tom: this is "bloomberg daybreak: europe." i am tom mackenzie in london and these are the stories that set your agenda. >> it is a historic day in switzerland, a day we hoped would not come. tom: a forced deal done and done. ubs will by credit suisse in a government broker to take over aimed at stemming a growing crisis of confidence. the wipeout in risk of credit suisse bonds known as at1 get written down to zero, risking turmoil in a $275 billion market. plus is the fed meets this week it boosts dollar funding with five central banks owing swap lines to ease strains in the global financial system but stocks and futures turn lower as the dollar pares declines.

the historic moment for credit suisse and ubs and the swiss banking center -- sector. manus cranny is tracking the history of these two lenders and he was there on the ground yesterday for this announcement. the key takeaways for you? manus: tom, listen to the bells. these bells are not winging -- ringing for a marriage of joy. they are ringing as we herald the birth of a new bank, a marriage of great inconvenience to two leaderships who have been forced together, but the triumphant bank is ubs, led by colm kelleher and ralph hamers. they have just picked up credit suisse for 3 billion swiss francs. this is a deal where it is not that of equals.

this is where the government came in with a lifeline of liquidity. the snb is therefore and square. we have 100 billion of liquidity , losses guaranteed up to the tune of 9 billion. this is switzerland trying to ensure its borders remain robust in terms of banking, but bailing in the bondholders is the single most disruptive aspect. have they absolutely inverted the capital structure of banking? the toll of that bell is for the demise of credit suisse, the birth of a new bank, and a whole new view on swiss banking. tom: manus, could you set the scene better? i do not think so. we will be coming back to manus for more analysis and the implications for these bond markets that topped up the riskiest tier of at1's.

then you have the central banks led by the fed coming out with liquidity positions and additional support in dollar funding and we will break down implications for that, raising many questions even as arguably you put something of a barrier around the crisis that is credit suisse. the benchmark index in the asia-pacific currently down 1.3 percent, banks in focus. you can draw on hsbc or standard chartered. across the hang seng index, down 3%. the concerns emanating from that decision to write down those bondholders to zero. across the european futures, losses of 0.5% and we will be zeroing in on the followed from the european banking center. to what extent does this raise additional questions? futures in the u.s. currently

range bound as first republic continues to be a question mark for regulators there. svb, regulators still trying to sell off parts of that bank and first republic after 833% drop on friday -- after a 33% drop on friday. what extent is this a safe haven bid or a litmus test of the health of the swiss economy? the two year at 3.84. not a lot of movement on the front end right now. last week you saw yields at the front end of the two year moving 20 basis points every single day of the week. brent is up to $72 a barrel. goldman sachs looking at the prospects of oil linking to a weaker economy. manus cranny in zurich with live

analysis, we have analysis from valerie tytel, as well as head of trading at mppm, guillermo hernandez sampere. this is a historic deal aiming to contain a crisis of confidence. colm kelleher says the deal is ultimately beneficial for the bank. >> it is a historic day in switzerland, a day that we hoped would not come. i would like to make it clear that while we did not initiate discussions, we believe this transaction is financially attractive for ubs shareholders, protects ubs from additional downside, and should uphold earnings growth over time. tom: for more, let's get to zurich with manus cranny. a shotgun wedding is how you described it. is this where stability came first and all other issues second?

manus: i think it did. it took delivery in the stack which took delivery of liquidity and a lifetime to this country and to the people of switzerland. and then colm kelleher, the chair of ubs, went on to say global. this is about selling a message to the world, which is the other opportunities were simply unpalatable. there were many times during the press conference where they said this is not a bailout. this is everything. everything that is a bail in of the one holders. mohamed el-erian says it is not clean but the best option. kelleher talks about the opportunities for ubs, but at the end of the day this was about trying to stymie the flight of capital and deposits out of this swiss institution, credit suisse. tom: and the shock for the

markets coming through in terms of that decision around writing down those at1 bonds. despite the fact it is written into the prospectus, this is what happens in a moment of crisis. is this move ultimately the killer for these markets? manus: we need more detail. valerie will take you through some of the components of wendy's cocoa's were used before. -- when these coco's were used before. have they inverted the capital structure where equity gets wiped out and the bondholders get the slip? here we have a potential inversion of the capital, but we need to see if they are coco's or cogo's. coco's turn into shares and equity. cogo's go onto the balance

sheet. we need clarity to go forward. this feels like an inversion of the capital structure. tom: an inversion of the capital structure, certainly that concern is playing out across the banks in hong kong right now. hsbc currently down 6.4%. manus cranny on the ground in zurich. thank you. among the biggest losers in the sale of credit suisse are shareholders in those risky parts of the bond markets, 81 -- at1's. let's bring in valerie tytel. what is the context and the precedents for this at1 right now? valerie: this is the largest ever loss in europe's at1 fond market and it is possible it might lead to an industry wide repricing, but it will take a while for the market to digest the impacts of this. many people are drawing parallels to the previous president we had in 2017.

banco popular was absorbed by banco santander and there was one spot of their at1's. the important difference there was that the equity was entirely written off in that example. that is the opposite of what has happened overnight with the $3 billion going to the shareholders of ubs -- of credit suisse. tom: the other huge headline is and was of itself a huge significant moment for the central-bank action. the federal reserve leading the charge alongside five other central banks in providing additional liquidity via dollar swaps. the importance of this move, what it tells us about the anxiety for central banks. valerie: people are saying this is a move by central banks to preempt any dollar liquidity funding stress. the last time the central banks did an action like this was march 2020, and that caps the peak for the dollar act then.

-- dollar back then. there were zero bids, so so far there is not any squeeze for dollar funding seen in the asian market. the bloomberg dollar index since this crisis started has traded nearly flap so the stress of dollar funding is not there yet. most people are opening the swap lines as a move to preempt any future funding stress. tom: markets reporter valerie tytel with the significance of going down 20 of these at1's and the backstop coming through in terms of these dollar swaps from the fed. joining us now is guillermo hernandez sampere, the head of trading at mppm. good morning. what a day to have you on. let's start here. have the authorities in switzerland put a ring fence around the systemic risks of credit suisse while opening the door to another market risk, which is these at1?

what is your take of what is happened the last 24 hours? guillermo: next for having me. the fear of contagion must have been very big to close such a deal over the weekend. central banks and governments. they must have been very anxious to close the deal to avoid any contagion. i think it is still too early to say that we are back in calm waters. tom: too early to say we are back in calm waters. are there particular names within the banking sector that stand out to you right now that are looking the most vulnerable? what are you watching for? guillermo: stock prices usually do not lie. you see under pressure, and that is what we had last week, rumors

also about two other institutions in europe. we have the ecb comments. it will not take long until banks with liquidity issues will be identified, and that must happen very quickly to find the appropriate support for those institutions and for markets in general. tom: and your take on what we have heard about the at1's? it has been written into the perspective of these bonds that if you buy them, they are in the prospectus and it does caveat that should you get a moment of financial stress for the banking institution, you could see these assets written down to zero, and that is what has happened. it is the priority that has been put on the bondholders taking a hit first versus the stockholders. that is the concern for many.

what is your take on the broader implications of these at1's for the bond market? guillermo: usually the stockholders are the first ones that get hit. i do not think we can already oversee the impact of the right out of those bonds. it will take more days to evaluate this situation and i am sure a lot of people are scared that something like this could happen to other bondholders as well. so there will be action from the investor side. other ones that suffer the losses right now, i am sure they will speak to their lawyers to

prepare any kind of legal action. tom: guillermo hernandez sampere , head of trading at mppm, thank you for joining us on this historic morning. we will take a deep dive into the historic credit suisse deal in our banking breakdown. a special edition of "surveillance: early edition" and that is anchored by francine lacqua at a few hours time. this is bloomberg. ♪

>> this was not the best solution, but it dominated the other two, which was either naturalization or trying to wind down the bank. but it is full of contradictions. >> those of us in the bond market always knew that at one's where the fulcrum in the bank's capital structure and we always

wondered if there was an event that would cause the bail in bonds to be bailed in, now we know. >> whether the fed tightens a lot, financial conditions will tighten from here. >> what i will be watching this week is whether there are more pressures on liquidity of midsized and regional banks in the u.s. that would conceivably keep this mini crisis brewing for the next few days. >> when the first crisis happened in 2008 and the issue was systemic collapse, we do not have that now. have a crisis of confidence and that can ratchet into a bad economy. tom: markets guests reacting to the ongoing banking crisis. let's bring in viraj patel, global macro strategist at vanda research. let's start here. we can debate whether or not it was a bailout. it was certainly a bail in.

does the action the last 24 hours to resolve this crisis, does it raise more questions than it answers? viraj: i think there are going to be second-round effects and we are starting to see that with the debate around at1 bonds, but from a general perspective, i do not think anything is massively self. we need to give credit where credit is due and central banks have been acting decisively over this crisis the last few weeks, more decisively than we have seen with these preemptive headlines we are seeing adding to swap lines. to some extent, yes, there are risks being taken up, but this whole situation, we are simply exposing a broader factor at play, and that factor is that we have policy rates significantly in restrictive territory. if you believe that with

monetary policy works at a lag and the speed at which central bank has been moving has caused to the markets and consumers off-site, we are not done here, and there are more skeletons to come out of the closet. tom: and where are you looking for those macro skeletons? where are the vulnerabilities now and how strong or not our european banks in the face of this? viraj: banks are one place. we also have to think broader than that, and the issue that we saw last week with the portfolio liquidation and the asset liquidation. we saw the second-biggest week of short covering in two year treasuries. that is not normal. the last time we saw that was around the gse and the lehman collapse, so we are seeing moves that are historic and we will see moves outside of the banking system. that is largely what troubles policymakers and keeps investors

very cautious because we do not know some of these unknowns that are out there. tom: the unknown unknowns and the second-round effects. i wonder then the reaction function from the central banks and front and center this week is the federal reserve. there is some analysis the banking crisis we are seeing now has led to 1.5% points in terms of equivalent tightening for the fed. you think they hold and stay positive this week even everything ripping through the markets? viraj: unfortunately we are at the stage where the fed will do what the markets allow them to, and it will go down to the wire in the next 24 to 48 hours. it is never a great place to be when you are taking a cue from markets, but we are at this stage. we all know the macro reasons behind hiking, that is very clear. the underlying financial risks

that have been brought to the surface the last few weeks have put us farther in the works. i love the concept that interest rates will deal with macro risks and balance sheets deal with financial risks, and that was the message we got with the ecb last week. i hope that is the message we get from the fed, but in reality we have never seen that before. we have never seen a world where inflation is where it is today, balance sheets elevated as well, so we are in uncharted territory. my sense is if the markets allow a 25 point hike, the dovish 25 basis point hike would do less damage than a hawkish confusing hold. that is probably where i am at at the moment, but it will really go down to the wire the next 48 hours. tom: given the uncertainty, how do you position these markets? do you get into cash or wait on the sidelines? what is the preferred hedge at this point? viraj: this is not 2022.

that makes sense, but the messaging is that we are in a different environment when it comes to monetary policy, where rates are relative to some level of neutral, and that means you want to be owning left tail hedges. those left tail hedges have got to be selective. you have to be tactical overnight where the right tail risk for the dollar is cash taken out with the swap lines, but there is value in yen crosses because we are still in portfolio liquidation road so you have flows and though i wonder that the yen trade is still something i am watching for. the yen trumps other havens, but then you have recessionary based pressures such as energy, trying to be overweight duration and quality duration than the equity sector but not outright bullish on equities yet. really selective, really

tactical, and try not to make any hail mary bets. tom: no hail mary bets in this environment. adding to goldman your positioning and the yen in favor as your fx hedge. viraj patel, mobile macro strategist at vanda research. we will take you into a deep dive into the credit suisse deal in the banking breakdown, a special edition of "surveillance: early edition" anchored by francine lacqua in zurich at 9:00 a.m. u.k. time. this is bloomberg. ♪

francine: ubs has agreed to by credit suisse in this historic government brokered deal aimed at containing a crisis of confidence.

the press conference finished here. the chairman of credit suisse, ubs, and the snb president were all here, and the swiss government saying many times this is an appropriate solution, not a bailout. this all share deal includes liquidity provisions and government guarantees. the price is less than half of what credit suisse was worth then -- was worth in the close of trading on friday. snb offering $108 billion of liquidity while the government is providing additional assistance for assets that ubs is taking over. finma said 15 billion worth of credit suisse bonds will be worthless. >> we will be speaking closely with key regulators, the most relevant for the credit suisse group and the u.s. most notably, the ones in the

u.s. and the u.k., and you have seen today their support for the solution as well, strong support for the solution in terms of the financial stability. francine: markets will want to know what this means for future bondholders and how ubs will downside the credit suisse investment bank. tom: francine lacqua with the detail on the ubs-credit suisse deal. coming up, we will bring you more analysis of that historic deal between ubs and credit suisse. stay with us. this is bloomberg. ♪ as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network.

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tom: good morning. this is "bloomberg daybreak: europe." i am tom mackenzie and these are the stories that set your agenda. >> it is a historic day to switzerland, a day we hoped would not come. tom: the deal is done. ubs will buy credit suisse for 3 billion swiss francs in a government brokered takeover aimed at stemming a growing crisis of confidence. the riskiest credit suisse bonds known as at1's get written down to zero, risking turmoil in the $275 billion market. plus is the fed meets this week, it boosts dollar funding with five central banks buying swap lines to ease strains in the global financial system. stocks and futures turned lower as the dollar pares declines.

lines crossing now from the largest shareholder on friday of credit suisse, the swiss saudi national bank saying the changes in the credit suisse valuation will not impact their plans. the saudi national bank saying they remain comfortably above the threshold. the saudi national bank has taken a significant hit in terms of its holdings in credit suisse because shareholders are getting less than half the value from the friday close as part of this deal for ubs to take over credit suisse and the context historically is the value of credit suisse has fallen 99% since its peak in 2007. we will keep across these lines for you and the impacts for large shareholders at credit suisse on the back of this historic deal. let's check these markets as investors adjust and position around what the regulators in switzerland were hoping would be an event that would at least contain the risks around credit

suisse. of course it has remained a question now, opened up a door around questions for bondholders, particularly the riskier parts, the at1's, written down to zero. banks falling, hsbc down, standard chartered also lower. the hsi in hong kong lower 1.4%. the dollar liquidity swaps led by the fed to ensure that liquidity is there. on the week, we are expecting the fed to make that decision. do they go 25 basis points as the markets start to just lower their expectations of a hike from the fed? euro futures pointing lower by 1.2%. u.s. futures as first republic bank remains in focus, down 0.5%. ebs has agreed to buy credit suisse in this deal aimed at trying to contain a crisis of confidence that started to

spread across global markets for for more, let's get to zurich and bloomberg's manus cranny. a shotgun wedding, as you have described it. is this where stability came first and all the other issues came second? manus: absolutely, along with anything to do with antitrust, anything to do to really settle the nerves of global financial markets. credit suisse was never in a strong hand going into this over the 48 hours of these emergency talks, and they began at the back end of last week. they did not just happen on saturday and sunday. what you have got is it is about liquidity, trying to get some kind of assurance to this nation about their pension fund, but everyone around me has some vested interest in credit suisse and ubs whether it is about liquidity or a left line because any's reign in liquidity has the

impact to draw down and tighten up financial conditions. there is extraordinary government support. that triggered the bailing in of the bonds. this is one of the moments in history that you will look back and say, it was a long running goodbye at credit suisse, the saudi national bank triggering the final sort of damocles that imploded the liquidity around credit suisse. this is not a merger of equals. this is a merger of the strong, and that will be repercussions as a result of that in terms of what happens at credit suisse. tom: the valuation for ubs getting some of these surprised assets, but the challenge for management to have to work through this integration in the months ahead. when it comes to the markets, the at1's down to zero.

this is what they were designed for, but the markets are reacting. manus: they are reacting because this is a second major test of these bales and bonds. -- bail in bonds. we need more clarity around those at1 bonds. they got triggered and in other words, the bonds are worth zero, but equity will get a morsel, and this is what is strange, which is equity normally gets wiped out and the bondholders mainly get a morsel on the back end. it seems like they have inverted the capital structure and that is the first take on that, and that has caused agitation in the hsbc at1's standard chartered bonds, etc., and people want clarity around this, so we are not done with understanding the true ramifications of this deal. we are only getting started in

terms of what de-risking credit suisse might look like, and kelleher is aiming to bring that credit suisse valuation down 10% coming into this group. tom: thank you for the latest out of zurich. joining us for more is bloomberg's marion halftermeyer. what has the ubs ceo ralph hamers and saying to his staff? >> first it was a broad reassurance that they would be continuing business as usual, and the first steps are that they are still competitors, oddly enough, until the deal is fully closed, so he has communicated to staff, let's be professional, but until we have announced full closure, you are still competitors with credit suisse. moving forward, he said we will be communicating as and when we can how this integration is going to work, and importantly,

people are worried about their jobs, so whether or not they will still have a job at the end of this merger. tom: 125,000 jobs between the two banks. what are the key priorities now for ubs before and beyond reassuring their staff and what the key priorities for the swiss authorities are? >> the key priority for ubs will be going over the details of this deal. this came together so quickly that they themselves admitted they have not had the full comfort you normally do in a deal of this size in terms of due diligence, and that was the contention over the weekend, how much losses might they be buying with credit suisse, how much risk are they taking on? so there is this entire portfolio of hard to value assets they have put into a box and that is where we are seeing the at1's coming in to stop get -- stopgap where they might be in the future.

and going forward even further, they will have to be looking at the whole integration across many geographies across their business lines in switzerland, wealth, investment banking. in terms of swiss authorities, they will be watching this integration and also be involved in the swiss employment plans because we have to remember a huge majority of corporate functions of both banks are headquartered in zurich in switzerland, so that is a lot of jobs for a small economy. tom: bloomberg's marion halftermeyer in zurich. thank you for working through these challenges. let's bring in johann scholtz, the equity research analyst at morningstar. good morning. the action we have seen the last 24 hours from regulators, the government, and ubs, does it contain the contagion risks that were emanating from credit suisse? johann: good morning.

it goes along way to do that, especially for looking at the fundamentals of the deal. what gives investors confidence is the level of government support that is involved both in the form of liquidity and also in the form of guarantees for future losses on the credit suisse portfolio, and also the restructuring costs. the at1's provides further capital losses. importantly, ubs is better positioned to execute on the restructuring of credit suisse. that has been something that should have occurred a while ago. there should be no concerns

around the viability of ubs. tom: clearly there are prized assets within credit suisse and that ubs has got for a bargain, but they will have to work through and spend a lot of time and attention on this merger in the months ahead, potentially leaving the door open to their rivals across europe. is that a risk for ubs? how do you think they work through this? johann: ubs was clear this was not a deal that they were actively looking at. it is something they did to support stability in the broader financial markets. but yes, acquiring some high-quality assets, something that gives us confidence. also the fact it has managed to persuade the authorities they can hold onto the swiss bank of

credit suisse, which is a retail and commercial bank with a bit of private banking. that has been profitable all throughout even last year. once again, that gives a bit more capacity for them to absorb future losses. tom: the broad implications of these at1's, the right down and the selloff we are seeing across that space, 275 billion is the value of that part of the bond market. what is the broad implication if we continue to seek selloff in at1's for the banking sector? johann: it should not be that material. obviously in broad numbers, it sounds a lot, but in terms of the capital structure, it is a small sliver in the capital stack. the reality as far as we can ascertain, there are no banks that need to raise at1 funding

at this time, so even though we expect the spreads to go up, that is not something that will translate onto the banks immediately. tom: and if the markets are sniffing out will mobility, where are they likely to end up? johann: from our perspective, the rest of the european banking sector and investors are hearing the same story, but they have got high levels of liquidity, and most importantly, even through all of this credit suisse, silicon valley bank, there has not been deterioration in credit quality it. this is a huge banking crisis in the making where we have not had a credit development.

tom: so the credit quality remain solid across these banks. which banks are looking like a good opportunity? there has been a significant sell down, about 15% in the last seven days or so, across europe. which banks do you prefer? johann: a lot of operations are in emerging markets, and incredibly strong franchise in mexico. it is removed from all of this. we still have ing in the netherlands. i have got quite a bit of visibility in terms of revenue going forward, seeing it has upped the interest rates, so earnings possibilities are there, and also in the nordics, one of the most stable banks in europe. it is a good bet in times like these. tom: johann scholtz, equity

research analyst at morningstar. thank you for joining us with your preference for the likes of ebva and ing. we have a line crossing from deutsche bank saying they have near zero exposure to credit suisse at1 bonds. that is coming through from deutsche bank, spokesperson commenting on the exposure to at1 credit suisse bonds and saying they have near zero exposure to credit suisse at1 bonds. a redhead crossing the terminal, the 10-year treasury yield: to its lowest now since september -- 10 year treasury yields falling to its lowest now since september. a move lower by nine basis points, 14 basis points move lower at the front end. the two you're currently at 3.69. coming up, we will continue analysis and commentary on the top story.

the swiss bank mega takeover. stay with us. this is bloomberg. ♪

tom: a comeback. ubs has agreed to buy credit suisse in this historic deal. that's dive into the details of that acquisition by ubs and credit suisse. bloomberg's nabila ahmed joins us. what does that deal look like for the investment part of ubs? the chairman said they had a risk-averse business model over at ubs. >> good morning, and that is exactly it he also used the word downsizing, but that is not a great word if you are an

investment banking unit, so ubs will be downsizing the credit suisse banking unit and bring it into alignment with ubs's more conservative risk culture. what does that mean for the future of this first boston spin out that credit suisse were talking about as late as last week? the plan was to spin up the investment banking division and ipo it in 2025. that is looking like a distant hope at the moment, and it is a division that has taken a lot of risk, so ubs is caution -- cautious about that. he did say there will be alignment of complementary businesses in certain areas, and asia-pacific is one of them. no that credit suisse as an investment banking business has done better than ubs's in the last 12 months in the asia-pacific, so that is something to keep an eye on. tom: other parts of the credit suisse business model may be

spared as part of this acquisition. i am thinking the swiss bank and the message -- asset management part of the business. >> that is right. private wealth and the swiss bank are the key assets that ubs wants to keep. the swiss bank that will be hurdled in terms of the overlap, and there is a lot to work through here, but that is something they singled out on the analyst call late last night your time, and also areas like latin america and asia pacific were mentioned for that private wealth business. it is a growing wealth market in asia, so that is something to keep an eye on, but they did say they would be aggressive and decisive about non-core assets. they would not just stick to credit suisse's earlier definition of what was non-core. they did acknowledge it is not like they can sell the assets tomorrow, and it will take a while to work through all of that. tom: and if you are sitting in ubs at the trading desk or any other part of the business at

credit suisse, you will be interested morning around what happens next. what happens echo does been telling their staff and employees -- what have executives been telling their staff and employees? nabila: it is business as usual and ubs ceo ralph hamers sent a memo to staff to remind them that until the deal closes, ubs and credit suisse are still competitors, so do not share business information because we are still competitors. staff are anxious coming into work today because there will be a lot of job cuts and it has already been flagged that there will be job cuts, many thousands perhaps on top of the 9000 that credit suisse had already announced, because ubs is looking for an annual cost cut of $8 billion in addition to what credit suisse is already planning to do. tom: nabila ahmed walking us

through the details of this deal, the implications as well for the markets and employees at both of those banks. coming up, we look at the global reaction to the historic deal for ubs to buy credit suisse. that is next. this is bloomberg. ♪

tom: welcome back. let's check in on these markets and focus on oil. wti slumping to $65 a barrel as the banking crisis has led to a reassessment about the health of the global economy and demand, the tightening effects of this banking crisis and how much work that is doing for the central banks on a week the fed makes its decision. the futures for the u.s., s&p

enough pointing to losses of 0.9%. we look at the markets as we get a write down of at1 bonds to zero. goldman sachs says that brent will not get to $100 a barrel by the end of the year now. 3.67 on the u.s. two year yield, a move 16 basis points lower in terms of yield as markets price in less than 25 basis points from the fed later this week. there is the dollar, currently range bound. and whether the swiss becomes a haven or the yen remains the bet for investors, that is the benchmark now, range bound from the u.s. dollar. the move from these bond markets pronounced again. the federal reserve, bank of england, released statements on

the back of this ubs and credit suisse deal. the liquidity of u.s. banks is strong and we hear from the ecb's villeroy when it comes to european banks. bloomberg's european correspondent maria tadeo is in brussels. the reaction then? maria: late sunday night statement from the european central bank signed by the head of the european central bank, madame lagarde. once again reinstated her confidence about the european banking system and insisting liquidity will not be a problem on top of the global joint central bank moves to improve liquidity starts today and runs until april. if you think about thursday and the press conference when the european central bank had 50 basis points -- hiked 50 basis points, one of the sources told me that was her best conference to date.

lagarde says there is no trade-off between market conditions and financial stability. she is expected to meet with european officials and also speak before the european parliament twice. this is a meeting already on the agenda. the idea was to debrief decisions made last week, but we own of the questions going forward now will be about the banking sector and its resilience in europe. tom: maria tadeo in brussels. coming up, we will take a deep dive into this historic credit suisse deal in our banking breakdown special edition of "surveillance: early edition" anchored by francine lacqua in zurich. stay with us for that. this is bloomberg. ♪

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