>> latimer putin is a wanted man -- vladimir putin is an wanted man. for war crimes later to the alleged abduction of children after's invasion last year. the conlon says russia doesn't -- the kremlin says russia doesn't support the court and their decision. tricky and hungry both signaling they ran -- turkiye in hungry both signaling they are going to

get closer to expansion. emmanuel macron's government set for no-confidence votes. the french opposition parliamentarians filed a motion today to bypass lower house and further angering unions. calling for further local action followed by another day of nationwide strikes. global news 24 hours a day, online and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> welcome to "bloomberg markets. there is a lot to digest.

you are seeing big moves. liquidity at the market creating massive market moves. the s&p down 1% and yields down, a bit into treasuries out of a weekend that is expected to be news headline after news headlines. a 14 basis point move on the s&p and taking the dollar bound -- down by .4%. crude is a trading with 867 handle. -- with a 67 handle. jon: energy stocks remain under pressure. there is the shift of money and gold outperforming. we have the rare earnings story that has fueled buying into

fedex, largely because of the cost-containment's at the shipping giant but many of those issues influenced overall by what is happening in banking, the subsectors, the worst performing group, down 25% at this hour. kriti: we are getting breaking news, charles schwab specifically saying it got $16.5 billion in court net new assets, proves how much confidence they have in the banks. who is benefiting from this accident in the regional banks. let's get to commentary. wally added, said it is under control. -- wally adeyamo said it is

under control. >> it demonstrates our system is safe. why we will remain vigilant, the goal in this administration is to make sure depositors are safe. jon: someone who agrees with that is dick bove. walk us through your reaction and particularly yesterday to the banks coming together to firm up the deposit base for first republic your you saw that as an encouraging development. dick: it was more than just putting $30 billion into first republic. if you take a look at the federal reserve balance sheet produced last evening, you will see the banks together put $440 billion into the fed. in essence, the banks put a massive amount of money in the

federal reserve so the federal reserve didn't have to put money into lending the banks. all of the loans that supposedly were made by the federal reserve to the banks whether they were fdic or the new facility they created, all of that money came from the banks. you have not $30 billion put up, you're $470 billion, which is have a trillion dollars. i think the face of this disaster is ongoing has been solved, and expecting the banks to diet when after the other is over. the thing we have to look at going forward is i think you are seeing a bunch of things. number one, bank earnings will be stressed so they will not be good investments.

number two, the gentleman who runs, if you will, the supervision at the federal reserve of the banking system will come down with a whole bunch of regulations, which he doesn't have to go through congress to get. he will say, we want the economy straightened out. you cannot change it based upon what bucket you want to put into it. he is going to say it, you took so much money out of the banking system, not you are going to have to put it back. the top 10 banks in the united states did stock buybacks at $316 billion in the last five years. that money would have supported over $3 trillion in loans. the government will say, you have to put it back. you will equity offerings in the next months. kriti: let's take this from a monetary policy perspective. the consensus is, you have the

duration risk the banks were prepared for and then over extended and uninsured deposits was the issue. how should the fed respond to this to get that confidence back and the system that based on stock performance is not there yet? dick: the fact of the matter is, if the fed were to complain about the duration issue is like someone throwing a rock at a glasshouse. you will find that 48% of the securities, close to $6 trillion in securities, have duration for over 10 years and funding that portfolio with loans from the banks and deposits to the fed and they are borrowing money in the open market. for the fed to complain the banks that run the balance sheets inappropriately, and that is exactly what fed is doing

itself, would be somewhat laughable. the point is the fed will complain and you will see a change the structure of the duration of all of these portfolios and you will see an honest equity into this banks. it is accounting wise solid but in real word it is just not relevant to with the true equity is. kriti: certainly something we will be watching going into the weekend. we thank you for your time and insight. coming up, a conversation about corporate governance and oversight. that is with betsy duke, a conversation you do not want to miss this is bloomberg. ♪

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kriti: we are getting breaking news when it comes to credit suisse. at least four banks have curbed trades with the swiss lender, according to reuters. they will restrict some swap trades and limit the risk. it looks like reuters is talking about deutsche bank also climbing on board. at least four banks have curbed trades with credit suisse. we will bring you the latest. that brings us to the stock of the hour on the side of the atlantic here first republic bank shares down significantly despite the 30 billion dollar rescue package, a move at 24% lower on the day. i want to discuss the oversight

or lack thereof of the backing sector, who better to talk to it than betsy duke, chairman of the board at wells fargo. truly a pleasure to have you. betsy: nice to be here. kriti: given your intersection of monetary policy and on the banking front, what transparency are you looking for come sunday night? betsy: whenever the regulators make any kind of move, particularly over the weekend, i think it would be important to explain what they did, why they did it help markets understand this is not a one-off, part of a much larger strategy. if it is a single institution, then you run the risk of markets not knowing who might be next and whether there would be assistance to that institution and you create more confusion and you do if you are clear

about what you are doing and why. kriti: lets the monetary perspective as well. you have the federal reserve that stepped in over the weekend. should we be viewing their move as stimulative? betsy: i don't think so. in fact, i think they will actually -- the lending facility will increase the balance sheet, the size of their balance sheet as banks utilize it. that would be in some sense using from a balance sheet perspective which makes it more important that the fed do is -- it's job on the interest side with its tools. i see speculation the fed might not raise or pause. i don't see there is in you narrative for that makes sense for the fed. jon: maybe you can elaborate further on that. betsy: if you look at all the

communication before anything happened with svb. if you look at the public statements the chairman was making, they were hawkish and looked like they were leaving open the options for a 50 basis points instead of 25. he created an expectation the projections, new productions after the next meeting, that they would be higher than they had been before that. so i think it would be very difficult to back away from that to give markets a sense that the fed is not going to pay attention to inflation. they made the mistake of waiting too long to raise rates in this cycle to begin with. that is why they had to raise rates as quickly and as fast as they did with as many large

increases. i don't see them making that mistake again. jon: sorry, go ahead. betsy: if you listen to christine lagarde, her comments were very strong and that they can fight both issues at the same time. the tools are different. they went ahead with a 50 basis point increase. jon: we were referencing your time as a fed governor. we should provide context around that, the fact that you started in august 2008, weeks before lehman brothers collapsed come almost immediately there were massive decisions to make, including providing capital to aig to avoid collapse. looking back at those years, you talked about the need at times for the fed to act like a first responder. would you say it is in one of those times of need again? betsy: salute lee.

the first responder -- absolutely. the first responder and bank deposits. there is no bank in the country that can withstand or run at the speed and magnitude that silicon valley had. that has nothing to do with how sound they are. they are well-capitalized and credit is good and earnings are strong so the banks are in as good a shape as they have been on, but a run on a bank is still a very difficult situation to manage and if you get panic going, which happened in the financial crisis, your number one job is to settle down that panic and get rid of the fear in the market. kriti: let's build on that concept. there is this element of we need to make sure everything operates business as usual come monday morning, but i feel like a part of capitalism is the idea that something has to give at some went. where is that point? betsy: there will be plenty of pain points.

but having the system just wind down over something that is not necessarily related to the risk doesn't make sense. i am sure there are examiners in every bank of the country looking at liquidity plans and interest rate risk management and having discussions with management or actions that can be taken. if there is any action i would see banks taking, it would probably be to retain more capital, so things like stopping buybacks increasing dividends if that were planned, barring proactively to make sure you have plenty of liquidity. those things are bank management 101. jon: i wonder if those are the kinds of actions that can win over worried it stakeholders, because you yourself when you

alluded to it have experience in working with banks that were in need of overhaul. one of the global observations is for one of the challenged banks, the focus is on them and often times what you need is time for a turnaround and there is obviously a lot of uncertainty right now. betsy: i think the facility, the term lending facility opened, will give banks time to make changes in their investment portfolios to the extent they need to. it is a one-year term, which by itself is some time to reduce duration risk by one year. i think that will be very helpful. it doesn't look to meet like it is getting much take up and that is probably because banks don't want to be stigmatized by having used the facility. you may see either a new facility, the one the fed had in 2008 was one that was a weekly auction, designed to reduce any stigma associated with using

that facility. kriti: it is worth mentioning that not only do you have expense on the regulatory front but also at wells fargo, notably in 2020 amid controversy there. i want to ask you specifically about where you go next in terms of acquisitions. are you expecting regional banks to have acquisitions or be acquired? betsy: think doing acquisitions is probably not a good time to make acquisitions right now, because the currency would be somewhat reduced. i don't see anyone making big accusation -- acquisitions right now. in terms of who are the buyers of the banks that have failed, that is a tricky piece, because there are not many thanks larger than those institutions. the very largest i don't see making those acquisitions again. so there is a very small number of institutions that have the

size to be able to absorb something like that and the question becomes, does that institution want to take on those assets? a lot of the real value in an institution in a merger is in the franchise package with the deposits. if deposits are running, you manage that the you quite a bit. jon: you may have seen the headlines today, president biden urging tougher penalties tied to the leadership of failed banks. you talked about some of the things the banks can actively be doing right now in this time of uncertainty. what do you make of that comments coming from the president? betsy: not sure that would make a difference in terms of the overall riskiness of banks. there is a lot of politics involved with the government being involved in the banks and that is more related to the

politics of it. jon: we appreciate your time and insight. nice to have you with us as we watch everything unfold. former chair of the american banking association. be sure to catch an interview with former berkeley -- barklay ceo. let's look at credit suisse as we head to break. at least four banks have curbs on traits with credit suisse, according to reuters. this is bloomberg. ♪

jon: time now for today's for what it's worth. before the banking turmoil last week, many thought the fed's rate hike would be another 50

point move, and out some are sure we will see a hike at all. the bloomberg economics team has estimated the new stress and the banking system would be the equivalent of that kind of rate hike, assuming this turmoil extends into the second quarter. obviously some strains doing the work the fed was supposed to do before. kriti: what does that mean for march 22, the fomc decision? silicon valley bank group now notified by the nasdaq the stock will be delisted. they don't plan to appeal the nasdaq decision when it comes to those shares. the stock will be suspended on march 28. it looks like it hasn't traded since march 10, they would at 106 shares following a 60% decline. clearly some paint but it feels like the end of the era for silicon valley bank. jon: we were just having those comments in the previous interview about the kinds of ways in which banks that are

seeing stocks under pressure today can try to create more confidence in the system and clearly the actions that have been taken are putting money into the system, but the market performance today at highlighting the fears that are very real right now. kriti: all of those extra lending the regional banks got doesn't have the stock investors are bond investors with those left essentially holding the bag when it comes to silicon valley bank shares will have to break down that loss. it is something we will keep an eye on. we are still seeing selling when it comes to the s&p 500, down 1% for the day. jon: it is interesting, just going back to what we will we watching for x week for the fed decision, the strains we have seen from key -- watching for next week for the fed decision, the strains we have seen, investors not waiting to see what happens. some notable weakness in

financials. energy on pace for the weakest performance back to last year. kriti: what does it do for the bond market, so many questions, so little time. stick with us. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh ahhh ahhh these days, our households depend on the internet more and more.

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romaine: between a rock and a hard place. the s&p 500 3924. katie: happy friday. romaine: we are wrapping up another wild week. katie: it's not over we have about three hours to go. the s&p 500 is down right now, but up on the week. romaine: who would've thought three banking