hi, everybody. good morning. welcome. you're watching "street signs." i'm louisa bojesen. >> i'm carolin roth. these are your headlines. >> energy stocks fueling a global equity rally after the world's biggest oil producers agree to cut crude output for the first time in eight years. deutsche bank comes out of the doldrums trading higher for a second day as the government refutes a state aid report and mario draghi says the ecb cannot be blamed for the bank's woes. >> if a bank represents a systemic threat for the eurozone, this cannot be because

of low interest rates. has to do with other reasons. >> we will be speaking first on cnbc to the finance minister of austria, as he kicks af a post referendum charm offensive in the uk capital as germany and france make it clear brexit is irreversible. electric is the word at the paris motor show. we speak to carlos ghone as they introduce their new concept car. what a big surprise in yesterday's trading season. no one expected that. nobody thought there would be a deal out of algeria. >> i got it so wrong. i even wrote a piece about it. >> did you? >> saudi sitting on all this production, iran has almost nothing, they are trying to get the sanctions, or back up to the pre-sanction level.

saudi was telling iran we'll cut if you cut, but they did it. >> what are you going to do with your piece? >> was published yesterday. >> oh, no. >> sorry, i got it wrong. >> the world's biggest oil producers have agreed to the first cut to output since the financial crisis. opec members committed to lowering output to 32 million barrels a day. producers will use the formal november meeting in vienna to outline how the cut will be divided across members. iran, a key opponent of previous deals welcomed the agreement. >> to have a very constructive argument in opec means that opec can overcome to the many, many difficult situations. >> yeah. the deal did catch many of us by surprise. wti posted its best daily gains since april. brent rising closer to the $50

mark. it has to be said there are a lot of questions with regards to the actual cut, how will they cut? how will each country be producing after they decide to go ahead with this? also they're not cutting by much, less than a million barrels a day. so people are questioning the long-term validity of the cut. we're looking at the moves in the price of oil. we saw huge jumps yesterday. nymex from $44 a barrel to 47. brent almost up to $49 a barrel. just settling in at these levels. >> that tells you that doubts are creeping in over whether this can be implemented or adhered to. >> yeah. the devil is in the detail. it's november 30th that we'll hear more with regards to how they'll cut. goldman sachs saying they might see some support for crude or we might see it in the near-term, but in the long-term it won't change the outlook. electric vehicles are in focus at the paris motor show

with renault expected to unveil a new car. carlos ghosn spoke about the emission scandal, and he was asked how he can reassure investors. >> first you have two problems which are completely different. the first problem was after the scandal around the volkswagen case, first question is do other carmakers cheat? that's the first question. now the answer coming from france, from germany, from practically all the countries that have been doing inquiry, no other cheating. that's the first question. now the second problem is, okay, so when why do we have discrepancies between the number of emissions that we get for officials compared to the emission in real life driving?

in this case you can have differences from one to five, one to ten, 1 to 15. the question is okay, let's put in regulation. if this becomes a problem, let's put in regulation. this regulation is coming. european commission is being regulating that. let's be clear, this will put a cost -- it will require add technolo technology, which at the end of the day means all the carmakers will be treated in the same way. that's why regulation is so important. if you consider that a certain level of emission is not acceptable, it should be regulated. >> do your current financial forecasts take into those costs? >> the financial forecasts take into consideration the costs what will happen also is what we are seeing is that the consumers are buying less and less diesel because they are seeing that the cost of the diesel is going to go up.

as there is a lot of anticipation it's better to buy another car than diesel, the percentages in europe are going down. for the first time in the first six months, in the industry in general, the diesel percentage went below 50%. not in a balanced way. it's decreasing much faster on the smaller car than on the larger car. >> nancy is at the paris motor show. nancy, we're definitely moving towards this trend. what else is the message? >> very clear here that automakers want to put the diesel scandal that hit volkswagen and the industry behind them one year on with a big push into electric cars. many doubters wonder whether the market demand or lack thereof for electrics meets what the automakers are putting out. you heard from carlos ghosn, we're seeing less in diesels, perhaps that shifts to

electrics, but the automakers face a cost equation, too. that costs money at a time when they're asked to cut costs. one of the costs is the regulatory costs of becoming compliant with emission standards. there is no cheating involved other than with volkswagen, yet regulators are keen to close this gap. there's a large gap in some cases between emissions rules and what the cars get on the real road. there's a study from an independent body transport environment in europe showing on some renault models you're seeing up to 14 times, compared to the diesel engine and what it produces in knox. i said can you explain that? they knows there no deception, you told us that. they want to know how you can be at 10, 14 times above the standard. that continues to have some investor anxiety there. he did say the forecasts are

taking this into consideration in terms of the costs involved. the truth is we don't know what those will be until the eu come the out with the details of those regulatory factors. the other issue is surrounding the sunderland plant, the nissan plant in the uk. sunderland was a big factor in the brexit vote. you may remember it was the shock heard around the country when sunderland voted to exit. that swayed the polls then and swayed the outcome but raises question about the future of jobs at that factory. there's already rumors mulling that given france's interest in the alliance they could push for some of those jobs to come to france. whether or not that becomes more of a possibility in the aftermath of brexit, i asked carlos ghosn, he said we need to know more, what the suggestions look like, but he said there who have to be single market access in order to preserve those jobs. back to you. >> nancy, thank you very much.

back to the oil story. it's been less than 24 hours, but the first critical views have already begun to trickle in. goldman sachs says the agreement may support crude prices in the short-term but will not change the supply outlook much in the longer term. the investment bank says it is not changing its crude forecast to $43 a barrel for the end of this year and $53 a barrel in 2017. let's get another vce from colin smith. is this the big deal that everyone was waiting for? is this the deal that can sustainably bring oil prices higher? >> no we're not quite sure what the deal amounts to. what's surprise being it is that there was any kind of formal deal through an extraordinary meeting which was not on the cards beforehand. the fact that there is a new output target in place of 32.5 million barrels a day, that's a

surprise, but no one knows how deliverable that will be. >> goldman weighing in saying if the output deal is stuck to, the problem is that it will inleash a lot of oil drilling around the world and that means the supply demand imbalance will become skewed again and prices could drop again. how big of a problem is that? >> i think that's probably overstated. it is certainly true that parts of shale look look they can work at $50 a barrel. forecasts show opec outputs increasing next year, but that's working through the inventory of projects that the project already had. the real impact of low prices on exploration and future developments is likely to show up beyond that. i wouldn't overstate the supply risk on the non-opec side an demand continues to be robust. >> colin, good morning. we keep talking about the supply

gut, there's way too much oil on the market. with this agreement, is it the saudis admitting that letting the markets set the price is not working? it's not enough? >> i certainly don't think they would take that view. i think if they are seriously willing to seen up to something, it means more they think their strategy has worked. their objective was to displace high cost oil from the market. in that they have succeeded fairly something cannily. though i wouldn't say they necessarily achieved all of their objectives. as you rightly mention, we have to see whether implementation is delivered or not. >> one of our regular guests from rbc was quoted as saying this is really the new head of opec, that it was him single handedly rescuing the relevance of opec. would you agree with that? >> no, i think the saudi attitude is critical here, going into this it's not clear white what sort of tradeoff the saudis

are willing to go to accommodate iran's demands for rising production. also the risk that you could in the short-term get quite a lot more production out of nigeria an libya. how that will be accommodated remains uncertain. i wouldn't say it is down to the opec head. i do think the fact that the saudis have come into agreement shows they do want to keep opec as a relevant organization. it certainly may amount to a softening of the hard line stance they set out for in 2014. >> is there a sense this deal could be a game changer when it comes to sentiment and positioning in the market and can flush out many of the heavy positions in oil? >> i think it's certainly the start of a change in sentiment. nobody expected a formal deal out of this. this is the first time we've seen some sort of attempt to cut out putin or support prices

since 2008. it's also the first time opec changed its production target since 2011. it could mark a change in sentiment. for the reasons we have been covering, there's likely to be skepticism until we see what's delivered in the market. the other important poeint to make is saudi has increased production throughout the summer. we've seen a similar surge this summer. what happens is that tens to roll off. in the normal course of events we would expect saudi arabian production to draw 400,000 barrels a day and go back down to the levels it was previously this year. i think markets will be focused on whether saudi production stays where it is or starts to go through its usual seasonal decline. >> colin, thank you very much for that. colin smith.

i guess skepticism is the nail of the game today. >> i was tweeting earlier, look, if we could trade, if i'm allowed to place bets -- which i'm not -- i would be buying anything oil related this morning. >> would you? >> for the short-term yeah? for the short-term bounce. >> you would not have done well if you bought physical oil. >> not physical oil, but players. >> yeah. >> looking at the u.s. markets yesterday, the gains coming through. this morning we're seeing higher across the board, and you are seeing outperformance in the oil and gas sector as onebased on t in the states. norway outperforming the rest of the markets by almost 2%. the rest of the markets not all that far behind. coming up, the german finance minister says the im fs f minister says they miust remain

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hi, everybody. welcome back. you're still watching "street signs." just recapping for you the market in europe, we were indicating higher on the open, we hung on to those gains. stoxx 600 up by a percent right now. oil and gas up by 5% right now. >> best day in three months. let's talk about brexit. it is irreversible. that's the view of the french and german government issued in response to suggestions by sarkozy. that he would reverse britain's

planned exit from the eu. speaking earlier this week, the republican presidential candidate said he would travel to berlin and london with a draft of a new eu treaty after getting elected with the aim to keep britain in the union. that seems ambitious. steve spoke to the austrian finance minister who is in town to meet his british counterpart where brexit will be topping the agenda. >> i interesting to get a view of the austrians, they have an understanding and empathy of what britain has in terms of problems, and why it voted for brexit. i spoke to the finance minister of austria, he believes potentially down the line, 10, 20 years time, not as quick as mr. sarkozy, that britain could be back in a reformed and better european union, but he will

speak to phillip hammond, the uk chancellor, and his message is let's get on with it. let's listen to part of that intervie interview. >> you can regret the result of the referendum but you have to accept it. the majority of people in the united kingdom make this decision. it may be an unexpected accident, but it's reality. so it's necessary that we start the procedure of article 50, and also that the united kingdom makes clear what kind of relationship they want with the european union. all the prime ministers and finance ministers said we don't leave europe, we just leave the european union. if you want a contract with the european union, you must make it clear it's a fair balance between rights and obligations. the second thing is it must be

clear that an exit to the single market can only be in the case if you accept the four freedoms of the european union. that's the message we'll give to the minister. >> in terms of what too many people in the british government may be wanting, you think they want the rights without the obligations? do you think mr. fox and mr. johnson underestimated the desire of europe to be more hard on free labor and passporting rights? >> one of the problems will be united kingdom and london especially is very, very strong market in the financial sector. they need the passporting. i think we have to be more creative. we should not go in this direction that the european union states are correct, no negotiations before they start the procedure, and i think the united kingdom has to be in a way where they say let's think

about how we can work together in the future. probably the damage and the disadvantages, brexit is for the united kingdom much intense, more intensive than for the european union. we want to work together. we have to find a way. >> mr. sarkozy is talking about if he becomes the french president, perhaps getting a new eu treaty to allow the british back in. you said the british plight be back in the eu in a couple of decades. do you think there's a reversal in the short-term of brexit? >> we have to accept the referendum. it's not possible -- like for the secretary to say, probably we have another chance to leave, but to remain. that's not the way. if we have all come down to the reality, we will see that it's a disadvantage for all of us. it's not a win-win, it's a lose-lose situation. probably then we can find a way

to bring unite e ed kingdom, br back to the union, probably in another way that is now constructive to the european union. we have also in between the european union a huge discussion about institutions, rights of institutions, who makes the decisions. is it necessary that all decisions are made with a lone wolf or make them another way? there are nine european countries that can make an enhanced corporation, again, we have to accept. it's the democratic will, but i regret, but i would be happy if we find a way first step, good, new contract for the cooperation between european union and great britain. second we have to make clear is it great britain or not? if you think about the referendum, it could be something like from great

britain to smaller great britain. if you look at the votes in scotland also, the corporation in ireland, there could be a way back to the european union. >> that was the us a tree wran finance ministeace austrian finance minister. he said we get too much of the same argument from the same southern european people, whether it's greece or italy on forgiveness. that's not the way forward. two, about the banks as well, he believes the problem for europe and deutsche bank especially is about profitability. i think this is where the crisis lies. i thought telling as well, he said the ecb slowly needs to think about an exit strategy. very slowly. he said nothing to shock the markets, but to start signaling a way out of the current negative rates and quantitative

easing. >> steve, thank you very much. steve sedgwick joining us there. the german finance minister, wolfgang schauble saying the imf must stay active with greece. his remarks after athens passed a reform bill in parliament which could pave the release for 2.8 billion euros in funds as part of its third bailout program. julia is in athens. greece being so close to the third bailout, schauble now urging the imf to not drop the bal ball. >> absolutely remember the germans have to do a lot of work as far as just what primary budget surplus the greeks have been asked to achieve, there's talk about the targets and whether they're realistic. there's so many different angles that are so appropriate for what's going on here in greece, whether it's the ongoing discussions about further debt

relief or greater detail which this government here believes they can tie down before christmas. they're also hoping to get access to the bond buying program, the qe program from the ecb by christmas, too. you have the austrian finance minister saying this shouldn't be the answer. the greeks actually desperate to achieve these things. i spoke in great detail with the economy minister about what's going on with the banks here. not only are they still struggling under a mountain of nonperforming loans and estimated more than 50% of loans nonperforming here in greece, but there's also been apparent tensions between the central bank and the government over the leadership of some of the banks. and then the wife of the central bank's governor's offices were eventually raided. she accused the government of doing that via political motivations. a lot of issues here. when i spoke to the economy minister, i said what's going on here with the banks, what more needs to be done?

>> are complex issues to be resolved. the legislation is there now, concerning the npl's management and establishment of a secondary market. >> why is it being used then? >> i think it's -- it was completed last may. so, practically required three or four months to establish the market. everybody expects prior to christmas the market to be there. on top of this, i think nowadays the banks have a specific timetable to reduce npls by 2018, 2019 by 40%. they have targets. they know which to use, and they think that there are -- on all these complex issues there are certain processes that are

starti starting and everybody will feel confident on this process. >> you also had changes with the executive boards of the banks. and there's been a degree of frustration on behalf of the government with the central bank governor, with him suggesting your choices are not fit and proper, that's right, wasn't it? >> was obviously some different views on specific small bank, that was the case. at the end of the day they were resolved. i think our relationships are excellent and they will remain so. >> are they? >> yes. >> there was a raid on the central bank governor's wife, she said that was politically motivated. is she wrong? >> i think this issue has been

resolved. there was no relation at all. that's an independent process, and has no relation actually with the -- with the role of her husband as a central banker. >> so, just to be clear, the government is not in any way trying to intimidate the central bank governor or force him to resign? >> not at any point. i think we're working very closely. economic ministers, we are working closely with the bank of greece on all the issues, npls an others, on the program itself. so i don't think there is chance of not continuing this cooperation. >> and your message to the european central bank if they're concerned about impingement on the independence of the central bank, what's your message to them? >> my message is straightforward. the independence of the central bank is there, it will be

protected. there's not any level of really making it an issue on the independence of the greek central bank. ecb and the rest are primary factor. and the major agency in the greek program, i don'think there is any creating trouble at this level. >> so that was greece's economy minister saying there are no underlying issues, the relationship with the central bank is excellent. the ecb shouldn't be concerned. but i get a sense it's something that will continue to be watched here. coming up tomorrow, i'll speak to the leader of the opposition, the leader of new democracy who is leading in the polls to get his take of what's going on here and what more he believes the government needs to do. back to you. >> thank you very much for that. we'll go for a quick break. check out world markets live our blog.

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"street signs." i'm carolin roth. >> i'm louisa bojesen. your headlines this morning. energy stocks fuelling a global equity rally after the world's biggest oil producers agree to kit crude output for the first time in eight years. deutsche bank coming out of the doldrums trading higher for a second day. mario draghi says the ecb cannot be blamed for the bank's woes. >> if a bank represents a systemic threat for the eurozone, this cannot be because of low interest rates. has to do with other reasons. >> the advantage and the disadvantages, brexit is for the united kingdom, much intensive than for the european union. >> and electric is the word at the paris motor show as renault's ceo, carlos ghosn

tells cnbc about the long-term impact of the emissions scandal. >> first question is do other carmakers cheat? that's the first question. now the answer coming from france, from germany, from practically all the countries that have been doing inquiry, no other cheating. good morning. if you're just tuning in, here's a quick peek at u.s. futures. let's see if the rally can continue. s&p 500 set to add less than 0.1. the dow jones seen up by 7.5%. the nasdaq at 3.5 points. very timid trading after u.s. markets saw sizable gains yesterday. the dow was up 0.6%. similar gains for the s&p 500. major averages closing around session highs. in european trade, similar risk appetite. the ftse 100, oil and gas heavy,

up by more than 1%. in terms of the sectors, oil producers, the oil and gas play pushing us to the upside. the oil and gas sector up by 5%. the best day in three months for that particular sector. want to show you in terms of the commodity-linked currencies, specifically the canadian dollar which did see the jump to the tune of 1% to the u.s. dollar yesterday. that was the biggest jump in about one month's time. the big winner, that was the norwegian krona at a five-month high against the u.s. dollar. back to deutsche bank. shares have extended yesterday's gains. this happens after the german government denied a newspaper report claiming that the state was working with the financial authorities to prepare possible steps to ease pressure on the lender. however, don't blame deutsche bank's woes on the ecb. that's the view of mario draghi who was forced to defend the

bank's low rate policy among criticism that it was adding pain to germany's largest lender. he also responded to a question on whether germany should use some of its additional fiscal headroom. >> i would like to ask you a question whether you have been tackling also the question of whether germany should spend more money, use as we call it the fiscal space, and how this discussion went with the lawmakers. >> i did say in the last press conference that countries that have fiscal space should use it. germany does have fiscal space. now, however we have to be nuanced about this. germany is also close to full employment. so, if there is fiscal space for some fiscal expansion it should be carefully targeted. i never argued for irresponsible fiscal expansion.

this would not feed with the view of the world that we have at the ecb, would not feed with the interpretation of the growth rules, and so that is what we meant by that. looking at breaking news from the other big german lender, it looks like they're warning of a profit in the third quarter. the board of managing directors presented a strategy and financial objectives for 2020 to the supervisory board and that has been made public by the news wires. they do see a third quarter net loss. the core t1 ratio will be higher in the third quarter of 2016 than the previous quarter, despite writeoffs. commerzbank is expecting a small net profit for 2016 as a whole. new jobs will be created in the area of business growth, but also outlining how the total

jobs will be -- they're cutting 9,600 full-time jobs. they are expecting to see a core capital ratio of at least 8%. once again, let's get out for some commentary. a lot of commentary coming through here. what do you make of this? there's been speculation in the press of late about the job cuts. >> actually what we are now hearing from commerzbank is the confirmation of what had been in the press, what we have been reporting also first here at cnbc, that they're shedding almost 45%% of the work force, 9,000 jobs. it's like 20% of them. also, i mean, i think the most

interesting fact is also that they're overhauling the whole structure of the bank. the structure of the bank actually worked pretty well during all these years. now what they are doing is to really cut down the weight or cut away the weight of the invei inve investment banking, splitting certain banks doing work with the corporate sector. this bank will be split, or this unit will be split into half so that only the big clients will sit in it, the smaller clients will go to private clients, whereas the investment banking will be shrunk to a small size. that's the big plan for commerzbank now. what we are hearing right now. that's all down to the low profitability we are talking about all the time, the german banking sector. there's no interest rate margin anymore for the lender.

there's also no vision where to head with all these costs. they still have on their books. investment banking is an expensive business because you want to have good people also working in your invest. bank which costs money. that's a big detour here from commerzbank. to be in a way also an invest. bank and universal bank that is it, i would say. for the moment, i would say that's all question have. i don't really know what the market reaction is. carol >> markets are extending gains, up 1.1% for commerzbank at session highs. they say they will seize dividend payments for the time being. and they say the net job cuts amount to 7,300. they're cutting many jobs, more than 9,000, but also adding new jobs and new businesses. they see revamp costs of 1.1 billion euros. just want to get out to you for

a quick comment here. commerzbank slashing the dividend, deutsche bank is not paying a dividend. what's the investment case for german banks now if neither of the big two is paying a dividend? >> that's true. the investment case can only be that you think the shares have fallen to a level that they probably wouldn't fall further. i guess that's the only investment case that you're banking on a recovery in the share price. looking at booth banks close to record lows, but then you have to think there will be no more bailout, because then your low share price can get diluted further. for the case of commerzbank, probably a capital rise is not really on the horizon. they have been through a couple of rounds of capital rises in the past. also interestingly, i think it

s on one year now that they have paid a dividend. i think share hoholders of commerzbank are very loyal, because they've been through years of pain already. the sad thing is people thought that now it's getting better for the lender. but effectively for shareholders, i think the dire time is not over. looking at those announcements today. >> thank you very much for that. anthony doyle is with us. anthony, let's link in what we're hearing with regard to the german banks to what we heard from mario draghi from the ecb saying it's not our fault that the banks are in these dire strai straits, even if we have to push through with these negative interest rates it was necessary to restore growth and inflation what are your thoughts? >> clearly the ecb has two mandates. the primary mandate is price

stability. close to 2%. it keeps an eye on financial stability. that is a concern that you have a large systemically important bank that the share price has fallen to the degree that it has. but that said, it's primary target is that inflation target. the primary goal is growth within eurozone. so it will take measures to try to achieve those targets. there will be ramifications, but i don't envision the deposit rate falling much lower given the impact on bank profitability. >> fixed interest is your area. when you look at what the ecb is doing, corporate bond buying in particular, do you think we'll be up against the wall at the end of the year with regards to what's available for the ecb to buy and how will that impact the bond markets in particular in areas like germany? there's speculation they might have to up the bond buying market there. >> definitely. i think we'll see at the december meeting is the ecb

tinkering a bit with the capital key. also the deposit floor, also looking at the available of eligible securities for that quantitative easing program. we will see an expansion of those measures in december. >> the opec cut is good news for central banks, isn't it? it drives up inflation. they have to worry less about extra stimulus measures to bring inflation up. today central bankers around the world, are they cheering this? >> well, i wouldn't say they're cheering it. there's two impacts. one on headline inflation, also one on consumers. their ability to spend which is also important in terms of generating economic growth. central bankers are throwing everything at trying to generate some sort of inflation from japan to europe, but it's not so much of an issue in the u.s. and uk. it's definitely good for perhaps japan and europe. an agreement on the opec production levels. but inflation is quite high in the u.s.

core pc inflation of 1.6%, arguably they should be hiking rates. >> what are you buying at this point in time? do you like government bonds? >> no. don't particularly like government bonds. >> we've seen a comeback over the last two weeks. you don't want to miss out on these comebacks. >> you take duration risk in owning government bonds. if you look at the german bund, negative yields. japan, jgb, zero percent. they're not attractive on relative basis. >> you say we're dangerously close to a deflationary environment in europe. are we really? it doesn't feel that way in terms of market behavior. >> inflation is 0.2% year on year. so we're pretty close to that zero deflationary type level. what we are seeing is the european economy still

struggling, whether it's the banking sector, high unemployment rates. so i can see why the ecb is embarking on these unconventi unconventional policy measures which are now becoming conventional across the developed world. >> technically we are at 0.2, remember when we were talking about deflation is around the corner. it was such a talking point and it isn't at the moment. >> yeah, what you really want to see, the reason they're undertaking quantitative easing is hopefully they'll put the rights that consumers can borrow at with housing and cars, we've yet to see that in europe. >> anthony doyle, thank you very much. a big overhaul over at commerzbank, the second biggest lender in germany. widely speculated about. just want to bring you some headlines. the business will be focused in

two segments, private and small business and corporate clients. they will digitalize 80% of relevant processes. the net result will be negative in the third quarter. commerzbank is expecting a small net profit despite this for 2016 as a whole. last but not least cutting more than 9,000 jobs. all right. after the short break, we'll talk a lot more about the banking sector. we'll hear plenty more from the austrian finance minister. h.

welcome back. you're still watching "street signs." central bank heads in the u.s. and europe have been forced to defend themselves against criticism of their role in the issues surrounding their embattled lenders. now, across the atlantic in

testimony before the house financial services committee, fed chair janet yellen was quizzed on wells fargo's retail sales malpractices. she was asked what she's doing to prevent this from happening again. >> we have already instituted a review of all of the largest banking organizations because we are very concerned with all of the compliance problems. >> steve spoke to the austrian finance minister about the european banks. >> he understands, he gets the fact that britts are part of europe. he said he sees a scenario at some stage down the line when europe has better institutions. actually he predicted britain will come back into the eu. but what kind of events happen in the meantime remains to be seen. we also talked about the banks, and the crisis in europe's banks and germany's banks.

i wonder if this is one of the bigger points of contention and concern about the whole european problem. let's listen in to what hans jorg schelling had to say. >> i don't think we have a bank crisis. we have a profitability crisis of the banks, to be resistant against shocks you have to make more profit. that's a common opinion from the imf, from the world bank, from the ocp and everybody. it is the same discussion we had when asked if we had a you'euro crisis. we have problems, one of them is greece, but it's going up. one of them probably is italy, they take the nonperforming loans out. of course austria has had problems with the banks. we are just winding down one of them.

that's -- we have to make clear that the financial markets are acting, and the financial markets are able to get access to the market. >> we're overbanked and we have to let banks ma s make money. is that a question or issue for regulators? we have run loads of stress tests on the banks, a lot seem to pass on a regular basis. but there is still a concern about being overbanked. about the profitability, was there a subtle reference there to the ecb? the banking supervisor, the one who has the ratios up, the one that the banking sector says we have this heavy regulations, you expect us to try to make money and zero interest rates as well in terms of the latter point about the ecb, and what it's doing to help the banks, i asked him was there a time coming soon when we needed to see a reversal of policy from the erb? whether it's on quantitative easing or negative rates.

>> one of the questions we have to discuss is is it possible to make politics without a better cooperation and a deeper cooperation between the european union. if you have no exxon strategy for the economy and for growth, if only the fiscal part t will not be successful. second point is i think the ecb started too late. probably the question of quantitative easing was too late. in the united states we stopped it and started. and the two aims of the central bank, i think they are to the reached. one of them is inflation rate. we have the lowest inflation rate. some countries trust on the level to deflation, so they don't reach this. the reason is normally, you know, if you bring more money to the market, inflation rate is going up. why is it not going up? the positions, give me your bond, i give you cash. that's one of the reasons that ecb is not in this way successful and it is criticized

by the finance ministers. ecb is totally independent and you can't give some advice, some suggestions, some proposals but they have to make them. >> interesting. you're independent, we're not telling you what to do, we're just suggest ing that you were late to the party, but we're not saying too much because you're independent. mr. draghi is saying start spending money on valuable infrastructure projects. >> these days it seems fashionable to blame the ecb the central banks for everything that is going on. there's so much other stuff going wrong at the banks. we're looking at low profitability. that has nothing to do with the ecb's policies. looking at low capital ratio. that has nothing to do with the ecb. i guess the ecb must be frustrated for feeling so much criticism. >> yes, but would you say they

have nothing to do with the ecb? for instance, if we had less bank -- let me say, if we had a harder regulator, less banks, we had a clear out, quicker rather than later, would we still be having the same profitability problems? still having the same net interest margin problems? i take what you're saying, you're right, you cannot blame the ecb for everything going on, but can you maybe turn it on its head and say the ecb needs to be tougher with some peripheral banks? get rid of some banks or let them fail so we can rebuild a better banking sector? >> a lot of banks have to remember where they would be if the ecb had not stepped in as a back stop. is it a good or bad thing now versus five years ago. some say german banks are feeling the heat. four years back germany was critical of the spanish banking issue, now it's on the different

foot. which brings up are the spain issues different when you look at the savers in core europe versus the outskirts. >> it was different. with the spanish banking system we looked at the amount of npls in the system, similar to the i italian banks. >> delicious point here, i say delicious, not that i'm excited but a worrysome point of view, if the german banks needed some form of state support, this is the topic du jour, does that mean germany has to take on some of the conditionality that european banks have had? germany goes in to help out deutsche bank, commerzbank, do

they knead the same strenuous rules that other banks have had when they were bailed in? that was a freudian slip. bailing, can you imagimaimagine depositors? you spent so much time on the bail-in story. can you imagine that? >> i cannot, especially a year before federal elections. angela merkel cannot go to the polls with that happening. that's a no go politically. >> yeah. >> the other thing, just with the restructuring we're seeing, the commerzbank restructuring, these measures of cutting jobs, they had many years now since the financial crisis to get their hows in order. we've had the stress tests time and time and time again. every time the stress test measures, the banks do what they need to do to get on top of things, should they have been further ahead of the curve in restrict sur

restructuring? >> zombies. from 2008 to 2012, that's all we talked about, zombie loans on the books. bad property assets in spain. how much of that is still there on the balance sheets which are inflated? >> do you want a regular slot on the show? feel free to come on. >> you'll never get rid of me. a bit of a sigh of relief. >> no, no. >> 9:45 every day, steve. let's look at the european equity markets. it's all about opec and oil and ga gas producers the sizable gains across the board. >> the oil sector higher by 5%, basic resources riding on the back of the commodity uptick that we're seeing in oil. that is it for today's show. i'm louisa bojesen. >> i'm carolin roth. "worldwide exchange" is up next. n a 1% difference in reliability of each other. and, sprint saves you 50% on most current national carrier rates. save money on your phone bill, invest it in your small business. wouldn't you love more customers?

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good morning. crude realities. opec reaches an historic deal to cut production, is the devil in the detail? >> mr. stumpf goes back to washington. the wells fargo ceo set to face another grilling from lawmakers about his bank's sales practices. and your money your vote. a new poll this morning on who voters say won the first presidential debate. it's thursday september 29, 2016. "worldwide exchange" begins right now. ♪