haidi: you are watching daybreak: asia. the top stories, u.s. equity futures rise as ubs agrees to buy credit suisse after a frenetic weekend in global finance put the landmark deal worth over $3 billion. the takeover triggering a historic loss for the $17 billion of risky bonds which are now worthless. plus the fed and five other central banks join forces to boost dollar funding and a short economies from the growing strains of the financial system. annabelle: we have the open of the asx 200 and this is the first sign investors -- first chance investors will have to react to the deal. so far you can see the signals we have had of tentative positivity coming into the session did not appear to be forthcoming. this is the state of play in terms of the financials. staggered starts, so it will

take about nine minutes to come online. we see anz bank under pressure. that is the global bank etf down 2% in the opening moments of the trading session. if you change now we had seen other the more positivity coming into the fx space. one of the best ways to mark that is the aussie yen. that will be a signal of the risk appetite coming back just fractionally. we had also seen risk sensitive currencies. the aussie and kiwi dollar moving higher and the yen as well. they are continuing to weaken somewhat. continuing to monitor the equities versus fx market. we also have bonds trading underway. you can see we are having yields continuing to pull back. really a lot of debate around whether the fed will hike by 25 basis points at the meeting this week and whether they will stay on pause instead. the retreat really being led by the front end of the curve. so the big question is we are a

little more risk off at the open for australia and we will see if that continues into the market opens japan and korea. what are we seeing in u.s. features? shery: the treasury space when you talk about the front-end being whipsawed we saw in the u.s. as well with the two-year yields. moving more than 20 basis points every day last week. we are looking at features at the moment. when it comes to treasury futures not a lot of movement but u.s. futures still retaining some positivity. of course it is really early in the session and this also coming after we saw the s&p 500 logged a weekly gain of more than 1% last week despite the financial sector being battered. we had tech benefiting from this resilience when it comes to treasury yields. take a look at food prices at the moment. we are seeing a little of upside after its worst week so far this year. we are talking worst weekly loss since 2020, the beginning of the pandemic. we have to reiterate this is really early in the 80's and --

in the asian session. down from session highs. joining us now is sonali basak and kathleen hays. of course we have seen all of this movement around credit suisse. ubs coming in of course also the government regulators and the backstop as well. take a listen to what the regulator had to say. >> we are speaking close it key regulators. most importantly the ones in the u.s. and the u.k. that were deeply involved. you have seen today their support for the solution as well, strong support for the solution in the purpose of financial stability. shery: for our viewers waking up in asia right now, put this into context. how historic where the events of this weekend? sonali: truly historic. this ends a 166 year run for credit suisse. more than that, really.

this deal is being done at a value per share that is a 99% decline since 2007 of credit suisse's stock price. ubs is already systemic, becoming a larger bank across the world. this creates a wealth management giant as well as a larger investment bank. they are going to have to slim down the investment bank meaningfully. there are a lot of uncertainties ahead. now there are actions taken by the central government that are historic as well that includes 100 billion swiss franc the critique to aid the deal. remember, huge market implications given that now about $17 billion worth of 81 bonds have become worthless. while the shareholders will get something, this is $3.3 billion, significant there cap -- significant discount, the set of bonds being wiped out have more ramifications for how other

bonds are trading. these bonds created most crisis. --- post-crisis. and have the potential to make capital more expensive for the european banking system. haidi: when it comes to this court needed action on dollar funding, how does increasing these swaps operations help shield other economies as well? kathleen: it is a very important step and indicates the seriousness of the situation. when the federal reserve and other central banks are open swap lines it shows they are very concerned. of course janet yellen and jay powell put their best face on the deal that credit suisse made with its new swiss owner. what they said was, we welcome the announcements by the swiss authorities today to support liquidity positions. our u.s. financial system is resilient and they are in touch with their international counterparts to support their implementation. let's boost our confidence.

we have seen our neighbors, they ask us, should we take money out of our bank account? we know they need to restore confidence. the boosting the swap lines, the fed and five other central banks, some of the biggest in the world, they are taking steps to boost liquidity. and what they're doing is opening swap lines where they can cheaply issue dollars out for borrowing because in times like this you might be a company in korea, who knows where. you have dollar denominated and you are coming up short this is a way to keep things flowing and quelling bank runs. that is there concern, a shortage of dollars, not just in the u.s. but the world. this sends a very important signal. haidi: we have an idea as to what credit suisse's businesses and the specific operations will

look like? what does it mean for the strategy? sonali: executives firmly did not answer the boston spin out question, whether it would still happen. but you still have a huge investment bank being absorbed into another big investment bank. when you think about it you really have a situation where credit suisse, and about a day had faced $10 billion worth of deposit runs. when you look at the wealth manager it is not that much of the scope of the combined entity. what i'm trying to say is that while that caused a more immediate downfall of credit suisse, it's the investment bank and some of its composition, the risk profile that really created issues for credit suisse over decades. so now is ubs takes on this firm, they will be meaningfully de-risking that investment bank. credit suisse already had a plan to cut headcount i thousands. with ubs as well there are two things. one, what does that plan look

like as they have other cost to contend with for this integration? they have not yet given a headcount reduction target for the combined entity. but you can imagine that they will exist meaningfully given that credit suisse already has that plan, given the increased costs, and given the de-risking of the investment bank. so a lot of news ahead. shery: i think for weeks to come, months and perhaps years, they will be a debate on whether this is a bailout or not. the swiss finance minister saying it is not a bailout, but it kind of is. sonali: listen, in the u.s., that have been doing the same thing when it comes to government entity assistance. bailout has become such a politicized term, especially since 2008. does it even matter what the word is when you are seeing government assistance at these levels? the market might look a little calm right now but there are a lot of situations we are still watching at the surface and a lot of questions on how much more government intervention we may need to see in the u.s. and

abroad given the stress that these firms are under, given a new interest rate regime they are under. listen, the cost of funding just raised for a lot of these firms both because of the capital markets as well as the pace of interest rate rises. a lot of questions about any other stresses these banks might feel. shery: let's talk about the interest rate regime. because of course we are coming to the fomc meeting. what can we expect? kathleen: we can expect them to pause or hike. that is all we can say with great certainty. because the fed was dead set just 2.5 weeks ago. jay powell had signaled the high possibility of re-shifting, up shifting from a 25 basis point hike to a 50 basis point hike at the meeting. as the banking crisis unfolds, now the question is should they move. larry summers told bloomberg television last week that he thought the fed should follow in the european central bank's path. what the ecb did was go ahead

with a 50 basis point hike, because they said to do so otherwise would slow down and make markets worried and cause markets to panic. that is one reason to go ahead. now, lloyd blankfein, former chief exec it of a goldman sachs, saying he thinks the fed can pause now because what we are seeing in the financial markets is going to cause major tightening of financial conditions and that can take the place of a rate hike or two. that is the other side of it. another interesting thing people have to start thinking about, the dot plot. every three months they upgrade, revise the outlook for the economy, for inflation, for employment. and that means they change their interest-rate forecast for the coming year. what are they going to do at a time like this when they signal more rates hikes, by inflation. if they don't, that could spooked the market. one more thing, jay powell is under fire now politically, and that makes an even more tricky path for him. shery: kathleen hays and sonali

basak here with the latest on the banking turmoil ongoing here in the u.s. as well as in europe. our next guest says consumer trust in the banking system is being tested right now. with us his partner in the financial institutions practice. great to have you with us. i asked this question to sonali, is this a bailout or not, and she very smartly said it does not really matter at this point. has all of this helped, and how much has it helped shore up confidence? guest: thank you for having me. the right question is what is that confidence, because we know trust is paramount and consumers and corporate's say how is my bank engaging and are they transparent with me. is there a sense of reliability and are they advocating for me? government actions can bolster this but we also need action from the bank to say how do we make sure that long-term earned trust remains.

the good news for banks is consumers trust them. when we run proprietary surveys, banks always come out on top. even after the pandemic we saw u.s. consumers in particular, one in four said they trusted their bank more. so they are testing now. shery: what do they need to do from now on, especially the smaller regional banks that are feeling the pressure? hemal: what they can do is really take a second look and say what are the lessons we learned from the recent bank actions. these banks that had troubles, they were somewhat unique in many ways in that they only focused on a couple of business segments. they were not really universal or mainstream banks in some ways. a lot of the lessons can be around really some of the basic downs that look like they might have occurred around governments, around controls, and saying why don't we look at things like our balance sheet, where are we are deriving

deposits from. and probably taking a step back and saying can we just refresh our strategies and look at everything holistically and say, coming out of this moment, how do we become stronger and capitalize on this? haidi: the bond wiped out though, $17 million worth of ski notes that are now worthless, what are your thoughts on that? there's certainly the argument that seniority in the capital structure should have been restricted. this is pretty unusual? hemal: you could say in some ways we are in a little bit of unusual times. but i think some of the draw from this is banks may have to go back to some of their basics and say, at the end of the day while we have raised deposits, some of the best places we can deploy that money is by just lending and not necessarily putting in dollar securities or other things like that. even some of the banks that failed or had trouble, if you look, they had good loan portfolios, they could just not lend for some reason or had

taken a different tactic. that could be a way to move past some of this. haidi: what is kind of interesting is with the number of the bank failures or close calls to failures, depends on whether you want to call credit suisse ultimately a failure the way it has gotten to this point. there have been quite idiosyncratic stories. silicon valley bank is very unique in its business exposure and exposure to u.s. treasuries. for credit suisse, these have been long ongoing issues. is it just a matter of timing and the fragility of confidence at the moment? if that is true, what is to say there are other fairly well-capitalized banks that are not still on the line? hemal: yeah sure. as we know, as you have bank runs or these crises of confidence, a lot of it is around management investment perception. a lot of customers, they are putting their money into the bank. so a lot of this could be driven

by both rational and sometimes maybe even emotional or irrational actions. so a lot of this has to do with, how do you now quickly say, we have a control on this, and we are going to do better. there are things we can do so that these issues do not necessarily jump from institution to institution because they do not have to. i think there were some unique acuity arity's of the institutions -- unique peculiarities of the institutions. a lot of the more regional banks do not have some of that concentration risk or the issues that were there. so that contagion does not sincerely have to occur. -- not necessarily have to occur. haidi: hemal nagarsheth, appreciate your time. take a look at australian banking stocks trading at the moment. we are expecting to see some moves in asian financials in this monday session. we are seeing a bit of downside at the moment in the first 15 minutes or so of trade.

all down by about 1% apiece. futures are indicating quite a bit of downside more broadly. seeing a little bit of upside when it comes to the aussie dollar and the weakening in the greenback as well. certainly watching japanese financials as well. bloomberg intelligence saying australian banks when it comes to also lenders, they are quite solid given that their balance sheets are extremely robust heading into what is expected to be a week of more market jitters after the ubs credit suisse takeover. we will get you of course all the market reaction as asia opens for the day in light of that news, but let's get to vonnie quinn with the first word headlines. vonnie: warren buffett has discussed the u.s. regional banking crisis with the biden administration. bloomberg sources say they have talked about buffett possibly investing in the sector. we are told the berkshire hathaway ceo also gave advice and guidance about the issue. buffett has a long history of stepping into help troubled banks, hoping bank of america

and goldman sachs in the past. the fdic's is said to be moving towards breaking up silicon valley bank after failing to find a buyer. the regulator wants to sell the failed lender in at least two parts. the fdic is taking business friday for the bridge make it set up to take on assets and liabilities. bids for the wealth oriented private bank are due on wednesday. colony capital founder is taking a leading role in advising first republic bank as it races to avoid a collapse. sources tell bloomberg that he will be working closely with executive chairman to orchestrate any potential deal. a $30 billion rescue package last week failed to soothe investor concerns. i'm vonnie quinn. this is bloomberg. shery: next, amp says while bank failures so far do not look like a rerun of the global financial crisis, they do reflect

contagion risks. ahead of investment strategy shane oliver joins us next. this is bloomberg. ♪

>> the liquidity outflows, market volatility, shows that it was no longer possible to restore the necessary confidence, and the swift and stabilizing solution was absolutely necessary. this solution is a takeover of credit suisse by ubs. >> ubs intends to downsize credit suisse's investment banking business aligned with our conservative risk culture. >> this was not the best solution but it dominated the other two, trying to wind down the bank. but it is full of contradictions. haidi: some commentary from

bloomberg tv guests on the ubs credit suisse takeover. let's bring in shane oliver, head of investment strategy at amp. just want to get your initial reaction to this news as asian markets wake up. does this fix things from a crisis of confidence, from a market sentiment perspective? shane: look, it helps in the short-term. if we did not have this news, i think markets would be under a lot more pressure right now as we trade in asia and then europe and the u.s. so that is the good news, that is solution has been found that of course helps credit suisse customers. but the flipside is it is not a silly move the risk. -- not necessarily move the risk. shareholders are going to get less than they would have gotten friday if they had sold credit suisse shares. so therefore, funding costs for banks and debt for europe will

go up and investors and banks elsewhere will be somewhat nervous about it all. so it certainly helps, but it does not necessarily mean we are out of the risk yet and he contagion risks remain. -- the contagion risks remain. haidi: are the jitters made worse by the fact these are banks that were not badly capitalized? that was not a danger when it came to credit suisse. it was a different story entirely with svb. so potentially more could be on the line. shane: that is true. the story declared credit suisse on the one hand and the u.s. banks including svb is very different. they are by the same token. in part it does reflect a broader issue which is tightening of monetary conditions globally, which of course adversely affected very concentrated deposits in svb and other u.s. banks, and added to pressure on the already in trouble credit suisse. so this is the sort of thing

that happens when you tighten monetary policy aggressively and financial conditions tighten. that is the commonly can all of these and that is why it is too early to say it is over, even though the underlying problems are different. i would rather have the strong capital the not obviously there have been issues at credit suisse for a long time in terms of the loans they have made and losses they have made which have led to obviously problems with customers losing confidence in an organization. shery: how handcuffed is the federal reserve this week? shane: look, i think it is handcuffed to some degree, but it's not entirely. i do not think they can now go with a 50 point hike. if they did, they would be accused of having their head in the sand and not being aware of what is going on. that would just add to the risks. by the same token, they do still have some flexibility to do 25,

which i think they will probably do unless in the next couple of days we see a further intensification of the issues around banks. so it will be a close call. at this point my leaning is towards 25. i think if we did not have the credit suisse news overnight it probably would have been at zero. but i think they will probably do 25. and there commentary will have to be a lot more dovish than what otherwise has been the case. shery: which would be interesting given just a few days ago chair powell had put more tightening on the table. but given how bond markets have reacted and the volatility, it seems clear that, at least when it comes to the treasury space, financial stability perhaps seems to be a bigger issue than reining and prices. so what can we expect in rates in the next few weeks? shane: the trend is up, but less up than it was before in terms of rates. we know you have -- we know that

when you have financial crises at least for less lending and less financial costs for banks, all of which has a negative impact on financial activity. this crisis will do a lot or some of the fed's work for it. it probably takes the edge off, the amount they have to raise interest rates, and i think the fed will be well aware of that, which therefore gives them that degree of flexibility, not having to do the 50 and raise as much as they might have a couple weeks ago. shery: shane oliver, we will have to leave it here. we have plenty more to come. this is bloomberg. ♪

>> this is daybreak in asia. i am vonnie quinn with first world headlines. xi jinping is starting a three

day visit to russia in his first trip abroad since securing his leadership. he says it is important for relations between the two nations to remain at a high level. goldman sachs has nose-down the price forecast over a potential recession outweighing the search for demand in china. they now see brent ritchie $90 about $97 in the second half of 2024. the bank estimated crew could reach $100 in the fourth quarter. the leader of south korea's main opposition party could reportedly face prosecution over the next few days. they could be indicted on charges related to an alleged land scandal.

they deny any wrongdoing and say they are the victim of a political witchhunt. donald trump's claim that he faces imminent arrest has dealt the 2024 public and primary fields. party leaders including kevin mccarthy have offered support but most of trump's potential rivals have remained silent. this is just trump is the front-runner for the republican nomination. openness, power by monday 2700 journalists and analysts in over 120 countries. question let's look at heavy gauge these first markers to be able to react to that deal. >> we have the initial reaction coming through. we have the air sacs 200 trading down around 8/10 of a percent. it is better than what was predicted in the futures. we have 30 minutes to the open

in japan and korea but so far at the start of the trading day, it is that focus on the more red sensitive sectors like real estate down. this is the first chance we have had to react to that ubs credit suisse deal. we do continue to see yields retreating here. we do see u.s. bond futures taking lower. well off the 4% mark. bitcoin is something we will be monitoring very closely. it is becoming that alternative asset class above the 20,000 level. you can see the odds are around

here. this implies around and ability of a 65% from markets this week. that is why they are pricing in the odds of a 28 basis point -- 28 basis point hike. kathleen hayes along with our next guest, dennis lockhart was president of the federal reserve bank in atlanta. on the people of the global financial crisis. before that, he had a long career in banking including as a senior corporate officer. dennis, always good to have you with us. giving your deep experience, put the events of this weekend in context and when do you think we can breathe a sigh of relief? >> i hope this week we can breathe a sigh of relief. you should call him fears of a

global banking crisis. what i will be watching is whether there are more pressures on the liquidity of midsize and regional banks in the united states that would conceivably keep a mini crisis brewing for the next few days. that is going to be my focus. it is a good announcement over the weekend. >> this gets us rachel wednesday when the federal reserve announces its rates. some would say should not move at all the missed all this financial uncertainty. what do you think it will do and what should they do? >> the options have narrowed to two options. one is a 25 basis point hike. effectively staying the course in attacking inflation and the other is a tactical pause.

i caught -- i call it tactical because i don't think should be interpreted as somehow withdrawing from the inflation fight -- it should be interpreted as not adding any fuel to whatever they see as the financial stability risk. i think those are the two options. i think it is a very tough call. probably because we don't know what the internal assessment of the financial stability concerns really look like. going into the week. at this stage, i am inclined to give a majority probability to 25 basis point hike but a nontrivial probability to a pause. for me it is a very tough call before the meeting. >> they suggested the fed would not only cut their rate but they

did raise the possibility of pausing the quantitative tightening. they because it seems like such a big step to take because that is when they think liquidity is needed right now. do you think they will harbor that possibility? would it make sense to do that? >> i think it is one of their options and i can see the logic in simply pausing quantitative tightening because it is so widely viewed as removing liquidity from the financial system overall at a time in which liquidity of individual banks is a big issue. it would be sort of a symbolic move in some respects. i don't think 90 billion a month is going to make a difference greatly in one way or another to the -- to the liquidity of the banking system but i do think it would be consistently trying to

do something to help restore stability. >> all of this came about as an unattended consequence of the fight against inflation. is there a way this could have been avoided in the weight that the fed and other central banks navigated that battle? >> i think you have to go back and except that the fed misread the inflation risk for quiet sometime and then pivoted in march of last year and raised rates very rapidly. perhaps taking some bank management teams a little bit by surprise. it might have been avoided if the inflation fight had started earlier, if it had gone were gradually and even though it was extremely well telegraphed and signaled by the fed, they could

have done even more to prepare the banking system for arise in the policy rate and therefore the interest rate levels. >> how will chair powell have to navigate communication this week? >> he had put more tightening on the table a few days ago. this is coming when people around are saying this is not the right time to blink. that this could make things much worse if he actually does not go ahead with what markets are expecting already. quincy always has a tough communications challenge. i think he performs extraordinarily well in meeting the challenge. this week is a particularly tough one to navigate because the fed has two fights on its hands. it has the inflation flight -- fight that has been going on and this new stability set of concerns. he cannot favor one over the

other. he sort of has to make sure that he is constructive in trying to deal with both at the same time. to some extent, they are opposed. i think it is a tough communications challenge he faces. >> dennis, i would love to get another quick question. i know heidi would as well. did regulators make big mistakes with silken valley bank? did they make mistakes? >> i don't know the details. nobody has disclosed yet what the cadence of communication between the regulators, supervisors and the bank management was leading up to this crisis. certainly i think some aspects of the regulatory approach have to be revisited and rethought but i think we will wait to hear

basically what happened and what the regulators had been communicating. >> what do you see in the differences between banking crises passed? 1972, 19 84 and some of those lessons learned? is there a fundamental structure -- juncture where the fed's ultimate pursuit of financial stability, is it a bigger risk when it comes to inflation? >> i'm not sure i totally understand your question but first of all, i think if the banking system becomes very cautious which is fairly likely, i think if this pressure continues, that is likely to lead to a softer economy and

therefore will actually help in the short term the fed's effort to ship -- fed's effort to slow the economy. the real risk is if it persists and there is contagion and it becomes a much more severe downturn that was ever expected or ever intended, that would be an undesirable outcome. you have an unusual situation in which you -- if this is containable and it is just an episode and it creates a little bit more crush and -- caution on the part of banks, that is not what it is trying to engineer but if you get out of hand, it is clearly a bad thing. that is the communication navigation that powell is going to have to undertake wednesday afternoon. >> dennis, always good to have you with us. the former president of the federal reserve bank.

i should said federal reserve bank there. we take a look at the moves in fx markets as training begins here in asia in just a moment. this is bloomberg. ♪

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>> let's get more on the ubs deal. we will take a look at the file comes to what it means to depositors and investors, bondholders and regulators. chris ubs has agreed to by credit suisse to deal with anything and at a crisis of confidence that helped spread across global financial markets. this was government saying many times this is a corporate solution, not a bailout. the details paying around 3 billion francs for a deal that includes extensive government directives but also provisions. the price is less than half of what credit suisse was worth at the close of trading on friday. this was a national bank offering a $100 billion frank liquidity assistance while the government is granting a 9 billion dollar guarantee for

assets and losses that ubs is taking over and then the regulator said 16 billion francs will become worthless to ensure their private investors help shoulder the cost. we spoke to the chief executive. >> we were speaking very closely with key regulators. notably, almost important, the ones in the u.s. and the u.s. and u.k. are deeply involved. you have seen their support for the solution as well. strong support for the solution. ? as we want to know about this for future bondholders. we will also want to know how it will downsize the investment back as well. >> japanese markets opening up top of next hour. look at how assets are trading this morning. we are seeing the japanese yen. we had seen gains last week

given the threats to the global banking sector and we saw them around in today's session. we saw them reversing some losses. we had japanese equities on the friday session gaining ground. futures at the moment looking to the downside of .3%. we are watching japanese bonds very closely. the 10 year yield has stayed below that .3% level. basically below the yield cap of half a percent. this environment could really be helpful when the governor starts his term and perhaps not inviting too many speculative attacks from short-sellers that we have seen during governor curtis term. this is a picture as we go toward that market open. we are truly -- we are really trying to digest what happened over the weekend with credit

suisse, ubs and the government backstop as well. >> we have currency markets opening and fluctuating after that brokered a deal between ubs and credit suisse. garfield, you are watching the news we have seen again. what does this tell you about how currency traders are feeling about these developments? >> the currency traders are still extremely nervous is the obvious takeaway. we saw some gains in the u.s. dollar. we saw some gains for the aussie dollar and key we dollar and also the pound, the euro. even after those moves have been repaired, we are now in what you might call a very modest risk on mode. but you have to get your microscope to see it. especially given what has gone on beforehand. that is a tribute to do things.

one, to lose 1, 2, 3 banks, it is unfortunate. that really does make everyone worried about what is going to come next. either in terms of another bank facing troubles or simply because this is going to cause credit markets to be slower, more expensive, it is going to hurt economic sentiment. it is going to hurt economic activity. that leaves a low growth pile -- low growth profile. that leaves questions about asset prices and what central banks are doing. are they going to be engineering a soft landing out of all this? does this look like the start of a hard landing? that is the other reason why today's moves might be rather small. nobody is quiet sure what we

will get from the fed. if you had not had this banking crisis, you would have expected to be a half-point hike and some very aggressive words. now, everything is both on and off the table. >> where the arrest dollar goes from here as treasury yields continue to be pressured will determine where asia goes. we saw a bit of gains in support last week given a little bit more risk on sentiment. what will you be washing this week? >> asia could be a very interesting place given not only do we have the worries about what may be going on in europe but we did have china deciding on a 25 basis point reserve ratio reduction. they are supporting their economy. that is going to help a variety of assets around the region. a lot more optimism about the

australian dollar for example because china continues to act like there is potential for some emerging market equities, bonds and currencies but also, you will be set up for better gains than you otherwise would have been set up for. that is a key question. of course, the other thing is what you traders expect out of central banks? swaps traders in australia have again increased on a recut in the second half of this year. qwest garfield reynolds there with the outlook of the currency market. sue george is now.

we had seen the biggest lenders trading $30 billion to that lifeline to first republic. what are we hearing about warren buffett investing in these banks? class we do know that warren buffett is not only a respected investor but he has been regarded as a savior healing bands in the past. there have been multiple calls between the billionaire and the biden white house senior advisors in recent days specifically about potentially investing in the u.s. regional banking sector. we also know that buffett has given some of his views and broader guidance about the current banking crisis. buffett back the debt ceiling crisis in 2011 with bank of america stock plunging offered a lifeline, invested several billion in bank of america, return for shares and options. he also testified billion-dollar lifeline to goldman sachs back at the hat -- hike -- back at the height of the financial

crisis. they favored these kinds of private investments as sherry just mentioned rather than using government spending to backstop the banks. it was specifically instrumental in getting those 11 banks to get 30 billion in deposits from last thursday. we are told those commitments for at least 120 days. look how the stock performed in the past couple of days on friday, the stock fell by an additional 33% in the regular session. a little more after hours. that indicates concerns about first republic have not gone away and then on sunday, you're in the u.s., the s&p cut the rating a second time in a week, taking its rating a notch lower. >> we are seeing these ongoing efforts for the rescue for first republic. >> we are. the downgrade is another vote of nonconfidence.

the fact that the stock is down 80 plus percent year to date also hurting the crisis of confidence. bloomberg has learned that tom barrack is taking a leading role in advising first republic on options as it races to avoid collapse. it looks like that 30 billion rescue last week has failed to come investors. the lender has been tried -- has tried to reassure customers. >> much more to come on daybreak asia. this is bloomberg. ♪

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>> nikkei futures under pressure as the japanese yen is losing ground against the u.s. dollar. we are getting the doj summary of opinions from governor carruthers final meeting. one member saying they expect the yield curve discussion -- distortion to be corrected. we continue to see the determination to continue with ultra lose policy. we will be watching financial stocks and is wind market opens. this is bloomberg. ♪

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>> >> we are counting out to

asia's major market opens. we will watch if positivity continues into the asian session. we saw them buying credit suisse for more than $3 billion in a government brokered deal. what this really means when it comes to the first merger of two banks deemed systemically important around the world. will this be enough to shoulder the confidence? >> it came with a government guarantee. liquidity assistance from the swiss national bank but ultimately, the finance ministry saying it could not survive on its own. although we have continued to watch the reaction, we will look at the fallout here in asia. >> that is right. we have the opening of japan and korea. you can see the reaction we are seeing in the yields both rising

along the curve there. still blow that key 4% level. the question is whether all of these moves around the banking sector will force the fed's hand this week. markets are starting to discount the probability that we will see a 25 basis point hike. it is still firmly in play. some economists are saying we will probably see that move higher. still, more dovish commentary and the pressure from -- precip from jay powell after. that version is narrowing even though we had been above 100 basis points just a few days ago and some say that narrowing is the big indicator i what we actually start to see the session following extreme inversion. the focus is on how investors are reading this ubs credit suisse deal. some are really saying it was the best outcome in the market because it contains the best prices. we have seen that move away from the japanese yen. it is stronger against the

dollar. we are seeing risk sensitive currencies. stocks wise, we are seeing the nikkei come on line a little bit to the downside. keeping those bank stocks very much in play. let's change now because we have the open in korea today upon us. it has been whipsawed as a kate brown of the risk aversion in the market. it is lower against the start of the base trading here versus the more tech sensitive one. we could have expected to see a little bit higher this morning but we have the nasdaq rising at about 6% over the past few sessions. it did deteriorate into the friday close. tech stocks are one of the big decliners in the aussie session. you can see this down 1% at the start of the day.

keeping our eye on bitcoin. it is at that 28,000 level. we are watching it as well in gold prices. it has been fluctuating with direct sentiment in the markets. you can see that bid back into gold today, very close to that 2000 level. it is at its highest in about a year. >> it is an historic day. one that we hoped would not come. i would like to make it clear that while we did not -- cannot initiate discussions, we believe this transaction is financially attractive for ubs shareholders. additional support earnings growth over time. let's -- nine >> this was a

government brokered deal that was hastily put together. you just don't see these big bank measures generally let alone done over the course of the weekend. what does ubs get from this? >> this will indeed be a complicated deal for ubs. it is not straightforward. it will take a long time to integrate as well as significant cost are tied to the jail. you have to think back to 2000 eight. you think about j.p. morgan and bear stearns buying back for 2000 -- $2000 a share. you are seeing something similar to that in this case. less than one dollar a share. j.p. morgan had to deal with a lot of issues with the integration of bear stearns but it gave them this massive entryway into the trading businesses and made them one of the roles biggest. so what is the parallel to be drawn? it just makes them a much bigger wealth manager around the world. it is significantly increasing their presence in investment banking as well even though they have to significantly do you

risk the investment bank, remember, the credit suisse plan was already to cut thousands of jobs. ubs did not put a number on it yet. they will have to find the synergies between these two firms that have some overlapping presences, some different presences but remember, at the end of the day it gives them a bigger investment bank and a bigger wealth manager. and a bigger inflection point into of the united states as well. question was how shareholders are actually coming on top of bondholders. >> it is remarkable. i don't want to say the shareholders haven't lost a lot of money here. you think about the saudi dollar -- the saudi national bank. certainly the shareholders did take a bath here but you have the 81 bonds being fully wiped out. this is going to be something that is contentious not just for the bondholders here but you also have questions about the weight of these bonds, the

entire european bank market. there are a lot of questions about the risk profile to the 81 bonds known as cocoa's with other banks as well after you saw the worst case scenario. this action was brought on by the swiss regulator. this was not something ubs pushed. the idea was to make this deal easier for ubs at the end of the day. >> a very busy weekend for you and a very late evening on sunday. let's bring in the senior portfolio manager. manual life investment management. great to have you with us. give us your reaction to the events of this weekend. these are the changes expected in the banking industry.

>> the u.s. has been relatively rapid reaction. >> they do on financial markets to do it on a significant equity typing cycle. >> what does it do to the global growth outlook? >> are you expecting any changes there? >> i think there are two elements. what is going on in the u.s. economy -- because of this pressure regional banks felt in the u.s. and the results, what you're probably going to see is

a tightening of financial conditions and at the margin, less of a propensity to sustain credit by the u.s. banks to the economy. this does create a headwind to the secular growth outlook for the u.s. but on the china side, it is still relatively early days. the opening up of the economy post-covid is still a relatively slow moving action and the growth has been relatively subdued so far. we have a cyclical growth picture that has dimmed somewhat. the fed are in somewhat of a quandary because they completely pause their financial tightening cycle and that could create a second around pressure up on inflation dynamics. given their need to continue to focus on price stability, what we will see is a price hike by 25 basis points. there are financial stability criteria and future actions as

well as price stability criteria. >> how do you invest around this environment? >> one of the things we have observed -- it is justifiable. bonds or read volatility heavily spiked. it succeeded levels we saw during the covid induced selloff in markets. we think it will not remain at these levels. you will likely see some kind of faded and read volatility. even though it can remain elevated. we have increased duration in portfolios but we are being very careful about what to play on the curb because we saw over 100 spaces point -- a 100 basis point rally and pricing at substantial rate increases and breaking forward rate cuts again. maybe the pressure on the front resumes like it does early in

the long game. we are taking more duration risks but will be more selective within the curb itself. >> you spoke about china. a little bit downplayed in all of this is we had a rrr cut announced. does this give potential impetus in the equities rally because investors have been looking for more easing? >> it is not signaling confidence. it is signaling caution over the growth outlook. it might actually cause us to be a little bit more careful. it is also a very shallow rate cut of only 25 basis points. that signals the chinese policymakers also have relatively limited room. the fiscal position is already quit stretched. at the same time, there are some signs of liquidity shortage. if they lose in the monetary

policy too much, it could be a risk of margin amount l. one of the other things that happened overnight is that a number of central banks coordinated the extension and utilization of tele-swapping and liquidity lines. that has helped with the margin but from a policymaking perspective, china's policymakers do need to ease more but they have relatively limited room for that. >> what they decided to do to 81 or coco bonds, is that surprising to you? there is quit a lot of criticism that the seniority of the capital structure should have been respected. does that create extra when it comes to bond investors? >> it is a great question. we'll find out when the european markets open late today. i think it is a reminder that they carried with them a certain degree of risk and therefore investors should really approach that asset class with a valuation perspective in mind. you really need to be

compensated for that risk. one of the things the policymakers is which of that hope is that by filing, it should not have contagion effects in the broader banking sector. it is inevitable that there white heavily invested in that space. some of the traditional approaches were capital structure and priority put to one side out of necessity as a result of the situation with credit suisse. qwest great to chat with you on a daily today, mark. let's get you to therefore a look at some of the movers. you're looking at none other than the financial stocks that are moving. >> that is right. we just heard that perhaps this is something that could be relatively contained in asia and we are still seeing that sentiment here. stocks in japan are liking this ubs credit suisse deal.

japanese lenders have been more exposed to what is going on in the financial sector globally because they hold more treasuries than other banks. this is going to be a short-term relief rally but they do need to see more confidence being restored in the sector here. they do need to come out and see the fdic guaranteeing deposits in the u.s.. that is the state of play from these lenders in japan with the opening moments. we also have korean financials likewise trading. we are looking a little bit more subdued in the session here today. it is more risk sensitive. it does seem to be if you change now, some assessments coming across as classes. we do have stocks looking a little bit lower this morning. there are some under pressure. financials, real estate.

we are seeing the two year yield climbing. the rcn will be a good barometer of risk aversion. still keep an eye of what is happening with bitcoin. >> let's get to vonnie quinn with the first wood headlines. >> warren buffett has discussed u.s. regional banking crisis with the biden administration. they talked about possibly investing in the sector. we are told the berkshire hathaway ceo give advice and guidance about the issue. buffett has a long history of stepping in to help troubled banks. the ftse is said to be moving toward breaking up silicon valley bank after failing to find a buyer. our sources say the regulator wants to sell the failed vendor in at least two parts. the ftse has been taking bids until friday.

bids are due on wednesday. tom barrack is taking a leading role in advising first republic bank as it races to avoid a collapse. sources tell bloomberg that derek will be working closely with jim herbert to orchestrate any potential deal. at $30 billion rescue package last week led by some of the biggest u.s. banks. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. >> we get more on the currency market pullout. this is bloomberg. ♪

>> central bends around the world from the fed to the bank of japan are taking steps to venture investors there will be plenty of dollars to go around. this is despite the ongoing banking turmoil. kathleen hayes is here with the details.

can they finally calm markets? >> let's hope he can begin to call markets. as was central banks are trying to do. that is one of their number one obligations to restore financial stability and make sure this banking crisis does not worsen and turn into something deeper, longer and more economy heading then it has now. let's look at the first statement that came out from the fed and treasury to applaud the deal between credit suisse and ubs welcoming the announcement to support financial stability. the ego, capital liquidity positions of u.s. banking are strong. they want to make sure we know that and they are talking to their counterparts around the world which led to another important announcement this afternoon. the fed and five of the biggest central banks in the world, the bank of canada, bank of england,

the bank of japan, european central bank and the swiss national bank are boosting their swap lines. swap lines are one central banks provide to provide dollar liquidity. clearly a coordinated effort which is a global funding market. they are saying they are going to -- they are conducting weekly operations. now you can open that swap line, call on it every day. countries where they fund -- they may have dollar-denominated debt and there is a dollar shortage, a squeeze on the clearly, how can they get it? this is how they can get it. this is a big thing they can do. it still does not answer the question what will happen in the u.s. with republic bank and the divvying up of the sbb but it is a big step. >> we are just hearing from the japanese finance ministers, they

are speaking in tokyo saying they are carefully watching central bank liquidity in the -- enhancements. they will be examining how the credit suisse deal will impact japan. we know they have been having -- they have had their worst week since 2020 last week. clearly this is an incentive for central bank's as well. in terms of the fed, is it more likely we will get a pause? what is the likelihood of a hike this week? >> this has to be a question that the central banks are doing as well. this is what they are waiting to see. he things that everything is on an even keel but obviously everyone is watching this. can the fed move? can they hike when there is still so much uncertainty around u.s. banks when it could perhaps intensify this feeling? what if there is not liquidity?

what if they pause? will they be going with the european central bank did when they went ahead and did a 50 basis point hike because you have a big inflation fight, a long way to go? she said if they didn't, they might have caused a panic and made people think they are too worried about the financial system. the former head of goldman sachs saying the fed can pause now because what is happening in the base, depositors, all these things, they are removing equity and tightening financial conditions. and then the dot plot. over the course of the year, we will get past this and hike rates more. i think this is a tough question.

>> he joins me here in sydney. it has been a wrenching time over the past couple of weeks. what comes next? what are the implications? >> it is good to be on. soon the exciting times. there are big things that will stand out across asian banks. the first is probably banking. ubs is already a powerhouse and as a quarter of the two showing assets under management. credit suisse is second. asia is where the wealth is growing and i think that will continue. you will have a powerhouse in here. there is a real battle for talent and private banking and that just increases ubs is half. they have said they're only going to focus on the investment banking business where they don't have strength. i think that is clearly m&a. the combination of the two

really does put them close to the top of the pile in m&a banking and asia. i think those are the two things you will see a real emergence of ubs as an absolutely dominant player in asia. >> you talked about how this is a crisis of confidence. does that mean this does not necessarily fix that confidence issue for market? >> here is what my colleague said of credit suisse, it removes some of the unknowns. you have the 9 billion swiss bank. you have the swiss franc liquidity line. that is fine for ubs but when you look at the asian banks, not a heck of a lot changes. the asian financial crisis scared the pants of regulators. asian banks are very well-capitalized. they have heaps of liquidity. their credit default swaps did not move last week with the

exception of hsbc. i think from a fundamental point of view this doesn't change anything for those asian banks. they are already very solid. >> what will investors be focusing on for them to be able to finally breathe this sigh of relief? >> what francis chan and i -- what we really focused on last week was two things. the first was credit markets did not move. credit default swaps and bond crises did not move for the asian banks. i think we should continue to watch those credit markets. the second thing is look at the date of the banks we are talking about. the large proportion of these large asian banks are very well-capitalized. there liquidity is sound. they're extremely profitable on a global basis. and so focus on those fundamentals but if you're going to watch anything, i think credit markets will -- were a really good reality check last week. inns are still pretty sound.

>> think you met. you can get everything you need to know when it comes to this deal. there will be in this -- today's edition of daybreak. this is bloomberg. ♪

>> we did see european stocks seeing the worst weekly drops since september. we look to see some relief. 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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>> let's delve into the deal to buy credit suisse and the

fallout for depositors, investors, bondholders and regulators as well. francine dellacqua has more to do with switzerland. this is and containing a crisis of confidence that has really start to spread across global financial markets. the press conference finished here. this was finance minister but also the s&p president were all here and the swiss government saying many times this is a corporate solution. not a bailout. the details, ubs paying around 3 billion francs for his rival and in all share deal that includes extensive government guarantees but also liquidity provisions. the price less than half of what it was worth at the close of trading on friday. the swiss national bank offering 100 billion liquidity assistants while the government is granting a 9 billion franc guaranty for potential losses for assets ubs is taking over. the regulator said 16 billion

francs will become worthless to ensure that private investors help shoulder the costs we spoke up for the chief executive. >> we were speaking very closely with chief regulators. notably or most important, the ones in the u.s. with u.k. were deeply involved. they have seen their support for the solution in the sense of the purpose of financial stability. qwest markets will want to know what this means for future bondholders and we are hoping to get more details on what it will do with swiss bank and how it will downsize all of this as well. >> that is our colleague, francine the four in switzerland. let's look at how markets are trading at the moment. >> pretty interesting, we are i half-hour into the session for japan and korea. so far we are starting to see that risk aversion we had seen at the outset of the trading

open starting to moderate somewhat because we now have the asian pacific index trading mostly flat and a lot of the sectors had been looking weaker and you can see financials there very fractionally in the green. it does seem like the worst of the crisis around the banking sector has been contained with this ubs deal to take over credit suisse. what that means is how much will the fed pay attention to the cracks in the banking sector later this week? markets have been discounting that possibility. we will see a 25 basis point hike. all of that baked in. we can bring up this terminal chart. in terms of financial conditions, that is something the fed has been watching very closely. a reason they could be apt to slow their pace of high titan. we do see that index looking a lot more restrictive here. really backing the levels we last saw when the fed was hiking

by 75 basis points. the question here is whether they decide the fed financial stress is more transitory than inflation. let's look at how that plays out in the currency space this morning as we are starting to see those moves really coming through in the korean one. you can see it is climbing against the dollar. the yen is looking a little bit softer. >> let's bring in more. always great to have you with us. will you take a look at how the fx markets are trading at the moment? what does it tell you about the reaction to the deal over the weekend? across the big story over the last couple of weeks is the u.s. dollar on balance. this precipitous fall in u.s.

interest rates, bearing in mind it was the relentless rise in u.s. rates that started in 2021. there really was the primary driver of u.s. dollar strength. the fact that u.s. yields have fallen as far as they have explains why the u.s. dollar has been weaker. risk sentiment has been working the other way. there have been very cautious, tentative signs of slightly improved sentiment showing up in the stronger yen, the stronger aussie. we have seen equity markets with a somewhat stable footing at the start. we have seen u.s. treasury yields coming back to 11 basis points in tokyo. maybe those forces have started to go into reverse a little bit. it all depends on what the fed will do this week and the message that sends. i think these competing forces of u.s. interest rates and the fed will be cutting rates at the

end of this year which is what money markets are currently priced for, are we over the worst? have we cauterized a systemic -- source of systemic pressure? >> as you said, so much depends on what the fed does, what the fed messages but what the markets goes with in terms of fet expectations. in terms of the impact on some of the high beta currencies like the korean one or the risk proxies, do you expect further weakness? those big procyclical currencies like rc and kiwi in southeast asia and north korea, on that basis, we still have forecasts of substantially stronger levels of aussie and kiwi. that could really change on a

dime if we do see a deterioration of the financial conditions that annabelle talked about. we are a big fan of the bloomberg financial conditions index. it is no more tight today than it was last october. the fed is still signaling we have more work to do. the financial conditions are tightening excessively and i think they will push on. unfortunately, what the financial indices can't do is track banking lending standards. if the banks are really starting to rain in their willingness to lend, that would not show up in financial indicators yet, that might be a cause of concern and if the fed were to pause this week, i think i would be one of the things. cracks on the opposite end of that spectrum, we continue to have the via jay, we saw the safe haven demand boosted the japanese yen.

with leader summary of opinions, we continue to get that message hammered in that they need to continue with easing persistently. where are we headed with the japanese currency? >> a lot depends on the next month or two when they will get the bulk of the white settlement headed through. that shift will be down june and early july. that is when the japanese economy will be deemed consistent with a sustainable 2% inflation target then i think the negative and will have no reason to maintain their current policy. we are looking at july which will be the first meeting to be chaired by the new governor. but for the time being, look what has happened. to be as it was struggling to maintain 0.5%. the upper band of the y cc corridor two weeks ago. now yields have fallen 2.5%.

as take 11 market pressure off the doj to act. that suggests that july for us is the earliest we might expect to see it. cracks that has been really interesting. we saw that you target cap being up to .5%. we are no close -- we are nowhere close to that. >> it takes out that sort of kink in the yield curve and dysfunction and the view that the y cc target was well beyond its use. those pressures are certainly off. every bond market has enjoyed the benefits of that from a points point of view. -- price point of view. a lot of the pricing we are seeing at the moment i think

reflects positioning rather than necessarily being an accurate reflection of what markets are really thinking in terms of central-bank policy. >> almost hidden in the banking was the previously flagging the rrr card. is that a strong is a message to you? cracks we have the primary decision coming up but i don't think there will be a change there. i think this frees up a little bit of capital for the banks so improves profitability at the margin which makes it easier for banks to maintain the relatively rapid pickup in growth of lending we have seen over the past couple of months which has clearly been absolutely pivotal to maintaining the vigor of the recovery which seems to be underway. in that sense it is a good move. i wouldn't go that far with the message, the message from the psc has been about stable framework. they want to flood markets with

liquidity. i think it is a very small step but it is a little bit helpful to the cause of economic recovery and a bit of good news for the banks from a profitability point of view. twice always good to have you with us right. let's get you back to new york with bonnie quinn who has her first read headlines. >> xi jinping has started a three-day visit to russia in his first trip abroad. president xi says it is important for relations between the two nations to remain at a high level. the leader of south korea's main opposition party could face prosecution in the next few days. they could be indicted on charges related to an alleged land scandal.

the case is connected to his stint as mayor from 2010 to 2018. he denies any wrongdoing and says he is the victim of a political witchhunt. donald trump claims he faces imminent arrest. party leaders including kevin mccarthy have offered support but most of trumps potential rivals included ron desantis have remained silent. polls suggest drum is a clear front runner for the republican nomination. goldman sachs has nudged down its oil price forecast as concerns over the banking sector and a potential session at waste surge from china. the bank analyst now sees brent reaching $94 a barrel for the 12 months ahead. $97 in the second half of 2024. back in january, the bank estimated food could reach $100 in the fourth quarter of this year.

>> early in the asian trading session but we are seeing u.s. futures are bound session highs at the moment. this after we have had that deal with ubs by credit suisse for more than $3 billion in the government brokered deal. treasury yields are rebounding at the moment. although the entire mercury spectrum is above that 4% level. the dollar holding steady after we saw it dip against the rest of the g 10 basket of currencies. we will continue watching the markets. ♪

>> we were speaking very closely with key regulators, irregulars, those were most relevant. notably or most important, the ones in the u.s. were paid off. you see the support for the solution with the purpose of financial stability. our next guest says this is the merger of the century and the fact that it was raised over one frank -- frantic week went shows that urgency to restore

confidence in the markets. great to have you with us. as you say, it is very rare, this is the first merger of two systemically key banks in 15 years. the fact that we saw this done over the weekend, what does it tell you about how desperate regulators were to stem the market turmoil? cracks you see what a roller coaster ride it was in the banking sector globally. the swiss national bank actually injected liquidity but they realized that was not going to restore market confidence. that is why they had to broker this deal. also bypass shareholders to get this done. that shows the urgency to restore confidence and because

of the outflow deposit on credit suisse. >> there are a lot of questions investors have. and certainly i have with the way this was done. it was i or done under an emergency ordinance measure. shareholders did not get a vote and the cocoa bondholders were essentially wiped out. do you think this is going to lead to ongoing problems in terms of that being contested? cracks, see that as an issue. the swiss national bank does have the authority in an emergency situation. in terms of the rebalancing of this, i don't think there is an issue. >> what are we expecting from the asian banking regulators? there were speaking earlier to our own colleagues who follow the industry and they were telling us asian banks have been spooked enough during the asian

financial crisis. they have big guardrails in place for decades. what are your thoughts? cracks i actually agree with your colleague. in the aftermath of these two crises, banks around the world, especially in asia have tightened their banking regulation. i am really optimistic. we have really robust deficiencies there. >> how much more pressure would we see from central banks continuing to tighten? >> we have the fastest rate in history.

that is why i keep my optimism that the asian banking sector is your peer requested to have you with us. the sure to tune in to bloomberg radio to hear more from today's big newsmakers. get in-depth analysis from the debris team. broadcasting live from our studio in hong kong. plenty more ahead, stay with us, this is bloomberg. ♪

>> china tomorrow and expect to post a net loss of $4 billion for 2022. they cited factors including market volatility. it turned as losses in the second half of the year showing some positive momentum. the world markets in 2021 failing to release earnings on time and eventually revealing losses that lead to a bailout. china's ever grant is said to have reached an agreement with a group of major creditors plans to restructure its offshore

debt. sources tell bloomberg an ad hoc group of offshore bondholders have expressed support for the alien developer and this deal is in the works. questec a look at how markets are trading across asia. a little bit of a mixed picture with the cost beginning round but the nikkei under pressure. we are seeing those japanese banks still down, financials under pressure despite the fact that we got that deal between ubs and credit suisse of more than $3 billion. and of course, the government backstop as well. the sx is down and all of this coming at a time when we are watching the currency space very closely. the japanese and losing ground. a bit more risk on sentiment. still, we are very much looking forward to the broader ramifications when it comes to the banking industry. in asia. we are looking ahead to the start of trading in china.

the spring and sophia. we have not only the developments over the week and the banking sector to watch out for but also we do get those lpr's from the banks. what are we watching today? chris good morning. in the middle of all this, all of the views from credit suisse, the china central bank and made product, essentially that means it has unleashed liquidity into the financial system. the timing of this is incredibly interesting. it is expected to a nation about 500,000,000,001 over liquidity. this was why the unexpected and also really came out of the wood because the cabinet does tend to signal these shifts ahead of time. no change expected from today's lpr coming out at 9:15 this morning. economists are saying we can expect more changes down the

line. essentially it is too soon to be cutting interest rates today. what this does is make banks lend more. really get their credit flow into the economy to support the economy recovery from covid zero. the bottom line is this as china apart from the rest of the world. it is the economy that is recovering. the central bank is in easing mode. because not to say the central bank hasn't been watching everything going on, we actually had a previously for the first time comment on what has happened at sbb. cracks yes, exactly. an official at the central bank say this is essentially what happens when you have monetary policy, large shifts in monetary policy. this is the first time the pse comments there in particular and the fallout from the terminal in

the u.s. banking system but the previously for the past two years -- the terminal in addition -- terminal and the chinese markets, this is the monetary policy coming out of the u.s. and has been irresponsible. they have been telegraphing this for years and years. now there is a need to indicate -- an indication because the previous he was a lot more conservative in his approach during the pandemic. now we see why. the previously official site the u.s. financial system has a lot to do with fed policy and really sharp turns in what the fed did with liquidity. we are getting the latest from the monetary authority in hong kong. they are both welcoming the latest developments around credit suisse and the swiss financial markets and the suisse

national market helping broker that deal for credit suisse and ubs. they are saying they will monitor financial markets very closely by credit suisse's operation in hong kong is business as usual. the local banking sectors to credit suisse are significant. we are seeing the repercussions when it comes to how hong kong will be affected now. those operations in hong kong are going on business as usual. that is it from daybreak asia. our markets covers continues. the market opens in china are next. this is bloomberg. ♪ saur, colorado. we just got an order from dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. start for free at godaddy.com

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