shery: wake up today break australia. i'm haidi stroud-watts in sydney.

annabelle: we are counting down to asia's major market opens. kathleen: i am kathleen hays. top stories this hour. investors are gearing up for another volatile week in the markets as worries over the banking sector persist with haven currencies edging higher in early trading. haidi: minneapolis fed president neel kashkari says recent baked turmoil boosting fears of u.s. recession. kathleen: and credit suisse following an investigation. a quick check on wall street now. another volatile day. the banking crisis continued to dominate. reassuring words from financial regulators in the morning turned a 1% drop in the s&p 500 to a gain of about .6%. green on the screen for stocks into asian trade now. in terms of the bond market and rally, the two-year and ten-year falling in yield. the three-year down to 3.37.

the two-year to 3.77. it's a simple argument. investors are convinced the fed cannot even raise rates one more time this year. there will be 100 basis points of rate cuts as we see the banking crisis damage sentiment and hurt lending and leave the economy leaning possibly more closely towards a recession. the 10 year yield is showing green on the screen again. the new york crude price, an interesting move. up to $69.60 per barrel. the week before crude lost $10 per barrel. regulators are stepping up and reassuring people that they will prevent the banking crisis turmoil from turning into absolute systemic problems for the banking system and confidence is coming back that this will not hit the economy as hard as it might have. as we go into the week, a nice turnaround for crude so far. we will see about the rest of the securities in the days to come.

angela: u.s. stocks eking out a weekly gain not translating to asia. particularly the topics bank index, we saw sentiment return for u.s. banks instead. the state of play. kiwi equities online to the downside here. tracking the bitcoin space, closer to the 28,000 level again. liquidity measures have actually hit a 10 month low now for the biggest digital token. what is driving that is again fallout from the u.s. banking crisis. we are seeing a lot of crypto firms now really cutting off themselves from the digital. now we have movement as a movement in the early session back into more safe haven currencies. the japanese swiss franc are fairly flat in early training. we had seen them bit higher. we are keeping an eye on the bond space this morning, tracking what we see in treasuries.

we will see up to 100 basis points of cuts by the end of the year. shery: we will see if we can square that with what some said bank presidents said friday. today, as you know, haidi, neel kashkari, president of the minneapolis fed was on face a nation and they asked him a lot of questions about the banking crisis. it is sweeping the country. and there are concerns around the world. neel kashkari said it was too early to tell what this will mean for the may meeting. he had knowledged it could tilt the economy towards recession more quickly. let's listen. neel: what is unclear is how much of the banking stresses are leading to a widespread credit crunch. at crunch, just as you said, would then down the economy. this is something we are monitoring very closely. katie: remember, neel kashkari in the last two or three months was the fed bank president that pushed his terminal rate

possibly for the fed from 5.1% to five -- 5.4%. he has not said anything about that. he has opened the door to rethinking depending on how severe the crisis gets and how quickly it abates. haidi: when it comes to the saint louis fed, bullard as well lifted the 2020 three rate forecast a 5.65% on the back of expected stronger growth. the estimate is about the medium, 5.1%. the higher end of what officials have been estimating. he assumes that the financial stress and banking stress we have seen will begin to ease. so, really, james fuller said he raised -- james bullard said he raised the peak for the interest rates this year amid ongoing economic strains and he say is ranking strains will be temporary. kathleen: he want rates up as quickly as they can get to the terminal rate. now let's look at how investors

are closing out a dizzying months with bloomberg's asia fx and rates reporter matthew burgess. on a week that had market jitters, what do you think? it's hard to believe this has calmed down. we have gone from headline to headline, comment comment. what do see now? matthew: that's exactly it, kathleen. you prefaced it perfectly earlier. markets will stay volatile this week, no doubt about it. it seems traders are selling first and asking questions later. there is no doubt about that. risk sentiment will be had. i mean, it has been hit already, no doubt, with russian president vladimir putin announcing he will be put in tactical nukes into belarus over the next couple months. so, you have geopolitical risk coming back into the four. there as well. when it comes to the bond market, we have already seen quite a large move, as you

mentioned, about 100 basis points of cuts priced into the market. those bets will only be bolstered, again, by minneapolis fed president neel kashkari saying that the banking stress that is currently in the u.s. at the moment could lead to a recession sooner than expected. so, traders will launch onto that word, recession. we always know it on that front. that will keep markets nice and volatile for us this coming week. in essence, it is no surprise we are seeing a huge flood into quality and haven assets. the japanese yen and the swiss franc are the best performing currency so far this month. that is likely to continue. when i checked markets right before i came on the tv, they were edging a little higher as well against the u.s. dollar. yeah, this week, more jitters, more fun, more volatility, and more of us on the edge of our seats. haidi: what more can we ask for? the aussie dollar retail sales,

inflation numbers for austria. are the bears waiting to pounce? matthew: they are, definitely. the problem is, they will probably get a little bit burned, i would say, this week. retail sales are out tomorrow. the key one, in my eyes, is the february inflation numbers that come out wednesday. they are expected to show another fourth months of inflation above 7% year on year. then you look at the swap markets. they are saying that the year will be pausing in april with about a 50% chance of the cut in june. if inflation is definitely above 7% there is no way the rb okun pause in april. australian banks are very well-capitalized. we are not seeing the same stresses in australia as the u.s. and europe. for example, that has neel kashkari a little hesitant at the moment. there is no reason at the moment for the rba to be pausing. so, i would expect to see those

pricings pulled out a little bit with a little more positive -- volatility on the aussie front and aussie bond front as well. haidi: matt burgess are asia fx and rates reporter setting up another hectic week for currency traders. a lot of this will be on expectations of continued banking turmoil. credit suisse is facing the threat of a possible investigation and disciplinary action over how top managers ran the bank in the lead up to its collapse. let's bring bloomberg finance editor adam haigh. what are the details that emerged in terms of how we know the top management personnel, what were they doing in their decision-making leading in to those last weeks and days? adam: this has hung over credit suisse not only over the turmoil of the last two weeks but the past two years, how people evaluated how they would redo strategy at the bank, how they would bring back franchises that

had really lost their competitive edge. what has been rooted in this local report coming out over the weekend is essentially that there were some fairly systemic failures by the top managers at credit suisse in various areas. to run you one quote from the finra president that i think is quite telling of the extent of what they are thinking now. "often, it was not clear who was responsible for what. of course, that's weeks to division heads and people running large areas of the business responsible for hundreds of millions of dollars in revenue. if that was the case, that they did not know what they were doing and they did not know who was in the driving seat, and there was a lack of taking responsibility within various business divisions, of course, that is quite telling as to how we got into the position we are in today where, essentially, you had to get a swiss government led bailout and a tie up with ubs.

now, how investors come off the back of this, really, for investors, this is a little too late. of course, everybody wants to know what happened. everybody wants to know more details about specifically what went wrong at credit suisse. kathleen: may be too late for credit suisse. it might be too late for first republic. their stock is down 90% now. what are the possible options viable? that could actually say first republic now? matthew: kathleen, it is still a moving target. there is a sense that the authorities are kind of flipping back and forth with a few different options on the table here. one of the options, of course, is to change or certainly expand the emergency lending facilities available to the bank that will allow them to kind of get the liquidity in the areas that they need and it is a fluid moving target. details are subject to change. as you said, the stock is down 90%.

u one of the points we were making in our reporting for the story is maybe some of the deposit withdrawals started to kind of ease somewhat and it is giving regulators a little bit of hope that they are not dealing with as fragile a situation as they were a week or two ago. is it that chance of a bank run stabilizing somewhat? is that coming back a bit? that might help regulators firm up their decision if that is happening. haidi: going back to svb, i know some bids went into before the friday deadline. could we know something by the end of the weekend? annabelle: it feels --adam: it feels like from our tower we are looking for incremental news here, haidi. but i think it is pretty clear authorities want something done sunday night or certainly very early monday morning. the fdic of course has been in control of the bank now for the best part of two weeks. they have been working with a

number of different parties to try to get a resolution. but, they do want that resolution as soon as possible. it does not really help them to kind of keep this on their balance sheet any longer. it does, at this point, look like the value for citizens are kind of the frontrunners. but, you probably need to keep your eye on the takedown the next few hours late into sunday evening in the u.s. to see if we get another development on this. kathleen: let's go to su keenan with the first word headlines. su: ukraine is calling on the u.n. to counter what it calls a provocative plan by russia to station nuclear weapons in batterers. the foreign ministry says the decision carries criminal intent and undermines nonproliferation efforts. russian president vladimir putin is defending moscow's move saying the u.s. long cap nuclear weapons in the territory of its

european allies. china's vice premier reassured global executives that the country will continue to open up to international businesses. he said at the annual china development form that opening to the outside world is a national policy. he read a message from president xi jinping. to pursue a mutually beneficial opening up. taiwan and honduras ended more than eight decades of diplomatic relations as the central american country says it now recognizes the island as part of china. according to the chinese foreign ministry, china and honduras will establish diplomatic ties effective immediately. taiwan said the decision was regrettable and hurtful and it linked the hundred decision to the promise of chinese financial support. australia's centerleft labor party has taken power in the most populous state, new south wales, ending 12 years of

liberal natural world and a ceiling a left-wing sweep across the mainland. abc reports labor leader chris men's became the 47th premier of new south wales and his party will ran -- will win at least 47 seats given them the majority in the state department. final numbers will be confirmed in global news 24 hours a day on air and on bloomberg quick take the coming days. global news 24 hours a day on air and on bloomberg quick take that's in the coming days. global news 24 hours a day on air and on bloomberg quick take powered by more than 2700 journalists and anaylsts in over 120 countries. haidi: australia's centerleft labor party takes power in new south wales. first, why traditional defensive stocks are not of that -- are now dead. our conversation with hilary kramer is next. this is bloomberg.

>> policy response has been swift and appropriate. i think it will contain the stress. meanwhile, the real economy has been stronger than expected during the first quarter of 20 23. inflation remains too high. kathleen: st. louis fed president james bullard on the central banks fight against inflation. we are watching u.s. core pce inflation data friday. that is see indicator the fed plays the most attention to and rose zero point 4% in february. i -- on wednesday australia's february cpi report is expected to show inflation easing which could support a case for the rba deposit hikes at the april board meeting. chinese data friday will offer insight into the countries come back after covid restrictions

were dropped. bloomberg expects mild acceleration in manufacturing with government construction driving recovery. we are also watching industrial profits from the region coming out in a few hours. other economic data to note is fourth-quarter gdp numbers from the u.s., industrial production numbers from japan and south korea, and a of thailand rate decision haidi:. haidi:we will be on the lookout for chinese bank earnings with investors seeking stable asset quality and strong government support amid spiraling global bank upheaval. bloomberg intelligence says china's central bank cutting lenders reserve ratios and rates could see no more minute pottery -- signal more monetary easing to come and that your week ahead. kathleen: our next guest says fair chair -- fed chair dure powell and janet yellen are eager to avoid financial flow your. hilary kramer is in our new york studio.

hilary, it is ironic to me that the small banks may have lasting damage from this. you are willing to trust citigroup and vfa, but not a regional or small community bank. does that mean investors will just say, that's it? will they still be attractive investments? or will it now more than ever be the era of the biggest banks? hilary: it will be bigger and bigger because we will just see consolidation. the smaller banks will not necessarily fail. even with these reports of close to 200 small regional banks that could have risk. they will be gobbled up. the m&a bankers that handle financial institutions will have some incredible next three months as they merge these banks in. into the big cities in wells fargo and jp morgan. yes, larger banks, that is who all the people are trusting now. this is institutional and individual.

is there anything that regulators at the fed, treasury, etc., should be doing to take extra steps to backup and bolster the community banks that are very foreign for small and medium-sized businesses. it's where people get funding. hilary: absolutely right. first, we will eventually see a total reversal in all of this fear and go back to the era of greed. greed/fear, the tug-of-war you deal with. the banks will eventually do fine. because we know that jay powell has gone from 0% 5% in a little over one year. look, chairman powell will just cut rates and we will see all of those shorts and everyone who realizes the stiff semi concerns -- systemic concerns will all be caught naked and have to cover their shorts and we will see incredible bullishness. we could see a bull market come to fruition as soon as the dust

years and the bank that cannot make it get folded into the bigger ones. i still maintain, janet yellen, chairman powell, they absolutely want to avoid that. they want to be the heroes and they will be the heroes. everyone will forget what happened except for those that are roadkill, that are damaged on the sidelines. it is a shame we are seeing svb and signature having been saved and some really stellar smaller banks doing well. haidi: what do you pick out of the roadkill? where you positioning? i know you say buy the dip when it comes to select names. hilary: we think we will see those that do survive will do well. so if you want to be risky, buy kve, that is the way to go. what we are really waiting for

in addition to the inflation data is going to be april when we see first-quarter earnings. position themselves knowing rates will be slashed. it will come from nowhere. all of a sudden there will be this announcement. insiders of insiders will know. but you will see something like retail stocks, for example, really take off. because, they do well, retailers , which have just been estimated -- been decimated, as soon as rates come down. haidi: tech as well as e-commerce consumer exposed tech. i know etsy is one of your picks. hilary: etsy is one of my favorites. that the consumer to consumer small business to consumer website that will do extremely well because they have been able

to maintain really, the a team in terms of bringing on and maintaining quality. whereas, many other websites in many consumer oriented online hubs are not really doing nearly as well as etsy. etsy is based here in brooklyn in new york. josh silverman is the most amazing ceo and founder. etsy is one you really want to buy. when it comes to tech companies, absolutely, tech is the way to go. because, when rates come down it is just standard finance. you will just see those stocks take off. kathleen: a lot of pain and then some gain, we hope, hilary kramer, thank you for joining us kramer capital research cheap investment -- chief investment officer hilary kramer. more to come on daybreak

australia. this is bloomberg.

haidi: let's look at the set up when it comes to fx. traders bracing for more volatility going into another week. we are seeing haven demand for the likes of the swissie quoted higher in early sydney trading. we see volatility when it comes to demand as thanking concerns globally escalate. inflation as well as other data from retail sales on that side for australia is in focus and we are seeing a little strength still shy of 67 u.s. cents trading for the aussie. the kiwi dollar see marginal strength so far in this part of the session just under 131. i'll are china seen more

resilience when it comes to chinese banks as well as looking at more potential selective easing moves from the pboc. kathleen: let's look at how u.s. futures are doing. a modest gain in u.s. stocks friday. s&p futures now calling -- pointing to an opening gain of .4, nasdaq .3, dow jones .4. there is hope that regulators can contain the banking crisis. there seems to be optimistic sentiment as trading begins. thi 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, with no line activation fees or term contracts... saving you up to 75% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today.

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kathleen: apple ceo tim cook stresses what he calls a symbiotic relationship with china at a time when official ties are significantly strained. cook is one of only a handful of top u.s. executives attending

the usually high-profile china development form in beijing for more, we will bring in our chief north asian correspondent stephen engle in hong kong. the tone of this year's cdf is a little awkward. stephen: it is. we have had three years of covid zero policies and raising trade tensions between china and the u.s. through the trump administration into the biden administration and now with the warm in ukraine and xi jinping coming back from moscow after sharing time with vladimir putin it makes very difficult and awkward positions for in particular u.s. executives going to china, then meeting with chinese officials. some top u.s. executives, perhaps, according to sources, are opting out of the high profile, usually high-profile china development form at the state guest house in beijing. even though, this is the first time in three years it is a fully in person meeting. i think a lot of people are

keeping a low profile. tim cook, though, not taking a low-profile approach. we also had steve schwarzman as well as ray dalio, albert borden of pfizer. they are on the preliminary list of participants. but, tim cook essentially, as you said, stressing the symbiotic relationship that apple has had with china over the last several decades. let's face it. it has been sort of symbiotic. almost all of apple products are made in china. as well as, you know, they kind of rose together over the last few decades. but, those relations -- fraying relations are starting to show. we have seen foxconn, that makes a lot of the products in iphone city, dom joe, they are starting to move that production out of china announcing a $700 million plant in india. other apple product makers in

china are saying they are looking at diversifying their supply chain and capacity outside of china. so, when the giant oil tanker starts changing course, it's hard to back in that direction. three years was a long time. but the strain on the u.s./china relationship has been going for longer than three years. we did get the vice premier speaking of the china development form this weekend. i never remarked yesterday he said opening up, it is a national policy and a mark of modern china and he read a statement from president xi jinping essentially saying the same thing. again, the vice premier spoke at the china development forum. not the premier, and not the president. haidi: there are a lot of reasons we are seeing the beijing/washington relationship fray. does that mean we see the xi jinping president biden phone call pushed back? stephen: all the reasons i have

outlined are the reason for the delay in the call. the u.s. has been urging a call. the national people's congress session of congress has ended and xi jinping is back from moscow. perhaps, mid-march was the target time for them to have another call. they have not talked or met in person since that summit. it was not an official summit, but the meeting on the sidelines of the g20 in bali last november. they have not necessarily so can. the tension and the rhetoric has escalated. we are hearing from sources that china has rebuffed all of those overtures for a call to work through these difficulties on the geopolitical front. we saw xi jinping in moscow. he laid out his diplomatic priorities. that is, at least right now, arm in arm with vladimir putin and that is not play well in a conversation with joe biden, obviously. we will have to see when they can talk again. haidi: now let's get the first

word news with su keenan. su: israeli prime minister benjamin netanyahu fired his defense minister for opposing a contentious plan to reduce the power of the supreme court. he was dismissed 24 hours after making a dramatic speech saying the plan is a threat to national security and should be halted. protesters gathered in support of gelantb while the legislation itself has seen massive support for weeks. credit suisse is facing a possible probe disciplinary action over how top managers ran the bank leading to its collapse. switzerland's banking regulator told a local newspaper the bank had a cultural problem that translated into a lack of accountability. finra president marlene armistead says the regulator is exploring options for the proceedings. bloomberg learned u.s.

authorities are considering an expansion of an emergency landing -- lending facility that would give first republic bank more time to shore up its balance sheet. bloomberg sources also say that regional banks valley national and first citizens bancshares submitted separate bids to acquire silicon valley bank. global news 24 hours a day on air and on bloomberg quick take powered by more than 2700 journalists and anaylsts in over 120 countries. i am su keenan. this is bloomberg. haidi: new south wales elected a labour government over the weekend meaning that now all of mainland australia is covered by the centerleft party. it was around sounding victor y for labor saturday night. what does this tell us about the broad political direction in australia? paul: now all the mainland states and territories as well as the federal government are controlled by the same party. it is only the island state of tasmania that has a liberal

government now. it is the second time in 120 years that this has happened. you would think it means positive see unity but it could cause difficulty for prime minister because now disagreements between the state and federal level will take on the tone of a internal family dispute. the election was supposed to be closed but was not. it was called a few hours before polls closed. the government had been in power for 12 years so it was time for a change. they lost two premieres to corruption investigations as well. as to political direction, this will mean an end to the privatization of assets and to wager caps for civil servant -- wage caps for civil servants and may be the way that election campaigns are done in australia. because, the whole thing was very respectful. both leaders made note of that. perhaps, providing a template for respectful, policy driven campaigns in the future.

kathleen: that would be nice everywhere. the victorious labor premier dan andrews is heading to china tonight. what is the purpose of this? paul: the state of victoria signed up to a couple of belt and road agreements with china that were both torn up in 2021 by the morrison government as australia and chinese relationships plunged. dan andrews is making his first visit to china sent that happened saying the agreements are now in the past. this it's the first visit by an australian politician since the august nuclear submarine deal was agreed. the purpose of it is mainly to look after some trade interests and grow the number of chinese students that study in victoria. this is an important source of revenue for the educational sector as well. dan andrews has been criticized over the transparency of the visit. he is taking no local media with him. any coverage we get will be from chinese state media only.

andrews defended up by saying it is not a picture from a trip. more to come on daybreak asteria. this is bloomberg. -- daybreak australia. this is bloomberg.

kathleen: you are watching

daybreak australia and global markets are poised for another week of volatility as fears around the health of your sn european lenders dominate sentiment. -- u.s. and european leaders -- lenders dominate sentiment. the threat has spread to deutsche bank. is it serious? annabelle: looking at this chart here you can see on friday we saw that stop closing down over 3%. it was earlier off as much as 15%, the biggest drop since the early days of the pandemic. that did spread to other european lenders in europe. there are still concerns around the risk of contagion. what is interesting is the deutsche bank selloff came as the bank announced plans to repurchase debt. that's typically something that would be seen as supportive. analysts are really scratching their heads to explain what exactly drove the move. citibank, citigroup among those saying there was no peer reason for this. it was really down to more of a sentiment move than anything

else another analyst say it is a question of the market selling first and asking questions later. it certainly tells us, at least, that the moved we have seen from regulators, central banks, to try and stem up sentiment in the market still appeared to have a ways to go. haidi: good to be opportunities for other types of lenders? annabelle: some are saying in the market this is the golden age for private sector credit instead. these types of lenders can come in and dictate terms when it becomes more difficult for businesses to access credit for more traditional lenders. this is the view coming through from avenue c mark last week. he spoke to bloomberg earlier and said that faced between the choice of original lender smaller bank under the u.s. versus a big wall street bank, he said the choice is clear. listen. mark: what is the benefit of keeping your money in a smaller

bank? even if that bank is doing extremely well, it is not one of the banks that, in essence, the fed worries about systemic risk. kathleen: former u.s. treasury secretary lawrence summers says regulators should about to support any uninsured deposit in banks that fail and it the coming years. a: policymakers need to be clear and decisive. that depositors are not going to lose their money in large banks, and medium-sized banks, or in small banks. they can do that within their existing authorities simply by being here that -- clear that in the event of failure, given the highly fevered environment with respect to contagion, right now, they are prepared to use

systematic risk exemptions to allow the fbi see -- the fbi seed to pay off depositors with assurance that those funds will come from the banking industry. i think that by doing that, they can contain a significant amount of the pressures that we are facing. and, they need to be clear that that will be there policy over some interim going forward. that is the most important thing they can do to provide confidence. i think that they also need to increase the confidence they are providing in regulation. while it is true that the 2018 trump era legal changes were

passed by congress, were and it almost every respect ill-advised , and, in important respects, were driven by special interest pressure, it is also, i think, clear that they are not the reason why we have had the problems we have had. the problems we have had reflect problems of management at a number of financial institutions and reflect major failures of the supervisory and regulatory paradigm as implemented by the federal reserve. in particular. the failure to do a stress test in 2022 when interest-rates were clearly on an upwards path, the

failure to do any kind of stress test about interest-rate increases manifests a misunderstanding of what a major source of risk in the system was. they need to signal an awareness of duration risk. they need to signal an awareness of solvency as well as liquidity. liquidity issues in the regulatory paradigm going forward. haidi: former u.s. treasury secretary larry summers they're speaking to us earlier. our next guest has been doing policy related banking research at the fed and the university of south carolina. alan bjerga is a professor of banking and finance that joins us now. it's great to have you with us. we have a lot of questions. a lot of them have tree with what happens from here. do we see more bank failures?

do you think this was a failure of regulation, a failure of supervision, or something that played out because of a drop in confidence in market sentiment? allen: all of those things, for sure, without question. we need to look forward to see what we can do. certainly supervisory and regulatory errors. i can imagine a few of them. what i only want to mention the ones we can really do something about. we cannot do something about previous policy errors. interest rates, stress tests, as larry summers says, let's do those now. don't worry about 2023. let's do them now. very easy to do and can be done very quickly. it is much easier than a credit risk stress test. you just need a few numbers for severe risk. short-term interest-rate, long-term interest rates, and

banks should already have the information on how to do this stress test because they do it themselves. why don't we get rid of regulations that allow banks to use accounting rules to hide their losses? that makes no sense at all. these rules should have never been there. it's obvious. let's look forward and get rid of them. that's pretty easy to do. and, we will have to look into the supervisors and what happened there. that is not something we can work with right away. but, let's do everything we can to instill confidence in the banking system. let's do so, also, providing liquidity through the banks. and there is a confidence problem. so, you provide the financing through the discount whether it is facilities. it is very simple. kathleen: right. haidi: you talk about

re-instilling confidence in the banks. obviously, the backstop, even the talk about elevated insurance deposits, which, you know, obviously, treasury secretary ellen has said could happen if we get there. but, that is not a scenario. does set present a moral hazard issue? does that encourage angst, all regulators to do things differently to avoid a similar scenario in the future? allen: for the most part we don't have formal increased positive insurance but we have it more or less for the next year and for the most part, that seems to be working. the banks that have problems are the banks that have other issues for the most part. and, we can deal with those on an individual basis. a blanket deposit insurance for

ever would be a terrible idea. deposit discipline does look -- work in most circumstances. in an emergency situation like this, it is ok that they raised things temporarily. implicitly, it's fine and i would not go further than this at all. kathleen: i have a question that is not about specifically changing the rules. it's about cleaning up the aftermath. small banks, the confidence in them may have been -- i will not necessarily say irreparably damaged, but now, the big banks will get new but -- new deposits, new customers. is there something that can or should be done now to correct that? it was not many small banks fault this happened. allen: i agree. but something has happened over time. that's technology. we know we have social media. we have global banking.

we can go on one of those -- these things and if social media tells me there is a problem at my bank i can withdraw my money immediately. this was not true in the past. we have not fully taken that into account. that means that probably in the future, it will be a problem for small banks. very large banks are too big to fail. nobody will really be worried about them. we all know who they are. but for small banks, it is a reality. i do not really have a solution to it. i don't think anybody has a solution to it. but, rumor will have a bigger effect than the past. technology has done that. kathleen big picture, monetary policy, record unprecedented speed, size, and amount of hikes. many people say, you know the system well. that is a big reason this happened too. should the fed add some sort of rule of its own or mandate to its monetary policy model? allen: the answer is very

clearly no. monetary policy is for inflation , unemployment, economic growth, gdp, things like that. it is not designed to, as a primary goal, to instill financial stability. we have other tools for that. we have supervision, regulation, liquidity provision, things like that. that is what you need. you use the tools you have for the things they are designed for. we have plenty of tools to deal with these. if we had just on supervision correctly, svb would have never happened. no chance of that. if we had not had these accounting rules, that could not have happened. i do not know why the management did not have a risk officer for eight months. but i can't do anything about that now. but us make sure we do a better job at supervision so that is not happen again. some of these things, you know,

we have to look at important things to do. we are in a world where deposit discipline is a little different from where we knew it was before. monetary policy -- of course, if inflation has changed because of the crisis, we can respond to the inflation part, not the stability part. haidi: alan burger -- allen berger thank you so much. turning to bloomberg radio to get in depth from the daybreak team broadcasting live from hong kong. much more is ahead. this is bloomberg.

kathleen: full-year earnings fell last year as covid restriction tinged fuel demand while domestic output of oil and gas came to a record level. china petroleum and chemicals posted net income of $9.6 billion for 20 compared with $10 billion one year earlier. elon musk offered twitter employees new equity grants valuing the company at $20 billion to stem an exodus of talent, the valuation is louth -- less than half of the 40 $4 billion must paid to the social

media platform last year. haidi: let's look at some currencies making moves this morning. monday we see risk off action reflected in the yen. that of course broke through the 130 level we have seen for the first time in about six weeks. the first time since february 10. haven demand reflected when it comes to trading against the u.s. dollar as well. the kiwi and aussie dollar are seeing marginal upside ahead of inflation and retail sales numbers in australia. that's it for daybreak australia. they make -- daybreak: asia is next. this is bloomberg. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done.

♪ kathleen: