dani: good morning. this is "bloomberg daybreak: europe." u.s. authorities backstop depositors at failed lender svb as well as signature bank after it too is shot. shareholders and some creditors will be wiped out. fed pricing and u.s. futures jump on the stock action. two year yields plunge as traders scale back rate bets. fomc will hold fire at this month's meeting. thus, u.k. prime minister rishi sunak says a plan to contain the svb fallout is in the works, getting support for the u.k. tech industry. another u.s. bank fails over the weekend and the government steps in to backstop depositors and allow easier access to capital for banks.

peter contee from worth didn't says that the fed's lending program is an admission of not only systemic risk but that the risks are so unusual and exited that failure to invoke this liquidity could create a financial crisis. with the government stepping in, the stock trading is underway. you have to remember that silvergate was highly crypto exposed. that relief is being felt through the crypto sector, bitcoin at 4.6%. there did seem to be the expectation there would be a government that comes to the rescue, perhaps another buyer. s&p and nasdaq futures jumping on the announcement from the treasury, from the fed, from the fdic that there would be support. the fed re-think trade is also underway.

goldman does not expect there to be any impact, for there to be a fed hike this next meeting. you have the two year yields which fell an additional 19 basis points in the last half an hour, showing how jittery the market is. two year yields have moved a total of 16 basis points lower and if that move holds, it would be the biggest drop since black monday is a 1985. we are going to get to all angles of the svb fallout. we have our team of reporters. let's get to all of it and start our svb coverage with bloomberg's asia finance editor, russell ward. the u.s. said it would backstop deposits. what are they doing to stem the pain? russell: it has been a hectic weekend for u.s. regulators that

have come up with two main steps. one is to backstop all deposits, not just insured deposits. it is not the minimum guaranteed by the federal regulators. unlimited deposits, so that will be a big relief for startups. the second measure is the fed has come up with an emergency lending program so if any other banks come into similar stress, they are not forced to sell assets and make losses on those with an exit us of deposits. those are the two main steps. they still have plans to exit -- auction off the assets of the bank, that does not seem to have made much progress. the main priority being to guarantee the deposits and reassure markets and reassure the financial system that there will not be anymore bank runs after these.

dani: there are two reactions. the political one, which is careful to say this was not a bailout, and the market reaction, so whether this will success. a bank run. have we seen a reaction to either of the two? russell: we have seen assurance in the broad markets with u.s. stocks and bonds rising. the notion that the fed may slow its pace of rate hikes, but in asia we have seen more jittery nests in the stock market where we have had banks stop falling -- bank stocks falling in tokyo and that has prompted officials in the region to assure people that their financial systems, a main japanese government spokesman saying that they are formally capitalized. the bank of korea is monitoring

the situation, and in the states, the british prime minister is visiting america. he has promised there will be an announcement soon on what the u.k. will do and the u.k. has a bigger start up community there. there has been a unit there and there are plans for supporting the start of community there, so we will have to wait to see what comes out of that. dani: we will have great interviews later with associations tied with u.k. finance. russell ward. despite the move by u.s. regulators to contain the svb crisis, there is a macro impact. goldman sachs no longer expects the fed to hike rates next week. let's bring in valerie tytel. the move at the front end of the curve has been stark and breathtaking. it is the markets now pricing -- what is the market now pricing? valerie: the note out from

goldman had an impact on the market and they are seeing no fed hike in march, but they do keep their fed hikes for later in the year. they quote that with the recent stress in the banking system posing uncertainty for the fed path beyond march, but here is the euro-dollar pricing. we are now back to pricing cuts and they have come swiftly. this chart is the spread between the june contract and the december, so it is a good measure of the pricing of rate hikes in later in the year. we have gone from pricing at all to nearly 40 basis points of cuts. this goes back to how will the fed attempt to message this in their next meeting. people commenting on the fact that the payroll print on friday gives them room along with the combined net of the tightening of financial conditions with this, but let's go over the payroll print.

the measure of wage inflation showed no surprises. unemployment rate ticked up and labor supply is coming back to the market. that combined with the tightening of financial conditions we will see from the fallout of svb might be enough for the fed to pause rates in march or perhaps hike a last 25 basis points and communicate the pause from their. dani: thank you. bloomberg's valerie tytel. russell ward was mentioning the u.k. story and let's get into more detail. the prime minister rishi sunak has unveiled the government's plan after those involved with silicon valley bank have collapsed. lizzy burden has the latest. lizzy: rishi sunak has given us the heads up from his trip in the u.s. meeting joe biden. the issue in the u.k. is even though rishi sunak has said the collapse does not present a risk

for the financial center, most of svb u.k.'s clients are in tech. ahead of the budget this week, chancellor jeremy hunt was aiming to grow the u.k. economy by making britain a science and tech superpower, so he needs to shield those customers. at the moment, the bank of england is protecting customers with deposits up to 85,000 pounds, but many businesses have millions of pounds in their svb account. jeremy hunt has been meeting the bank of england governor this weekend and under pressure to act fast. the shadow chancellor has said that far too much reliance has been placed on foreign investors, and that is what this crisis shows. we are looking for an announcement in the coming hours because the markets open when the tech sector will be at risk. dani: they need a plan in place

before people wake up and try to get to their banks, at least the thinking for u.s. regulators to do it over the weekend. there have also been reports on potential suitors for svb u.k. lizzy: the biggest name in the mix so far as hsbc, according to a report by sky news. other names in the mix, boil group, the investment firm controlled by an abu dhabi royal. there is also the bank of london and oaknorth, founded by a former conservative party donor and advised by the former chancellor, philip hammond. there are other options. the svb u.k. branch could be temporarily nationalized by the bank of england. that would be controversial. or it could be left to go bankrupt, which there are believed to be some pounds that are not protected that are at risk. dani: thank you.

lizzy burden. asia financial stocks outside of china and india have dropped as investors assess whether svb's failure poses not just a u.s. systematic risk but a global one. tech chiefs are checking their exposure to the california headquartered bank. let's get to bloomberg's thomas eiland. we were just talking to lizzie about the u.k., and in asia there are concerns too. how are the vc world and tech sector in general reacting to this? >> i have never seen anything like this. over the weekend, text chiefs scrambled to get this and over 180 had signed it by the end of saturday, and by that afternoon, they were meeting with the treasury, the digital secretary, and other officials. we are hoping to see the outcome of that meeting shortly. rishi sunak said ironically that

he is on a trip to california, where all of this risk comes from. top vc's, top finance associations, and startup chiefs were all in touch with the treasury over the weekend, and the treasury had to talk to them a lot to assess. there were gathering data, is how i would put it. we were trying to work out to what extent deposits were uninsured if they were backed in svb or elsewhere because it seemed to be this concentrated potential of failure which exploded into the public consciousness over the weekend. dani: thank you. that is thomas seale. quickly, adnoc has had its first trading and it is already up. adnoc gas shares jumping 20%. this is its debut in abu dhabi trading. coming up, we will also continue our coverage of the market impact from the svb fallout.

that will include the impact its collapse is having on the world of british venture capital and private equity. that will be later in the show. this is bloomberg. ♪

>> i think they will handle this

in a rational and orderly manner. this will bring confidence back to the markets, but from the fed point of view, there are additional dangers that need to be refused. >> now there is a question. there is never just one cockroach. >> i would imagine right now the fed is scratching the shoulders of every regional bank saying we have got you, go out and issue new capital. >> the bigger indication of this is no longer can we rely on the idea that nominal gdp will make sure that credit markets are fine. >> the svb issue seems for the moment to be resolved, so the market should be somewhat limited. >> their actions will stave off more fears of contagion, which i do not believe was warranted anyway. dani: different opinions and a lot to dig through in a fast-moving picture when it comes to svb's collapse. one of the things that has happened is a change to the

macro picture. i want to read to you what the team over at goldman sachs wrote. they too have changed their opinion of what iti want to reae fed. jan hatzius saying that in light of recent stress in the bank system, we no longer expect the fomc to deliver a rate hike at its march 22 meeting with considerable uncertainty about the path beyond march. theof recent stress market has t rate hikes, but here is what the two year yield has done. the one-month picture is stark because we have the ramp up in yields as there were expectations the fed would be aggressive with the data coming in hot. this event has sent two year yields lower by 6.6 basis points in the three days. the two's and 10's curve also moving significantly. let's get to skylar montgomery koning, senior global macro

strategist at ts lombard. will this stop the fed in its tracks? skylar: the actual event, while it is important for companies and that specific bank, it is more of an idiosyncratic event. it is not systematic, it will not be a contagion risk. the fed and the u.s. generally just put a band-aid on the svb issue. we have seen it in this tightening cycle previously, these band-aids where the fed has done bond buying to protect the periphery, and the u.k. has done some bond buying, so this tightening cycle is normal that we have got these issues that have put band-aids on by the central banks. we have gotten this band-aid now to contain the risk, which means the fed can continue on the path they were previously. i will say that because it is

symptomatic of the fact we are in a tightening cycle, you get these pop-ups of risks and issues, liquidity, and stress taking away from raising rates. that means our view has not changed because the view is that the risks will pop up and that means the bed needs to pause and pivot -- the fed needs deposit and pivot. the tightening cycle is still in sight and that has been our view for the last six months. dani: perhaps this brings light at the end of the tunnel interview. if they can continue this hiking cycle, do they need to back off going at it at 50? does that change the magnitude of hikes they are able to do? skylar: it is interesting because we have rapid repricing higher on the fact we had a good jobs data number number in january and inflation prints that were hotter, and then you have the risk event where the

market repricing has gone down rapidly. it is very much a 25 basis point hike priced in. the fed is looking at incoming data, so we have cpi coming out tomorrow. we have other data points this week, the fed meeting next week, so they will look at the data points and make the assessment. fed and powell specifically have put 50 basis points back on the table, but i do not think this is the right time to do a 50 basis point hike when you have stress going on, so signaling they are still tightening, but still working to tackle inflation. dani: has the market gone too far? there is impact that you believe from 50 to 25, but when you look at the short end of the curve doing what it has done, yields are down nearly another 18 basis points this morning on the front end. would you want to be shorting

this move or pushing back against it? skylar: this is the interesting dynamic in terms of, i think it has gone too far in the short-term, but longer term, my view is dovish. into next year, the fed will be forced to cut. that is because automatically you get this tightening of financial conditions feeding into asset market and feeding into credit conditions as well. that is slowing the economy. as you get unemployment rising in the span of the year and inflation comes down, right now real fed funds are already positive, having a significant tightening impact. if you have inflation come down, even if you do not imagine a hard landing, even if you get this closed off lending, you would expect the fed to catch up with inflation coming down. so right now, yes, take advantage of the near-term pullback in the front end, but

longer term when you get recession and cuts and you see a large rally in the bonds, you would not want to be short on the front end. dani: i keep coming back to this thing that it may be too risky for the fed to make any moves at this point. the idea that powell risks hiking into a global downturn. we also saw valerie tytel talking about this, the wage inflation data being consistent with 2% inflation overall, the participation rate going back up to pre-pandemic levels. can the fed afford to pause at this moment when you take into account everything that has happened over the past three days? skylar: it is interesting because the market takes whatever the current magnitude is and extrapolates into the future. it depends on whether or not they want to signal, are we close to being done?

which it did not seem like they wanted to two weeks ago. the problem is doing nothing and telegraphing this 25 basis point hike. the market and extrapolates that and no further tightening, a loosening of financial conditions, and it undoes the work you have already done. we are at the point in the cycle where we expect a pause and pivot. we are not quite there yet, but that has telegraphed these one or two more 25 basis point hikes. as you say, it gives an opportunity to pause. i am not sure that is necessary right now, nothing but a contagion risk, and i do not think they will want to risk extrapolating into a pause continuing until you get cuts rather than the market would what to move rates even more. dani: another strange move to see what you think. this is having global implications across bonds, including japan.

the two year yield has fallen below .3% for the first time since december. what do you make of that, the fact that svb stepping in means that why cc adjustments do not need to happen? how do you make sense of all of this? skylar: it is broad-based risk off, broad-based moves in markets. it is this one impact point, but it has been overdone, given the fact that the bank of japan, japan in itself are one short within government bonds and asset allocations, and it is more of a statement on the fact that the boj is going against developed market policy we are seeing at the end of this year. we see the rest of the developed markets pausing and some of them already have, so the government bond markets where a are more sensitive to higher interest rates and they have already paused, like canada. we are overweight those markets,

but japan is the only one seeing normalizing policy going against the broad trend. i still like that positioning even though we have this rally on the fact that the svb issue has spread beyond u.s. markets. dani: some strange moves. thank you for keeping us in check. skylar:, senior global macro strategist --skylar montgomery koning, senior global macro strategist at ts lombard. skylar montgomery koning saying that some of the moves are overdone, especially looking at the front end of this curve. this is bloomberg. ♪ over 5 million people have fallen in love with a portable blender. blendjet 2 gives you ice-crushing, big blender power on-the-go. so you can throw in your favorite ingredients and blend up a delicious smoothie anytime, anywhere. blendjet 2 even cleans itself. just add water, a drop of soap,

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dani: bitcoin continues to jump this morning and did over the weekend.

basically everything except usd coin is rallying. there is the hope that the backstop from the government is going to be helping some of these crypto tied banks. signature bank is a major bank in the crypto industry and when it comes to stablecoins, this is a digital asset giant. circle international financial court had been issuing one of this. it caused circle's coin to slip because the news being svb and it banks so heavily with them. some diverging fortunes when it comes to the crypto sector. we will continue to talk about the global reckoning of svb. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need

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dani: good morning. this is "bloomberg daybreak: europe." i am dani burger in london and these are the stories that set your agenda. u.s. authorities backstopped investors -- depositors at svb and signature bank. fed pricing and u.s. stock futures jump on svb action. two year treasury yields plunge as traders scale back rate bets. goldman says that the fomc will hold fire at this month's meeting. less the prime minister of the u.k. suggest an svb fallout plan is in the works. let's get straight to the market reaction from the backstop from the u.s. government as well as the idea that banks will have easier capital to access to short-term capital. you immediately see stock futures jumping when it comes to tech outperforming, even though the tech sector is the most

impacted. bitcoin also rallying this morning. meanwhile, the other trade underway is when it comes to fed policy and two year yields continue to tumble around 16 basis points. we were just talking to skylar montgomery koning of ts lombard who says this move is overdone. long-term, perhaps that will be a more hawkish fed, but this is not a systematic event and it is contained. however, the markets not necessarily betting on that and the two's and 10's with a steepening underway. also the impact of the extra liquidity means a weaker dollar. the impact and concern is global. it is in this country with svb's u.k. unit, small compared to britain's largest banks. but it does play an outsized role in the world of startups, and that has prompted the u.k.

chancellor to warn of the danger of a collapse what that poses to the sector. >> there is a serious risk to some of our most promising companies and technology, life sciences. you will have to wait and hear what the solution is, but that risk is precisely why the prime minister and i have been working at pace over the weekend to make sure we have a solution. these are important companies to the u.k., very important part of our future. dani: we will have the conversation of the morning. it is michael moore, the director general of the private equity and venture capital association. thank you for joining us this morning. i was talking to some vc folks this weekend spending the weekend lobbying you all. what have your conversations looked like and how concerned are people? michael: people are very concerned. the chancellor and prime minister are right to be

thinking about the impact on the economy as a whole, but with this open oven economy, this could be devastating. we are had a survey with the biggest vc firms looking at their companies and about a thousand were covered by the survey. a third of them have banking with svb and 40% of them have been in immediate difficulty, so we are talking about not making payroll, not accessing clinical trials in the life sciences space. life-sciences is harder hit than most of the rest. big decisions required of them and their boards, and that is why the government's action is urgent. dani: what are you expecting? what does the government need to do at this point? michael: with the survey, there are 2.5 billion pounds of deposits locked up in this bank. that is the daily cash flow stuff, helping them function. we need some way of unlocking

those deposits but also getting access to the lower facilities critical to these businesses. there are small lab-based businesses, but also significant ones that are ruling the cyber facilities for countless businesses across the country. for them, they do not generate cash and they are on the path to profitability. but they haven't svb is their lifeblood. dani: what have your policymakers been like? michael: over the weekend, i was part of discussion with the city minister on saturday where he brought together leading figures from the tech world and elsewhere. i am sure the chancellor's comments reinforces that they get there is a problem. the urgency of the response is key. these businesses need the cash and quickly. dani: over the weekend, it was only a few hours ago in the u.s. that we had this announcement, and part of the thinking is the urgency because you do not want

folks waking up on a monday and igniting yet a further bank run and other banks being vulnerable. is there some degree in which this should have already been done that announcing something in the next few hours is already too late? michael: 7:00 is usually the witching hour of the day, but for these guys, they need that. the wider economy matters. we have seen what happens when things get out of hand, but we hope the solution is not simply about that but making sure these companies are part of britain's bids to become a scientific superpower, that they can continue to grow. we have success stories in the u.k., but we do not want them to come to an end with the crisis. dani: this is a moment in this country where we are trying to push for these types of companies, for this type of innovation. are you concerned that will be a rethink in terms of the hazard of the risk of these types of companies if a large part of

this ecosystem has collapsed? michael: let's make a distinction between the two types of risk. the first is about the bank itself and what happened there will have to be questioned and asked about of its position and what happened. however, the businesses that put their cash in the bank are part of a broader, sophisticated tech and vc ecosystem in the u.k., all of which has grown substantially, done brilliantly over the last decade, competing with the u.s. in terms of returns generated. turning the bullish ideas into the universities into tomorrow's great companies. if we are trying to adapt the economy of today, we need the vc ecosystem to thrive. it has been the hope that it will not be the end. dani: if these companies are fundamentally sound, now would seem a great time for private capital direct lenders to step in and direct lines of credit. is there signed they will do so

-- is there a signed they will do so? michael: the government will make it and we hope it will be soon, and from there, private capital will continue to play an important part in this particular issue but also the part of the economy and changes in society. dani: rachel reeves, the shadow chancellor, set over the weekend that this is a wake-up call that the u.k. has been overly reliant on foreign capital for investment. is that a fair characterization? michael: some of that is right in terms of what we raise into our funds comes internationally. this point is about where they put the cash once they have it, so we need to get that resolved. there is a broader debate to be had. we want to unlock the billions of pounds here in the city available to fund the next generation of british businesses. dani: i wonder if the

conversation then changes about british businesses because there is connection to the u.s. and the banking system that folks did not necessarily realize. how big of an alteration is this in the idea of so many of these vc companies? michael: there are a lot of questions being asked about where the cash they bring in from investors and elsewhere, that is right and proper. the fundamentals of u.k. venture capital and private equity, because there are a lot of growth equity firms who also invest with svb and looking for a bank that understands them, perhaps there is a question about the banking system needing to have more players who get vc private equity. dani: have you had many conversations and where the vc companies are going? michael: i have spent a lot of time over this last 48 hours looking for a new patrol, but it

is slightly academic if they can get their cash out of the west vp today or during the course of this week. there will be a broader engagement with the larger banks. i was encouraged that representatives of some of those banks were part of the conversations over the weekend. hopefully we get the right solution. dani: what needs to happen next assuming we get an announcement there are protections for the deposits, may be more lending facilities as well? are there other steps that need to be taken to make sure this does not happen in the future? michael: the short-term point is about confidence, getting access to those deposits and loan facilities and continue to lead the journeys these businesses are on. radley, we need to have a broader conversation about the future of u.k. science and economy and how these businesses are critical to its success. the chancellor has a budget on wednesday and we look forward to

further measures there. dani: i appreciate the here and immediate now is the most important. michael moore, director general of british private equity and venture capital association. let's get to our other top stories this morning. madison mills has the first word news in dubai. madison: thank you the leaders of the u.k., australia, and u.s. will announce a new fleet of nuclear submarines today as they deepen the aukus partnership. president biden, rishi sunak, and australia's anthony albanese will meet in san diego. at partnership was established in 2021 to counter growing chinese naval money in the asia-pacific region. xi jinping has started an unprecedented third term as china's president. he focuses on strengthening

party leadership. in a speech closing out the national people's congress, he vowed to oppose foreign interference in taiwan. that was a failed reference to increasing u.s. government support for the government of taipei. >> we should implement the party's overall policy for resolving the taiwan question, uphold the one china principle, and stick to the 1992 consensus. we should violently oppose the interference of external forces and secessionist activities of taiwan independence. medicine: german airline passengers are facing severe disruption today with commercial departures canceled at berlin's biggest airport. there will also be affected by ground walkouts and strikes. this industrial action comes less than a month after lufthansa scrapped 1200 flights

due to strike that it's hubs in frankfurt and munich. and a film made for less than $21 million was the big winner at the oscars, picking up big -- best picture and six other trophies. everything everywhere all at once independent studio a24 won out over the highest grossing pictures in u.s. movie history. that includes avatar the way of water and top gun maverick. global news powered by more than 2700 journalists and analysts in more than 120 countries. i am medicine mills. this is bloomberg. dani: thank you very much. that was such a good movie and i am happy it won as many awards as it did. coming up, we will dig further into the svb failure follow-up. we will be turning our attention to signature bank suddenly closed by regulators over the weekend. we will be talking about the

entirety of the banking sector as well. this is bloomberg. ♪

dani: new york-based signature bank was closed by state regulators on sunday. an auction for the lender could begin as soon as today. the move underscores efforts taken to backstop the u.s. banking system and concerns over the safety of deposits after the svb collapse. it goes further than u.s. consolidations. sky news reporting that hsbc is nearing a deal to rescue silicon valley bank u.k. sky also reporting the treasury announcement on svb u.k. is imminent. this is their plan a and we have

heard reports of how to rescue the u.k. lender. joining us now on the svb fallout is octavio marenzi, founder and ceo of opimas. if i can, i want to start on this sky news reports that hsbc is nearing a deal to rescue svb bank u.k. is this the way you expect it to go, especially with assets from the u.s. at the smaller regional banks that might be under pressure, that this is an opportunity for larger banks to come and scoop up cheaply priced assets? octavio: it is definitely an approach to doing it, but the large banks like hsbc will want some sort of guarantees from the regulators, from the central banks that they have taken out of these things. we saw this in 2008 with the larger banks against the small ones, and i do not think hsbc is doing this out of the generosity of their heart.

there are looking at this to say they can make some good money, however they need guarantees in place that the bank of england will need to give them. dani: what would those guarantees look like? octavio: basically saying we are going to give you full value for the assets on hand and make sure you hold on the deposits. if they take a deposit, they will basically say that you will not take any losses on that front. you can take the collateral of assets off the loan books and making sure you do not take any losses. that is the kind of guarantee that hsbc will need to have. the bank of england might say this will not cost the taxpayer anything and there might not be increasing tax as a result of it, any money that comes out of the u.k. treasury to finance this, but the bank of england will need to print the money to make this work. dani: i was just going to say

this is exactly what gundlach tweeted when it comes to the u.s., that in order to do this, they will have to print more money. when we talk about different tolerances to support the banking system, it does mean going back on some of the financial condition tightening that these central banks try to do. how much risk is there if what the boe and fed have to do to print more money to stabilize this market. how powder below -- how palatable is that? octavio: they're having no choice, but they are stuck in a situation where the whole thing looks schizophrenic in the sense that the fed has been increasing interest rates, tightening monetary conditions, and now they will have to loosen again for the banking sector. at looks like they have the foot on the accelerator and the break at the same time, so it will be a bumpy ride as a result of that.

there is no good way out for them. we will not necessarily see more bank runs this week or this month, but kick the can down the road a bit. the losses on these bond portfolios will have to redound -- root out and it will either be now or further down the road. it could become a problem that is even bigger later on. dani: take me to a year from now where someone has to bite the bullet as you say. what are the risks at step stage and what does another episode of this look like? octavio: another episode looks like the banks have to take large losses on their bond portfolios as they have to liquidate them if there is a deposit reduction. there is a real risk for that right now because people are sitting on checking in savings accounts in the u.s. and the rest of the world that are paying a 0% interest. you can get close to 5% on a six-month u.s. treasury and take no credit risk, no risk that a

bank will have a run and not being able to pay in deposits, so a lot of corporates and retail customers will look at that and we will see a seeping out of deposits out of the u.s. banking sector as people chase the yield. the bank will have to do something about that, so they have to sell off on portfolios that go up, selling some of their loans to find that sector and withdraw deposits. that is where the problem starts. they will have to take loss on them at that stage and sooner or later it will happen. dani: just wanted to give you credit. sky news reporting the boe is going to be saying that depositor money is safe as part of the svb u.k.-hsbc merger. some of the backstops, sky news saying that svb u.k. will operate as normal under hsbc bank u.k.. going back to what he was saying in terms of the re-think that is going on, when we look at the

continuing ramifications for regional banks, will this not only be a flood of money out of deposits into something that yields more money, but out of regional banks into larger banks? does this put the is this model of regional banks under distress, especially if potential regulation comes as a consequence of this? octavio: i think the regional banks that have large depositor bases have come from corporations. they are fairly unreliable depositors, tend to pull their money out quickly, as we saw from svb and those banks that failed this week. the firms that are not covered by fdic insurance, so our regional bank in particular, they do not have the access to the range of resources and funding that a large money bank what have, but if you are a regional bank that has a large retail the client -- retail client base, if you are a small

to medium-sized bank where you mostly have wholesale depositors and wholesale funding, then you will be at risk and see those deposits moving out the door even faster. dani: i am afraid that we will have to end things there, great to have you on this morning. octavio marenzi, founder and ceo of opimas. coming up, german automaker porsche is set to be releasing earnings later this morning. we will discuss that on the ground. this is bloomberg. ♪

dani: porsche is expected to post positive fourth-quarter earnings when the german automaker reports earnings in over an hour. parent volkswagen gave a

better-than-expected outlook in recent weeks, and that should provide confidence for porsche guidance. let's get to oliver crook. what are we expecting from porsche today? oliver: we are here at the porsche museum where they are holding the annual press conference for earnings and we will speak to the ceo later. question for the auto industry as you have two stories. will this be a good or bad year for the auto industry? you have pent up demand, china reopening, but then you have the fed tightening, rates going up, the economy slowing, and will that come down to the consumer who will spend less, and how will the carmakers fare when it comes to that? last year they had pricing power, big margins. and for porsche, this is a different story. it trades more like a luxury stock. with the other automakers, will they have that much power?

we will get the guidance later from the ceo and here we are at the museum. the 100 year history of porsche is here, the first car from 1889 was an ev, so before long we might go back to the horse-drawn carriage. dani: cannot wait to see you ride out doing coverage on one of those old cars. oliver crook covering harsh for us -- porsche for us. it will be a welcome break from the svb coverage, but we are staying on top of that for you. markets reacting, stocks moving higher, some relief from the u.s. backstop, but will we hear an announcement from the u.k. and from rishi sunak and what will happen to svb u.k.? we will stand top of it. ♪ ncial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors, the garcias, love working with you. because the advice we give is personalized,

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