francine: robinhood raises over $1es. its chief executive says it is to protect its financial position. the eu on the move with coronavirus vaccines, demanding astrazeneca honor its contact. and lockdowns as a new chief executive because cost during her first year, leaving the retailer. we will speak to the company's cfo. good morning, everyone. welcome to "bloomberg surveillance."

yes, it is friday, a pretty heavy day on the markets, most of us glued to our screens well into the night. this is what markets are doing today, the focus firmly on what is happening between hedge funds and these retail investors, robinhood in the mix, i made certain criticism from u.s. lawmakers. the other thing i am looking at is silver. extremely interesting, because we saw exactly what we could have seen a couple of weeks ago when it comes to stock games. silver sing an unprecedented game after day traders contact the metal as the short squeeze market. we look at the vaccines rollout and a little bit of pressure. now, another day on wall street with reddit retail investors taking on massive short positions from hedge funds. take a look at the actor our trade in gamestop -- after hours trade in gamestop, amc, and blackberry.

things got dramatic on things like robinhood, and interactive brokers restricted trading. traders, now as a matter of principle, say they are holding onto their positions. robinhood is drawing on its bank reddit lines to make sure it has cash on hand to clear trades. joining to discuss all of this is dani burger. danny, it sounds like something out of a movie. dani: francine, it all had to do with the risk that was built up in the plumbing, and this is kind of this thing we normally do not pay attention to, because it happens seamlessly, but essentially, the function requires a lot of cash that robinhood did not have. when the traders made, basically two days until that trades settled, and in the meantime, the party that clears that trade and access the go-between, in this case robinhood, needs to put up collateral into that trade settles.

typically this is easy to do, but with the volume and volatility in these stocks, they were all of a sudden required to put up more money before these trades settled. it puts the amount at about $5 billion, at least, and if you are in robinhood's shoes, all of a sudden, you have to come up with billions of dollars overnight, and you know that your users are going to continue to make this trade as well, so the amount of money you have to hold is only going to increase. that is where we get this situation where robinhood starts to pull down on its credit line. we know they are looking at a $1 billion investment from an already existing investor to better capitalize themselves to deal with this bid. at the time of yesterday, they were not able to, and that is why they banned trading. if you look at schwab or td ameritrade, they are better set up, but they still had to put up collateral, so they

raised the margins are trading to take risk out as well. at the end of the day, everybody is risk models were absolutely ringing off the alarm. francine: dani, we are getting breaking news, gamestop freezing 143% -- raising 143% in premarket. will there be any permanent damage from this? dani: well, it looks like the reddit rally itself has not stopped, but long-term, a lot of these users are furious at robinhood. robinhood did take a while to come out with really a clear statement over what was happening, and because of that, you have conspiracy theories floating around, people asking, oh, did a hedge fund make them stop doing these trades? which would be highly illegal and therefore we have to imagine very unlikely. look, robinhood has been rumored to want to ipo this year.

those prospects may be seriously damaged now with user saying they are going to abandon the app en masse. derivatives traders are more fearful on the derivatives market because of this, that things might happen like raising margin requirements, because regulators are fearful of the risk in them that they perhaps did not see before, so that is another angle to this. we might see the derivatives market really be altered from this as well,ranc francine: thank you so much, dani burger, with the very latest on gamestop. i lose my voice on these news stories, because i am looking at numbers, dani, and we are all trying to make sense of it. my next guest heads up the operator which is active in life and life insurance. the company recently put forward a restructuring plan as it deals with political uncertainty and of course a global health crisis.

joining us today is philippe donnet, chief executive of generali. i want to talk about your restructuring plans for the future. every day last week, we talked about nothing else, this fight between hedge funds and retail investors. do you worry about the stability of the markets? does it reach her world, or is it something that is very separate? dr. donnet: no, i think it is very separate. as you know, we are a company with a strong european populace, and we are looking at investments with very long-term. our investments, as you know, are driven by volatility us, so we are protected, i would say, by long-term use come on the world and in the economy. francine: talk to me about some

of the changes you have put in place this week. this is in order to accelerate the delivery of your plans. what will change, exactly, and how do you feel better, given the changes? philippe: our plan was very ambitious before the covid-19 crisis. this fight before the crisis will confirm our strategy, and we confirm all of our financial targets. but we needed to accelerate our plan to secure the delivering of our targets. we chose the right time to change a little bit our organization, to make our process faster and simpler and to be even more focused on the

priorities, as they have been redefined by the emergency of the covid-19 crisis. i say we need to accelerate on the investment management together with the liabilities, and this is a very limited part of our organization, because we are creating a position of the group's insurance and investments officer, because, in our business, you cannot look at the investment without looking at the same time at the liabilities. then we want to accelerate the growth of our asset management, because you cannot be a strong life insurance player without being a strong asset manager. and then we want to further accelerate the digital transformation, which has to be part of our strategy, of our

operating processes, of our interaction with customers and distributors. so these are the principles for this new organization. francine: mr. donnet, some of this acceleration, is it because of the trends because the pandemic has accelerated them significantly? when you look at the asset management, concerns about possible doubles and also given the challenges for digital, how will the pandemic change the way that insurance companies offer it? philippe: well, once again, the pandemic has had financial consequences. for example, probably the most relevant for any insurance company is the impact on the interest rates. the interest rates were already low before the pandemic, but they are now lower, and they will be lower for a longer

period of time. most life insurance companies, like we are, need to adapt itself to this new environment. we started this move a long time ago already. we were the first mover to adapt our company to the low interest rate, but we have now to do more. we know that interest rates will be low for a very long period of time, so it is very important to really look together investments and liabilities. and then of course the pandemic has also accelerated, i would say, the digital world, because people have to be able to work from home. currently, 90% of our employees are working from home, but our agents needed to get themselves to digitalized the direction with their customers, because

customers had to stay home. so the new interaction will be fully digital, which does not mean that it will be fully direct. it is the opposite. the crisis, the pandemic, the lockdown has legitimated what we have said, physical presence and physical distribution. francine: mr. donnet, one of the things i imagine life insurance companies will have to decide is whether you penalize customers that refused to take the vaccine. what is your thought on that? is it something you are looking at? are you keeping with other companies to figure out the best way? dr. donnet: no. we don't impose the vaccine to our customers. i think it is a personal choice. personally, as soon as possible, i will get vaccinated, but it will be a personal choice, and i

do not think an insurance company should interfere into this personal choice. francine: are you planning any big deals for generali? are you planning for anything to become even bigger, make sure you have the critical mass to deal with whatever is coming your way? dr. donnet: well, -- philippe: look, in 2008, we were not in a great position because of the crisis, and it took us almost 10 years to recover from the 2008 crisis. this time, it is completely different. we entered this crisis in a strong position. our ratio is above 200% in the middle of the crisis, so we exit this crisis even stronger, because many other smaller and medium players will be under pressure. so it will create new

opportunities for us. we still have 2.5 billion euros of cash to allocate to acquisitions. we are looking at many opportunities. as i said, we have more opportunities than before. i hope we will be in a situation to make one, but we will remain very disciplined strategically and financially. francine: mr. donnet, is there anything in particular you would be interested in buying, a part of the world that seems attractive now, or is it a type of business? philippe: we are very much focused at the moment on europe and in insurance companies. we are looking at some interesting opportunities, i would say, in europe, and countries where we are already very close to europe, and we are

looking at property casualty companies, talking about the asset management. we are pursuing the construction of that platform as well. francine: mr. donnet, thank you for joining us, philippe donnet, chief executive of generali. coming up, robinhood decides to clamp trading of shares. we hear from the chief executive, vlad tenev.that is coming up shortly, and this is bloomberg. ♪ rg. ♪

>> and he has made it his job, as president, to finally bring the country together. francine: economics, finance, politics. this is "bloomberg surveillance." i am francine lacqua here in london.

now, gamestop is up some 143%, that was a very short while ago, now gaining 92%. that is of course on the back of a couple of tumultuous days we had on gamestop, and this is actually some of the trades started resuming. gamestop originally rising 143% in premarket trading, now gaining some 92%. robinhood is defending its decision to clampdown on trading and shares. chief executive vlad tenev told bloomberg no market participants force the company to make a move. vlad: so there's a lot of misinformation out there, in particular, there's people saying that we were forced to do this by market makers, to reroute to other market participants, and i just wanted to come out and say that that is categorically false. we were not directed by a market maker or any other market participant. this was a technical and

operational decision that we made, because robinhood, as a brokerage, has financial requirements, including clearinghouse deposits, that we have to make to various clearinghouses. some of these requirements fluctuate on volatility in the markets, and in this current unprecedented environment, can be substantial. so to protect the firm and to protect our customers, we temporarily disabled buying in these securities. and we hope to reenable buying as soon tomorrow morning. emily: so, that said, did any other investors or market makers ask you to halt market trades, even if that is not the reason why you did it? vlad: now. emily: -- vlad: no. emily: talk to us a little bit then why you would allow users to sell but not by, if you are

not democratizing finance? vlad: well, users not allowing to sell is very painful -- would be very painful to customers, you know, getting out of the position, getting out of a position that you are holding and not being able to do that is painful, and we stand with our customers. we want to give them the ability and the platform to invest in stocks, buy and sell, so restricting buying, obviously, not as painful to customers as restricting trading in a symbol. emily: so, a question from a viewer here, vlad, if hedge funds can sort 40% of a stock but retail cannot go along because of volatility in the market, how does that make

sense? vlad: well, look, it is not negotiable for us to comply with our requirements and clearinghouse. robinhood always has and will continue to stand with individual investors, their ability to have access to the buying and selling stocks, and i have got to say now, you know, i can kind of understand how clorox and lysol were feeling at the beginning of the dynamic, when there was so much demand for something. we are doing what we can. we hope to have them enable tomorrow morning, and the team has been working incredibly hard day in and day out, even before this, so that we are available to our customers, and we operate and run a reliable service for them. emily: you are now facing scrutiny from both sides of the aisle. aoc tweeted earlier, "this is unacceptable. we need to know more about

robinhood's decisions, purchasing stocks while hedge funds are freely able to trade as they see fit. ted cruz retweeted that and said, "absolutely agree." will you go to washington and testify? vlad: we are glad that both sides of the aisle are coming together here, obviously under difficult circumstances that have been challenging. we are always open to having a conversation we think there are great opportunities to educate the public as well about how some of the mechanics around settlement in the financial markets work. i think there has been a lot of misinformation out there about why robinhood did this, and we first and foremost dated to protect the firm and our customers. francine: that was robinhood chief executive vlad tenev.

coming up on "surveillance," we speak with mark carney on climate action. do not miss that interview shortly after 11:30 a.m. london time, and this is bloomberg.

>> this looks like pockets of frothiness, some rational, undoubtedly, some not. >> there is a risk profile developing here. >> it is what is expected. >> for the regulatory citizen,

the oversize businesses lagging behind. that will create volatility. >> that is why we need more central bank to be there. >> are there systemic risks? i don't think there are. >> we don't have to worry about bubbles and asset markets, per se. >> overall de-risking, i think it is a bigger problem for the market. francine: some of what we have heard from our guests on market action this week. i am looking forward to our exclusive conversation with the governor of ireland's central bank. we will also look at some of the market movements, and the course we will talk gamestop a little bit later. this is bloomberg. ♪ rg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in

london. let's get to bloomberg first word news with leigh-ann gerrans. leigh-ann: the european union is demanding astrazeneca fulfill its contractual obligations on delivering covid vaccine doses. a shortage across the continent is forcing countries to slow down vaccinations. commission president ursula von der leyen says a deal with astra will be made public. it started when deliveries were cut due to a production glitch, prioritizing doses in the u.k.. the covid 19 vaccine from novavax was effective in bit trials in the u.k. and south africa, but it's protective power was lower in south africa, where a mutant version of the virus is spreading. another vaccine could be available to increase vaccinations around the world. the man who triggered the collapse of italy's government is ready to force a new

coalition to avoid snap elections. matteo renzi did not mention just a piquant a in a meeting with the president. he told reporters his priority is the issues, not who is in the driving seat. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm leigh-ann gerrans. this is bloomberg. francine? francine: less focus on the pandemic response by europe's central bank. yesterday astrazeneca told surveillance that ireland should be able to ease -- the irish friday's minister said he was confident the measures should help drive down the virus. joining is now for conversation is gabriel makhlouf, the governor of the central bank of ireland. have to say central banks have stepped up already in 2020, so i don't know if it is fair to ask

you to do more at this, but how do you see the economy recovering? there are extra lockdowns, vaccine delays in europe. do you have to revise your forecasts? gabriel: good morning, francine. i sum up the economic outlook with cautious optimism and high uncertainty. what we can see in the near term is a weaker outlook. but assuming the vaccination programs are rolled out, we see the second half of the year as much more positive, growth coming back. within ireland itself, our medical, pharmaceutical, and i.t. sectors had a reasonably good year last year, and our gdp was positive last year.

it is a patchy picture because particular sectors have been hit significantly, and unemployment is higher. we see the resurgence of the pandemic and the restrictions across europe, a negative impact near term. francine: there seems to be a concerted action by ecb officials that we could see a rate cut. do you believe the rate cut is coming? what would prompt a rate cut right now? gabriel: well, i don't think a rate cut is coming right now. it is only a week ago since the governing council of the ecb met, and we looked at the evidence, look at the facts, and decide to maintain our position, as the decisions were made back in december.

our toolkit is available to use, and we have not ruled out using any of our options, including a rate cut. when we get together in march, we will make a call. it depends ultimately on what is happening to the outlook. but as i said, right now today, i don't think that is warranted. the near term is going to be weaker, but as i said, it is a "but." we see the second half of the year as better, and we see a better outlook for 2022. but the important thing, probably the key message for today is that now is not the time to roll back neither monetary stimulus or in

particular fiscal stimulus. that is the picture -- the picture we are seeing at the moment is the key message. francine: do you think a strengthening euro for now would actually warrant a rate cut? gabriel: i think the strength of the euro is something we can both put our sites on, but we don't target it. it is something that we pay close attention to. if we come to the conclusion it is going to affect our price stability objective and our overall stance, that is certainly going to be an option that we would consider. as i said, it is only a week since we met and took a particular decision, and i think the decision we made is absolutely the right one. we will keep a close eye on what is happening to the euro. francine: because we talked more about a rate cut now since that decision, that was just a couple

of days ago. you think there was an understanding or worry that the market was mispricing the full toolkit of the ecb? gabriel: i don't think so. i mean, i think -- as i said a few minutes ago, a lot of economic news and economic data right now, and as a result, monetary commentary, is clouded by very high levels of uncertainty. i think we have been very clear on what we are trying to do, what we are trying to achieve, and what is important for us right now. i think the markets at the end of the day do understand that. i hope they understand that our toolkit, our actions over the last year have been, as you said, we have stepped up, and when we have seen evidence that is -- that has required us to make some changes to our policies, we have made them. we have made some changes in

december, we confirmed our position a week ago. if the facts change, you know, then we will look at them again and make a different decision. right now, my colleagues and i are comfortable with the decisions we have made a week ago. francine: governor, when would a financial condition index the most useful, during the crisis were after the crisis? gabriel: i think that sort of index, it would be most useful once everyone understands what it is, what it means, and how it works. so if we were going to have an index like you just described, you would need time, i suspect, for it to be understood by everybody. we were already right in the crisis, so we cannot wield the clock back -- we cannot we'll talk back -- we cannot we'll the

clock back. for us and for the markets, it is important to be extremely vigilant about what the data is telling us. but to also be extremely flexible in the way we apply our toolkit. we need to help ensure that, you know, the markets work, financial conditions are right, and are policy objectives are ultimately delivered. in this particular crisis, while not a financial crisis, it is a health crisis. fiscal policy is critical. as i said earlier, it is really important that fiscal policy and monetary policy right now are not ruled act. -- are not rolled back. francine: do you worry that if we had a financial condition index that actually it would take resident over inflation, or

that investors will look at that more than inflation expectations, and therefore fuzzy the picture? gabriel: there is always the risk of that. and ultimately depends on what it is you design. and also it depends on the clarity of our own forward guidance. so i think we are speculating a bit. at the end of the day, it the ecb's objective is price stability. that is what we mandated and that is what we are focused on, so we would have to make sure that the design of any new instrument or index, as you just described, communicated the messages we wanted to communicate. -- the messages we want them to commit to kate. it is ultimately design. francine: you talk in the past about bitcoin, and you seemed to suggest it is not unlike -- even bitcoin and other financial assets, where are we right now? how should central banks look at

this? gabriel: central banks, and especially central banks in -- need to pay attention to what is happening in the same way they pay attention to what is happening in financial markets generally. as the u.k. authorities said a few weeks ago, you know, if people want to invest in bitcoin, they have got to be prepared to lose all of their money. that is certainly my view. i personally am not sure why people invest in those sorts of assets, but they see them as assets, and they see them as investments. our role is to make sure that consumers are protected, and i see that as the main role. i don't see financial stability issues at the moment arising from bitcoin itself. i worry more about consumers

making the right choices. francine: i was going to ask you about financial stability. is there anything you are seeing in any space, asset class, or what we could be creating where you would worry about financial stability? francine: at the moment -- gabriel: at the moment, the system has paid off and we are seeing the financial system draw down on all that resilience, and i think it has done it pretty well. certainly within ireland we feel -- we have published some forward-looking analysis before christmas. we feel our system is pretty resilient, even -- the key thing now is to rebuild that resilience, not just in ireland but across the euro area and across the world.

one area that does concern me, and it has been an area of focus , is the whole area of market-based finance, non-bank financial mediation. for the crisis, i was very keen to expand the flows that -- and the role that the marketplace finance was playing. the fine -- the crisis back in march was showing vulnerability in the sector, and it persuaded me and many of my colleagues around the world that we need to look carefully at how market-based finance is regulated, and certainly i have been arguing for -- many of my colleagues persuaded that -- that is the one area today that i am probably a bit concerned about. ongoing vigilance across the whole system is necessary. francine: governor, thank you so

much for your time, governor gabriel makhlouf, governor of the central bank of ireland. the e.u. was set to tighten rules about vaccines. we will have more on that shortly, and this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. bitcoin has surged above $35,000 with brokers attributing the move to elon musk, mentioning in its debt by a page on twitter. the largest cryptocurrency spiked about 15% as the trading day got underway. the founder said that coin -- #bitcoin with no further

explanation. there is a lot going on in the markets. we continue looking at gamestop. it was at the beginning of the program that it started treating -- trading, and it is currently 106% higher. the e.u. is set to tighten rules on the covid vaccine policy that -- maria tadeo joins us from brussels. this is an epic fight like we have not seen before, certainly not with vaccines. how would the export ban actually work? maria: yes, francine, and you make a good point. it is unusual to see the european commission, which tries to stay out of this, go after one company and also mention a ceo so publicly, the way the european commission with astrazeneca. they like to call it an export limitation. they don't want it to be called

a band because it makes the e.u. look bad. the word is that if you are a company in europe that is making the covid vaccine, before you send it outcome you ship it out of the european union, you need a certificate of authorization by authorities. but if it does not, the vaccine needs to stay in europe. european officials behind the scenes say this is really about checking what is being made here, and what is leaving the european union. they worry -- and this is not a secret -- that the money that they paid for distribution to make vaccines has gone somewhere else. that if it is not here, it is definite out -- it is definitely not reflected in the deliveries. today we had ursula von der leyen forced to finally go on the record to explain what has gone wrong here. she says the european union is a victim to some companies that are not delivering. and doubling down on that commitment to make public the

astrazeneca contract. she said that we clear the air but that remains to be seen. francine: thank you so much, maria tadeo with the latest on the big spat between astrazeneca and the e.u., with profit controls coming from the e.u. coming up, cost cuts at one of the world's biggest retailers, as h&m reports a 30% drop in cross profits. that is coming up next, and this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua, here in london. h&m has delivered earnings ahead of estimates for the fiscal fourth-quarter. these swedish clothes retailer cut costs, says profits of 32%, smaller drop in analyst expected. the lockdown continues to hit sales. it plans to shut about 250 stores over the course of the year. talking about this and the outlook going forward is adam karlsson, chief financial officer at h&m. let me start with the dividend. when you say there are good

prospects for cash dividends in autumn of 2021, can you elaborate on what would derail the payment of that cash dividend? adam: good morning and thank you for having me. under the current circumstances, they are very uncertain. right now we are in the midst of the second wave of the pandemic, and we need to weigh visibility before we make any judgments, and this is the statement that the board has made in the full-year report. francine: how much are you expecting to actually distribute to shareholders, if it all goes to plan? adam: this is, as i said before, too early to judge. we believe that we left 2020 in a healthy and robust financial position, but we are sort of all

fighting a second wave of the pandemic here. we will await further visibility on how the situation will develop. francine: i know with store closures, it is basically 250 stores left, but that is i think what you said last quarter. is there a feeling that you will have to shut more stores if the pandemic or if the lockdowns exceed what we have at the moment? adam: it is the same indication we gave after third quarter. it is a dynamic target. we both see that the stores play an important role on the customer experience, so the -- it is rather to optimize how we meet the customer. as i mentioned, it is a dynamic target that we continue to evaluate, and given the flexibility that we have on the rent and lease agreements, we are able to be flexible and continuously judge this going forward. francine: mr. karlsson, i

have not been in any shop since march, but my spending has not necessarily gone down. you expect online sales to stay at that level, or rise? adam: we saw very strong online growth, and the positive side of it is that we see when stores are able to open, we could really see that the positive combination of having stores online -- very h to see a very strong online growth during fourth-quarter, when stores -- we see a very strong combination here, but for the time being, online is -- francine: can you give us an indication of what specific targets you have put in place for your first sustainable linked bond? adam: we work with broad

ambition when it comes to esg. but we decided to highlight is a very ambitious material goals that we have. we have the long-term ambition towards -- we have a more short-term target to really increase the levels of the recycled materials, to about 30% in 2025. francine: and on your inventory, it is still quite high according to analysts. you say that it will come down. when can that actually happen? adam: it is all depending on how the pandemic and that situation evolves. we were in a very good trajectory out of 2020, so we believe that we have had mechanisms in place to as soon as possible jump on that trajectory again. so we need to come back with times and dates. but the ambition is near-term and we can go back to more

normalized trading and that of course will have a positive effect on the inventory development. francine: thank you so joining us, adam karlsson, chief financial officer of h&m, giving us his first interview of the day. bloomberg surveillance continues in the next hour. tom keene joins me from new york. i have to say the interview with emily chang was a great one, speaking to the founder of robinhood. we will give you that and talk about this massive fight of wall street versus retail. futures in the u.s. pointing lower a little bit. i'm also looking at silver. this is bloomberg. ♪

francine: robinhood raises over $1 billion to cover trades. its chief executive tells bloomberg it restricted buying of certain stocks to protect its financial positions. the e.u. is set to tighten rules on the export of coronavirus vaccines. ursula von der leyen tells astrazeneca it must honor its contract. and h&m earnings beat expectations amid lockdowns as the new chief executive cuts costs during her first year -- during the pandemic. good morning and welcome to "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. 80% of what we do the next two hours will be focused on robinhood and the underlying issues with the central bank governor of ireland. he says there is nothing to worry about in terms of financial stability, but we are also not sure how this will play out. tom: it is new. a writer from the new york times neil that when he said --