talk to a western statesman, he turns to henry kissinger, 92 years old, still number one guy in the eyes the chinese leaders. that tells you something. it tells you that he has amazing staying power, and it also tells

you that they haven't really found a replacement for him. one of the arguments i have been making recently is that there is an american strategy, if you put it in historical perspective. on henry kissinger's watch, you would never have allowed the russians to become the powerbrokers in the middle east. he would never have allowed the russians and the chinese to get closer together to one another. i think there are some big strategic mistakes being made right now, and the full consequences of those mistakes i think will only become clear over the next two or three years, after president obama has left office. his successor, whoever that may be, will be dealing with a huge mess in the middle east. you ain't seen nothing yet. if you go back to 2010, 2011, you can see the fourfold increase in fatalities and armed activity. most of that is concentrated from north africa to afghanistan, essentially the

muslim world is on fire. francine: right, but we seem to take little notice of it. the imf and world bank meetings -- i kept on saying, how much to model it? they say -- we can't for c shocks of a political nature, so we ignore them until something huge happens. niall: like the early 1970's. you have this big increase in conflict in the region, but it hasn't impacted or supplied. that is because most of the action and violence is happening away from oil infrastructure, or in parts of iraq that are needed, but that could change quite suddenly. one of the things people need to watch is market and the possibility that other states in the region could become unstable. the question that hovers over the world oil market is the stability of the assad regime. if you follow that, you start to get nervous, because a lot of countryis going on in that

and their gamble that oil prices will increase the leverage could go horribly wrong. there are question marks over the king's health. they haven't impacted commodity prices and traders haven't noticed. manus: there are economic and political consequences of the crisis you just outlined, not least in the middle east but also the european response. to name one individual who encapsulates some of those views -- donald trump. i don't agree with him but he says america's response -- what merkel is doing for germany he says is insane. but europe's response, some would say, has been inadequate, flawed, and disparate. niall: i am reluctant to agree with anything donald trump says. [laughter] niall: he belongs in the entertainment section. [laughter] niall: let me sidestep the trunk quote and go straight to the

heart of the matter. europe is paying a price for its strategic weakness, essentially after a rather half-baked incident in libya. europeans have sat back and hoped that everything would sort of health out. it hasn't. conflicts escalated, millions have been driven from their homes in syria. thelly, after a leg, effects are being felt in europe. one thing you can criticize merkel for is the fact that she acted on the issue of immigration and asylum seekers with that much reference to other european leaders. she hasn't really sought to get insight from other european leaders. ares: when you believe you in charge totally, you act as if you are. niall: she is in charge totally. that is what the eurozone crisis revealed. ultimately, all bets hinged on what she decided. but now we have a completely different issue, one more serious tip.

i think we have a major crisis of governance in europe, quite apart from the sheer scale of the refugee flow. manus: niall ferguson will stay with us. we will move the agenda onto data, we just had from germany. inflation remains unchanged. new comfort to the european central bank executive, fighting the inflation stagnation. francine: let's get more on germany with hans nichols in berlin. hans, how significant is this for germany? hans: well, when you look at the numbers we had this morning, we had to data dumps. cpi came in as confirmed -- -0.2% -- but those chinese import numbers could weigh heavily on the german economy. that is why they are interested to see what we get in this study survey in about 25 minutes. the last couple months -- it has been a good

indicator of the slowdown. he expectation is for 6%. back in april, may, we were move north of 60%. we haven't seen a similar decline on their expectations, but something quirky is going on in the german economy, and we will see whether or not it is reflected in his next batch of data. hans, what is the latest on vw? we know you are on top of this story. what is the latest daily drip? hans: i know you want to get to the hollywood optioning of the movie, the let's get to the heart -- it was downgraded -- [laughter] hans: their debt was downgraded. it is more about their company culture. here's what they said -- "vw has demonstrated material deficiencies in its management and government and general risk management." let's go back to china and look

at the numbers on auto sales. here's where i'm confused -- 17%,imports are way down, but you look at the luxury sector -- mercedes september numbers are up 53%, bmw of 12%, even audi was up 2.9%. at least on the luxury sector, the month of september in the auto sector, kid has fared well. a correspondent from "the new york times" is writing a book. he optioned the story. leonardo dicaprio's company. you know what role you will play, manus. manus: i think it will be like "the manchurian candidate." [laughter] francine: i love the fact that because hollywood has an option now it is a real story. hans, i was fascinated by what hasl was saying, that she

taken refugees on board and it is a problem of governance in europe. how is it playing out in berlin? hans: what merkel's response to that would be -- and she has addressed this obliquely a couple times -- is that they don't have much room to maneuver, because the eu laws and all the governing conventions are very clear that you need to allow refugees to come in. internally, it is article 16. that sheis saying is is merely enforcing rules that have already been agreed to by the eu. is there criticism of her to be wrought? has she brought counterparts on a little bit more on how to implement them? perhaps. but i think her line is that we are following the rules and this is what is required of us by our treaty obligations, human rights treaties at the u.n. level and eu wide treaties. francine: hans nichols in berlin. niall, she is right to do it. niall: the interesting thing

here is that they are rules until you suspend the rules. some of them get suspended in a crisis and following rules and a germanic way without any attempt to get info with other european leaders, i think it's politically unrealistic. i was talking to the former polish foreign minister about this the other night. been somebody who has rather pro-german at some of his utterances and has called for more german leadership. he was furious about the way it was handled because there had been any attempt to build a consensus in response to this crisis -- --ncine: for the reason germany can also absorb this. their population -- if you are the first person, and this humanitarian crisis, i want to do my bit as the richest

country in europe at the moment, i applaud that. niall: this is absolutely noble and admirable, but we have to remember that the numbers are huge. somebody said to me in berlin that they know what to do about the first million, it is the second million they are worried about. if you look at unemployment rates in europe, continental european unemployment rates have fallen -- going to bustdy that limit and the problem i would emphasize is if you need data on affordable unemployment, the unemployment rates of foreign-born workers, in sweden, a country taking relatively more than almost anybody to its own population, it is almost two and a half times higher. the problem that is european countries have is that while they are doing a noble thing, they have been failing for years to integrate immigrants into the labor market. that is going to come back to honda. francine: we need to talk about brexit. guymanus: let's touch on that

before we finish. cameron and merkel are going to be the arbiters in this debate. where are we in the brexit debate? and are we starting the campaign to stay in europe? what this camera need to achieve? niall: two things that are interesting -- one is that the crisis in europe, i think, helped david cameron. it makes it clear that things have to be fixed. were harder to say if you a status quo european leader that there is nothing wrong with europe and we don't need to change. is morer thing, which awkward, the total breakdown of opposition inside the house of commons, the chaos of the corbyn era, is getting in the eurosceptics and making the arguments for euro exit larger than they should be. i don't think it is credible to say britain should leave the eu. i think it is pretty silly. we will have a referendum that is necessary politically but i

think it will end, a conclusive when. -- win. but we will have a long, protracted argument. opinion polls will say its neck and neck because everything is that connect. -- because everything is neck. just keeping their own parties in line -- francine: i think you're probably right. niall ferguson. manus: after the break, niall stays with us. we will talk a little bit more about the federal reserve -- do we have qe? that is on the questions that came up. stay with us for a little bit more. ♪

francine: welcome back to "the pulse," live from london. we are back with renowned harvard university history professor and author, niall ferguson. thank you for sticking around. we went around the world in 10 minutes, has you do on bloomberg. you have this great book out on harry kissinger -- what is the one thing that surprised you the most, that you think about a lot when you think about henry kissinger all: it may not seem obvious in his political career, as he

is trying to focus on geopolitics, but there is something he said when he was the young academic which i think applies to monetary policy as well as it applies to geopolitics. he was talking about strategic decision-making. he talks about the problem of conjecture. he says you can take a decision on the basis of your knowledge and intuition, or you can wait. you can wait for the data to come in. you can kick the can down the road. kissinger said the waiting game can lead to policy paralysis. the more i watched janet yellen at the fed, the fomc, trying to decide whether or not to raise rates, the more i hear data dependent and listed excuses, the more i am reminded of his problem of conjecture. that is not to say that i think the fed should be raising rights -- i am slightly inclined to the larry summers you. but what i think is dangerous is permanent decision. there is an atmosphere of uncertainty around what the fed is going to do. we no longer have a clear feeling.

all we are told -- it's injure says that is the worst kind of policy, because it is the absence of a strategy. manus: credibility begins -- many people are saying that the fed missed their opportunity. where do you believe they will raise rates this year? it is about credit -- the credibility of forward guidance. what do you think he would make of the credibility gap that now exists between markets and forward guidance from the central banks? niall: i think central bankers can learn from the world of geopolitics. credibility is a huge part of kissinger's theoretical framework. -- can use u.s. credibility the fed is in danger of losing credibility, since it is essentially diverging from market expectations. if the fed clearly had a strategy that we all understood. the problem is that the strategy faded. started to say that

everything was data dependent, the less clear that was for the framework. the yellen fed could really get stuck on that -- let's face it. october is a dangerous month in financial history. we have had a pretty nasty august and september. you can't blame her. uncertaintye is about what the fed's framework is, and when people start talking about qe, implying that you could do more qe and have an thatt, it gives us a sense this is a central bank in search of a theory, in search of a framework. i think we are in a dangerous place with the most important monetary institution in the world waiting for more data before it makes up its mind. also you had access to private papers and documents from archives -- do you remember one piece that struck with you, that you were not expecting? i plowed through tens of

thousands of pages of kissinger's private papers, one document was something he wrote after witnessing the liberation of a concentration camp. one has to remember that kissinger's life began in germany in 1923. he left germany in 1938 as a refugee from not see as him. he returned a few years later as an american g.i. witnessing the liberation of a concentration camp in 1945 was one of the searing experiences that really shaped his future career. francine: thank you so much for coming on. pick up that book -- it looks great. niall: it is great -- that is why i'm here. [laughter] manus: let's switch our attention to switzerland. the swiss finance ministry is going to require the country's biggest banks to put aside for capital. , 5% of total assets. let's get to jeffrey fogel. jeff, what do we make?

is this in line, does it create a level playing field, worse than expected? jeff: i think it is around what was expected. it is still, though, rather hard for the banks at 5%. to compare, this is the same level that the u.s. global systems are at. but the swiss banks have kept saying that for them this will be much harsher to fulfill because of the different market structures in europe and in the u.s., and because their balance sheets, worth they keep their mortgages and much of the loans, are larger, but no more risky than those in the u.s. a tough not to crack for them. eff, the banks were against it, but it is just putting them in line. it is just putting them in line with where the u.s. banks are. why were they so against it?

said well, the swiss have in the report that the government endorsed this february that they want to be among the strictest in the world. clearly, they have a big motivation to do so. remember, seven years this month that they bailed out ubs. the two banks combined are almost three times swiss gdp in assets. so while the u.s. banks are still bigger, the swiss ones represent a much bigger risk to their local economy, and that is why the swiss wanted to get up there with their competing country. francine: thank you so much. jeff from zurich. manus: niall ferguson is still with us. one topic we didn't manage to get to was china's devalued currency. landing, softhard

landing -- the reality of where we are. chinaback to kissinger, hit upon spot and -- how do you think this'll play? niall: the strategy that can't -- he many westerners spends time with xi jingping, having one-on-one meetings with him. i think the chinese leadership is at a crossroads. they no longer are as focused as they previously were on economic growth. they have been pursuing other objectives, not the least of which is a geopolitical one, to expand china's reach with the one built, one road. wholel exports and a bunch of countries across central asia into africa, even as far as latin america. there was a big tension between that geopolitical goal in the old growth goal of 7%. that tension finally

produced a small but nevertheless significant devaluation. kissinger has made it clear that the chinese are concerned about their own strategy, and about american strategy. francine: thank you so much. eillance" is a next. ♪

>> britain signals deflation for the first time -- second time -- janet yellen confronts lower for longer forever. sab miller is being bought and the u.s. banker may take the top job. good morning, this is bloomberg surveillance, live from london. i'm here with tom keene.