bank. we'll be speaking to bankers and financial experts and will be looking at the figures and asking about old burdens and new risks. and. this is the management floor on the thirty sixth story high above frankfurt you can see a long way from here from the top of the well down there looks pretty small. bank has more than one hundred thousand employees in sixty one countries it's a huge company with more than thirteen hundred subsidiaries and assets worth one point six trillion euros. which makes it sound like it's the government you have to be told no it's not that but it's the german stability they've been in it for one hundred years you can easily assume that whatever they do is right but you have to reflect that it's always different people since july twenty fifteen the top dog here has been john cryan he came into a hole the bank he's british rational and modest with a subtle sense of irony every tuesday the members of the board gather here frankfurt thirty fourth floor bug proof the

it wants to inject funds into those banks. they wa nt to inject funds into those banks.e the money in three ways. most will come from selling bonds. indian banks are flush with cash after a ban on almost 90% of cash after a ban on almost 90% of cash last year. they want to buy bonds using that money and then it will put cash back into the banks. this will improve their balance sheets, allowing them to lend more money and make profit. the rest of the money will come from selling sta kes the money will come from selling stakes in the banks and the treasury. but many say instead of a bailout would really need to be done is to reform the banks to make them more efficient in things like lending. if that is not done, the government may have to dive into its savings once more to rescue the banks again. india's banking sector is going through a turbulent time with rising bad loans and pressure to cut costs. private banks are adopting processes which have led to job losses. we caught up with the ceo of one of the largest banks in india and ask about the 1000 job losses in icici.

bank since 2001. insiders of deutsche bank had gotten $71 billion of euros in bonuses. it has been a bonanza for the insiders. they have made out like bandits. shareholders, not so well. they give. mr. wallison: we have been debating this for years. the way it was phrased was that the banks sold these mortgages back securities around the world. a were bought, -- they were bought around the world. why were they bought around the road? the policy in the united states caused a gigantic bubble. that was far beyond any we had in the past. what was happening in the bubble is that people were taking out mortgages with good high rates on them. the banks were willing to lend to them. no cousin there were defaults. there were never any defaults, or very few, when there is a can't because everyone refinance in the united states without any problem. you never see defaults. see high rates. people in europe and around the world wanted these obligations. so the banks were running out of the available mortgages as th

teams and banks. this process is not predescriptive, but it helps bring to light important issues such as the sustainability of banks' business models in a low rate environment and their operating costs in comparison with their peers let me conclude. now three years into the life of the european banking supervisor and the track record so far is encourageaging those the single supervisor is still a young and developing institution, it has in many ways lived up to the high expectations that accompanied its fan. rigorous and uniform supervisor has led to high levels of capital and a more resilient sector overall the credit risk of banks is now less determined by the credit risk of their country of establishment. let me just incidentally thank all the staff of the -- the fantastic work they've done in the last three years it's things that if you go back with hindsight, it would be unthinkable three years ago. so i think we all owe a debt of gratitude to them. healthier banks have in turn helps helped tran

banking system is in good health.g monetary policy, the bank of england should feel more confident about doing that. the banks to perform better in that environment. that is what they're looking for. it is sort of the chicken and the big -- chicken and the egg. we could see a scenario where banks invest in the economy at a time when we should be welcoming and encouraging investment. , coming back to by bank, do i see an impact the end of this year? absolutely. the size of is, that change. when we have done analysis, we say look at london, london is interesting. as a fairly big property owner across london property, we have a number of sectors in good health. a number of service sectors cannot get enough space, whereas the city is clearly a challenge. ultimately, if we get clarity on passporting, the u.k. economy will be fine. guy: let's talk about the u.k. economy. it looks like it is having a consumer wobble. consumer credit, and the governor talked about it this morning, is a pocket of concern. the banks are clearly

, particularly american banks and german banks that's just the way it is.e have to be super efficient to accommodate a low growth market. we could be competitive versus how we were. i think we've all changed our business models. we were making profits ten years ago in ways that were not sustainable. that was proven to be the case we changed our business models probably the most interesting one, the one we spend most time is can we be competitive against companies that are not banks can we be competitive in payments ver versus companies t purport to make payments but are not regulated. can we be competitive against parabanks or credit institutions not regulated. can we ultimately be competitive in even taking deposits, which is the core reason why banks are regulated. against the likes of starbucks, which takes a huge volume of deposits, it just doesn't look as though they're taking deposits because they're taking prepayments. can we be competitive against technology companies in a world that's becoming more and more based on smart technology. when i think o

we are actually a bank. people have said you guys are like a bank with a brain, or a university with a lending arm. we are both of those things. i have 3000 phd's who work at the bank, the smartest people i have met in my life. it is a living, breathing, kind of an academic institution, but it is also a bank. the first rule of any bank is you have to have a diversity of investments. if we were to get outs of middle income countries, and some people say you should only work in fragile and conflict states, but if we did that, our aaa rating would no longer be a aaa rating. there is genius to 70 years of putting this institution together. it is a combination of less risky investments with very risky investments. we are not being asked to do riskier investments, but in order for us to do that, we have to have balance. more importantly, middle income countries is where the 70 plus percent of the extreme poor live. just because of their size. if we were to neglect metalico -- middle income countries, we would have

the japanese central bank, european central bank, german central bank, many of these banks have negative interest rate bonds. another $24 trillion in very low yielding government securities and $5 trillion in cash. all of these holders of capital are waiting for higher returns and we think that we can create situations where they can get higher returns and we can achieve development goals. we feel that the only chance we have to meet the exploding aspirations of people over the world is to use these market-based approaches to development. when it came time to replace -- replenish our ida fund. a 40 year loan is not a sustainable business proposition unless countries donate every three years. what we did at our last replenishment was we got a rating and now we can borrow from capital markets with the equity that sits in ida. we were able to increase resources for africa and the poorest countries by 50%. the second pillar of our strategy is to build resilience to overlapping shocks in crises. we are funding countries by finding new ways to share risk with the capital market. i am a medical

india banks are flush with cash after a banks are flush with cash after a ban on 90% of bank notes lastd they will flush that back into the banks. that will improve the banks' balance sheets and that will allow them to make profits. it will come from the treasury. many say is that of a bailout, what really needs to be done is reformed the banks to make them more efficient in things they can lending. if that is not done, the government may have two dive into a savings once more. to rescue the banks again. now let's brief you some other business stories. american airlines is facing a shortage of pilots over christmas — after a computer glitch gave too many of them time off. an estimated 15,000 flights don't have an assigned pilot due to the software error. pilots are now being offered more money to cancel their holiday plans and work the shifts — american says it expects to avoid cancellations. google is being taken to court, accused of collecting the personal data of millions of users, in the first mass legal action of its kind in the uk. it focuses on allegations that google unlawfully

financials of banks. and i can clearly tell you the banking sector came out of those reforms in november of 2016 on solid ground we have a strong regulator, they are overtight on regulation. i cantell you that now we are in the phase of implementing basel iii, that will be implemented next year, 2018. we have up-to-date on regulatory side and they're careful with what's happening in the banking sector all banks ended up on solid ground complying now talking about the future investment, very investor who comes, they come looking for financing. the banking sector in egypt is very liquid. loans to deposits less than 50%. that gives banks ample room to finance new projects >> we heard earlier from bill winters about the changing face of banking globally and in developing markets and how important fintech would be to that an accessing new customers is a bank like yours in a country like egypt able to find these new customers who are not currently banked >> egypt started very good plans for what you call the fi

the world bank might be described as the biggest community bank on the planet. it involves projects targeting community and local levels. projects like alleviating poverty and helping women con the economic ladder and those focusing on improving the health of people in the developing world. this is the work of the world bank. speaker holds a phd in a topology and is also a physician. he was born in seoul, south korea but spent most of his childhood growing up in iowa. he was courted back of his high school football team. hailing from a family of high achievers, his father taught dentistry and his mother got a phd in philosophy. he restored yesterday discuss the bank outlook for the world economy and some of the key projects and goals that has for 2018 and beyond. dr. kim began his first term as world bank president 2012, was reappointed in september 2016 to a second five-year term. the world bank is comprised of five institutions provided both funding and technical assistance for reducing poverty and boosting prosperity around the world. effort. ambitious dr. ki

thee even on the basis of banks -- backing shops -- banking shops. , foror example -- in i.t.xample, do not think they would cool operate to save money. do not think we are seeing the beginning of concrete merger talks and do not think that the investment of cerberus is the start signal for something very concrete. maybe it is only a bet on the future of cerberus. it is clear that german banks have to consolidate. it is clear that deutsche bank has its own problems as well as commerzbank. they are turnaround candidates. it seems to me that cerberus is betting on the future, more than being the starting point of concrete merger talks. mark: we are just hearing from john cryan. he spoke at a ubs conference. we are getting his recording of those comments. the ipo of the asset management unit could be late first quarter of 2018. " we reported that various big shareholders are losing patience with john cryan. cryan is not john on borrowed time. how much longer does he have? give us a time he has to turn the company around. >> if i could give you the to gete time he has left turnaro

and banks. layman's failure generated a run on the money market funds, but they quickly spread to all short-term funding in the financial system, including commercial paper issued by non-financials and funding major investment banks and banks. creatingesponded by consolidation under the desert acts that led to these institutions. the fdic raised insurance $250,000om $100,000 to and to demand accounts so crucial to the payment system. it also guaranteed senior debt and depositing of institutions, further assuring their access to funding. the treasury used exchange stabilization funds to guarantee money market funds and helped congress refuse capital injections into the banks. these measures stopped the aftermath, in the there was criticism of bailing out wall street and propagating moral hazard. i do not regard the use of a lender of last resort, where there is collateral when needed, and a penalty rate as a bailout. no dual -- nor do i regard deposit insurance as a bailout. both are clearly gove

. >>> no british bank needs to raise more capital, that's according to the bank of england which says lenders could handle a hard brexit. >> given the current levels of resilience, uk banks could continue to support the real economy, even in the event of a disorderly exit from the european union. >>> shell cancels an austerity script dividend policy and issued a bullish cash forecast sending shares higher. >>> ocado shares spike as the online retailer offers a tie up to grow its e-commerce business. >>> and socgen says it will close about 15% of its banks as the french bank looks to cut costs. we'll speak to the cfo at 14:00 cet. >>> the uk's largest lenders passed stress testing with flying colors. the bank of england indicated none of the banks it tested needed to raise additional capital. rbs and barclays who fell short last year boosted capital to a sufficient level the bank of england also said banks could withstand a disorderly brexit, but governor mark carney hoped for a transition agreement soon. >> the time of achieving a transition agreement, the sooner the better i won't pu

and community banks. so this is something that we strive to achieve. we're taking a fresh look at that right now. i would just point out a couple of areas, i think certainly in capital we require the largest banks, higher capital. and we have a less stringent requirements as a look at and more simple requirements as we'll get out also point to something like the volcker rule where really it can apply in its most, and his strongest form to the banks in a very large trading books and much less stringently we believe as we go to the smaller banks. in fact, i saw that your proposed bill extends banks under 10 billion in assets from the volckery, rule, which is something that we have been in favor of. >> thank you. actually, my next question is on that bill. as you just pointed out two weeks ago 20 you senators introduce the economic growth regulatory relief and consumer protection act. an open ask you to get into the business of theas politics of tt actha with us, , but i do want o know, deeply if you've had

nejra: we will see banks come well out of it and other banks that won't.eally start to see that difference in the marketplace in europe? ed: most experts who are looking at the marketplace, you will see a separation of those banks that are really out in front on this, trying to provide the best mobile banking app for their customers, allowing their customers to aggregate their financial needs in one place, and realizing they have to do that to keep their customers. then, you will have laggards. you will have other financial institutions that don't really want to do this, spend the money, form the innovation teams that have to put this together. you will see separation. nejra: does brexit factor into this? ed: no. ironically enough, it is the u.k. setting the pace on what is called generally open banking. the u.k. has created an open banking initiative which will standardize the way banks share all of their data. the other countries in the eu are catching up. the u.k. has bought into this and helped lead it. so, no, it will not be withdrawing from psd2 as a

bank commissions and advocacy rubes in the bank communities. what will you do to in increased diversity -- to increase diversity of the labor force and the federal reserve system? i am a big supporter of the federal reserve system and diversity. i think we make better decisions when we have diverse voices around the table. that is something we are very committed to at the federal reserve, but that the order of governors and the reserve banks. board oft the governors and the reserve banks. this is something people have been working on for decades. you begin to see what works. my view of what works is, a lot of private companies have been asked -- have been successful in advancing diversity. what seems to work as having a holistic plan to stick to overtime. it is about recruiting and bringing people in. once in, it is not given paths to success. it is about having a culture and company that is focused with adversity and sticks with that overtime. it is not something you can do overnight. you mentioned the reserve bank presidents, i assure you we

if you take a look at what the bank is doing -- the bank of canada is doing, the fed, the boe, are we central-bank convergence or diversions? david k.: it may be a little bit of diversions for some time. it will take longer for the ecb to get going and longer for the bank of japan to get going. over the course of 2018 we see the emergence that over the longer term we will see re-convergence. in the long run we think the dollar will come down and one of the reasons is eventually these diverting central banks will converge again. jonathan: in the next 12 months if they hike it is said they will have to cut. do you believe that? david k.: i would bet the other way. if the global economy is this good, unless there is a shock to the british economy i do not think it will go into recession. central banks have sort of given up on the way to getting inflation back to target. what is going to cause the next recession? prices riseg asset because of this low level of real interest rates and that is the biggest threat to the global economy. i think the fed is deliberately saying, we are going to

it's really a bank heist. it's designed to deliver trillions of dollars to the richest 1% of americans while doing virtually nothing for the middle class and absolutely nothing for the bottom third of americans. doesn't there seem something wrong in a we the people democratic republic to have a bill on the floor that is a bank heist on the federal treasury to deliver benefits, trillions of dollars to the richest americans and we can't have a debate on this floor on health care for the poorest children in america? well, certainly i think it's a perversion of the principle of a government serves the people, to put the privileged and powerful ahead in line. we have seen certainly many renditions of this, including a broader bill, a set of bills, the trumpcare zombie health care bill. it came to the floor and was going to wipe out health care for 2 million americans. then it came back in a different form. it was kind of the fake insurance form. understand and it was defeated again and then it came back as the skin

lots of coverage of the bank of england.e will run you through the details of what is happening there. television extensive live coverage of president trump's announcement of the next fed chair at 7:00 p.m. decay time. less common a host of former fed presidents joining us including gary stern from many annapolis. we will get a sense of what is going on and how we should read this story. next, will today see the first hike in u.k. rates since the summer of 2007? we will bring to the latest as the boe decides. this is bloomberg. ♪ ♪ 47 minutes past the home. let's get a business flash with juliette saly. wealthcredit suisse management has propelled assets under management. -- we seem to have lost that. i might drop back to you, guy. guy: thank you, juliette. let's hear what -- has to say about these numbers right now. clearly let's pivot to wealth management -- this pivot to wealth management is helping out and he says the bank is well-positioned for the next crisis. he is concerned about what is happening in financial market

nejra: we will see banks come well out of it and other banks that won't.eally start to see that difference in the marketplace in europe? ed: yes. most experts who are looking at the marketplace, you will see a separation of those banks that are really out in front on this, trying to provide the best mobile banking app for their customers, allowing their customers to kind of aggregate all of their financial needs in one place, and realizing they have to do that to keep their customers. but then you will have laggards. you will have other financial institutions that don't really want to do this, they don't want to spend the money, they don't want to form the innovation teams that they need to put this together. you will see separation. nejra: does brexit matter in all this? ed: no. ironically enough, it is the u.k. setting the pace on what is called, generally, open banking. the u.k. has created an open-banking initiative, which will standardize the way banks will share their data, with apple and so forth. and the other countries in the eu are catching up. t

are highly dependent on banks. their options are limited when it comes to success in market finance. while these small loans spring between vulnerable and more resilient countries has now mayor out to a record low of five basis points. pricelow even created p that has been crucial for the broadening of economic and employment recovery. it employs a 70% of the labor force. the second way in which stronger supervision has supported our monetary policy is by helping contain any financial stability risk that may emerge during a long period of low rates. one channel through which that risk can appear is the search for yield effects. low rates can induce banks into making lower quality loans, leading to higher loan losses. but with a strong supervisor ensuring well-capitalized banks, the quality of lending tends to be higher. this is confirmed by looking at low level data in spain, which finds that when overnight rates fall, highly capitalized banks grant fewer loan applications to risky firms than lowly capitalized bank

central bank.redibility test, the governor has laid the groundwork for a hike many times, but will he take action today? if he does, will it be the first increase in a decade? the u.k. resigns: secretary becomes the first the sexualasualty of harassment scandals engulfing westminster. ♪ >> meanwhile, bloomberg daybreak: europe -- is right here. . i'm manus cranny. >> i'm anna edwards. reporting numbers strong -- the outlook is being maintained by the business. in terms of how they performed against this comment 9.5 billion, in line with the six billion pounds. 1.1 billion is adjusted for the second quarter, against 1.8. the president says to make sure that the president -- that their structuring initiative is on track. italy, a scandal in slower business unit with the government and big businesses counting back. perhaps this is an outlook maintained, good news for the meeting. >> futures at the moment indicated slippage. the big test for the market -- will he be confirmed a little bit later on toda

we have the banks that -- sen. kennedy: please forgive me for interrupting, but we are limited strictly to five minutes. i understand what we have done, but i want to ask you again -- and we still have banks that are too big to fail in america? mr. powell: i would say no. sen. kennedy: i want to ask you about, in 1991, governor, you were working for the treasury department. by the way, while we are on that subject, what role did secretary mnuchin have in making decisions if you are confirmed? mr. powell: he would have no role. sen. kennedy: none? mr. powell: i cannot think of any. sen. kennedy: zero, nada? ok, in 1991 while working at treasury, you dealt with the collapse of the bank of new england. you prevented a bank run. you decided to guarantee all deposits. how many of the bankers went to jail? mr. powell: there was some jail-going. i cannot put a number on it for you. sen. kennedy: in that same year, while you were treasury, there was an option rate bond big bid rigging scandal. do you remember that? mr. pow

paul: there are some risks involved. >> the big risk at the bank is bank what will be uncovered. been looking for things that could be embarrassing to them and they have self-reported a number of issues, but you never know when a commission that can subpoena witnesses what they will find. betty: it is always a relief for them, right? it has been weighing on the sector for quite some time. >> yes, it has. it has been a drum roll going on and on in the background. does give the banks and the government as well a 12 month inquiry, sir relatively short. give some certainty and hold out the possibility they can put some of these issues behind them. betty: thank you so much. sector.ustrian banking some headlines coming in. several vacancies on the board of fed governors. nominated toriend be another fed governor. several vacancies on the board of governors, and yet another name being put into contention on the fed. plenty of vacancies to fill it we will be keeping an eye on that story. coming up, north korea facing further sanctions after its latest missile launch. we will look at what

four insolvent banks four insolvent banks keep them from declaring insolvency because we're aristocrats and we don't cue to the law we don't need to participate in society because margaret thatcher so there is no society so we're for big banks in the u.k. and we don't have to obey the law and even though we're sitting on hundreds of billions of pounds of payable debt we just got the money from mark carney in the bank of england who would like the free money and now they went breaks it and the like. and now they're going to have to declare insolvency they're going to need i.m.f. money within five years in the u.k. i predict i predict within five years they're going to bail out because they're so stupid they've got a little a little georgie guy i am cured you. make him the chairman of the bank of england and you have the same results as having some dirtbag like mark carney. ok so they were remarkable things i'm going to talk to you about this was the first interest rate rise in ten years so ten years they khana me is still just struggling ten years they need the free money on top of this

s across the country many cured up to four hours every day to exchange their old notes the banks kept running out of new bills and that led to some panic but india's finance minister says the policy is working. we are the years are not a party believe that the status quo from cash to digital transactions needed to be changed for the sake of the country's economy and overall development the number of individual tax returns has started to increase the digital transactions have increased to a certain extent high denominational currency has been squeezed clues on terror problem have also been tightened in a big way. well this is after all the fiscal policies or let's take a look at the numbers first of the good there were twenty five percent more income tax returns filed this year compared to last easing pressure on india's many public costs as the finance minister mentioned digital transactions of orses search that's meant to help with transparency since digital money can be easily monitored and building a modern digital economy requires innovation so that is also done well in payments c

certainly, community banks do not need to do it.the banks under 100 billion do not need to but banks in that -- the banks in my state with three of those andonal banks in my state they have been generally pretty conservative and in the way they have run their banks. . admire their leaders i just want to make sure the stress test will stay in place in the right way and a regular enough. i prefer annual. banks are profitable now. i understand these roles cost banks money but i understand what happened 10 years ago and i do not blame those three in ohio happened. i know the fingers are pointed directly and rightly at wall street. i am concerned about the regionals to make sure that they are safe and that the safety and soundness, is some of the same safety and soundness rules that apply to them. i'm ok with raising the threshold to radically, but you have to do the other things right, too. hit-to-failwo-base designation, -- the too big to fail designation, when asked if we still have a problem with the, he said no. do you agree? sen. brown: i believe the banking system is so much safer

year when prime minister narendra modi's government decided to withdraw several large denomination bank notes it said it was a way to crack down on so-called black money which is a term used to describe any earnings from money laundering tera financing or other illegal means but here after that sudden decision it's not clear if the policy has worked opposition parties organize protests to mark the one year anniversary of the withdrawal of the notes have accused the government of harming the economy india's unemployment has risen over the past year the government says replacing the currency has been a success but some strongly disagree. yes but today we want to observe a black day we want to tell noting that people have rejected the monetization and that is a decision was a wrong one and this was done to make the poor suffered from the coffers of the rich devoted as nation was only to benefit the rich who had cashed in their money already only the poor were left studying in queues to exchange work this currency bonus. culture of the city monetization of the state of the country is that e

bank.national law as a resolution to it. about the portuguese, spanish, the germans, or italian , we maded supervision huge progress. .t is possible to resolve you can see in the cases of this year. we ensured it is possible, and we are dealing with the cases. declared able to be failing or likely to fail. it was not the case three years ago. the market has taken it in stride this year. investors have a fair amount of trust. the question is, how much trust can they have for the future? are the mechanisms adequate? is the single resolution fund adequate to deal with future issues? fund isthe resolution building up over the years, and it will be adequate. we have an increasing level of capital. when you look on the capital onios of the last five years average for the banks, you see a huge step forward in the capital ratios. we ensure risk management has withved in the banks regard to adapting a business model. banks in europe have made huge steps forward. the overall resilience of the europea

do i buy bank equity or do i buy bank credit?dly, and this is the bloomberg corporate return more, an unhedged one, broadly as credits, are they starting to make you nervous? has rallied a lot. the thing with investing in credit versus equities is the difficulty of handing the risk, because the ratio has been phenomenal for credit because they just are not volatile, especially during upswings. credit has been a better investment for a while, but we think the credit in financials and broadly is looking more rich versus equities. credit to some extent has a very finite return. you cannot really have in a lowons exceeded yielding environment. in the equities, you can't have your expectations exceeded. longer thannues for people think in a more synchronized way than people think. the earnings could be into double digits with more capital returns. that would bern difficult to be exceeded in credit markets. matt: what are your biggest concerns when you look at bank equities, gerry? in the u.s., you have the fed, you know, on a rate ris

groups in the bank's communities. if confirmed, what will you do to increase the diversity of the leadership, workforce, and opinions in the federal reserve system >> thank you as i mentioned, i am a big supporter of the federal reserve system and also of diversity i think we make better decisions when we have diverse voices around the table, and that's something we're committed to at the federal reserve, both at the board of governors and the reserve banks. that's something i've been deeply involved in during all my time there, and i would say that -- so i've had a chance to -- this is something people have been working on for decades now, and you begin to see what works, and so my view of what works is a lot of private companies have been very successful in advancing diversity, and what seems to work is to have wholistic plan that you stick with over a long period of time, and it's about recruiting, it's about going out of your way to bring people in once they are in, it's about giving them paths for success, and it

community banks. so this is something we strive to achieve. we're taking a fresh look at that right now. and i would just point out a couple of areas i think in certain capital we require of the largest banks, higher capital. and we have less stringent requirements as we move down and more simple capital requirements as well. i would also point out something like the vocal rule where reel really it can apply its in most strongest form to the banks that have training books and much more stringently we believe as we go to the smaller banks. >> thank you. and actually my next question is on that bill. as you just pointed out, two weeks ago 20 u.s. senators introduced the economic growth regulatory relief and consumer protection act. and i'm not going to ask you to get into the business of the politics of that act with us. do you believe if you had a chance to review it, do you believe if that act if enacted within the law will provide regulatory relief to community banks, mid-sized banks and regional ban

would you have any problems with deutsche bank and commerce bank merging? comment on single institutions. that is for the banks to decide themselves, and whoever wants to merge, may have to apply with the ecb. i never make any comments on individual institutions whatsoever. look forward to may be having this conversation in the future then when we get some news, positive or negative. can i ask you a question that is very relevant for many of those sitting here in london with me? when only going to get clarity, on which functions that banks, can remain in london, and which functions need to move to the e.u. post-brexit? when are we going to get clarity on that? >> i wish i would know that. we are still in phase one of the brexit negotiations, and it is not at all we are whether or not, as originally envisaged, we would go to step two big or phase two in december. we have to a for that. it is my impression that negotiations are going rather slowly and it is going to take some time until we have clarity. this is why we have asked the precautionary measures, no

there's realistically only two central banks, the bank of england and the fed who are on a path towards hiking rates after the ecb was more dovish recently the focus will have to be on wages. wages are going to be the main driver of inflation. inflation expectations this is all that central banks will be looking at in the months >> you will be waiting for a while if you are waiting for inflation. haven't you heard about automation this is the missing link -- >> is an argument about whether the old-fashioned models to model slack and inflation in the economy are accurate in the current environment. the fact of the environment is we don't know. central banks, they told us they're not sure themselves. yellen said that they're looking at how to interpret the data how to forecast what wages will do in the next few weeks and months for now, for them, they have to follow a cautious path >> it's an interesting point when you talk about wages, particularly from your world that you look at, emerging markets. it feels like robotics are much stronger in emerging markets, is there some impact on thi

not just commercial banking, but central banking, as well. i think the announcement recently by the central banks of hong kong and singapore, that they are going to work on a joint project to implement block chain as the core technology underpinning both central banks, i think that was a very important story, i think it's worth following. yousef: coming up on "the best of bloomberg markets: middle east," the u.s. president confirms his fed chair pick. we spoke to the middle east ceo on what that means for the region. this is bloomberg. ♪ ♪ yousef: welcome back to "the best of bloomberg markets: middle east." president trump made a decision about the next fed chair, he is going with jay powell. we spoke with him warm asset management's middle east ceo about how that will impact the region. take a look. >> i don't know enough about jerome powell, but i don't think it makes a big difference to the trajectory of monetary policy. it is quite clear the labor market is tightening. the economy in the u.s. is doing very well, even for fiscal stimulus

the only bank and bucket for his jpmorgan. there are no banks and bucket five.it suisse, royal bank of canada all falling to lower buckets. only bank of china rose to a higher bucket. guy: it is a greco. an event that has a portable house. a greco probably provided -- the stock is being crushed this morning on the london markets, down very heavily. this is the didi function -- the gd function. at this point in time, we are trading higher on the normal average. what is happening, what the companies indicating in 2018 guidance is going to be very tough to achieve if you read between the lines. a bunch of institutions are out with notes. it sees a 20% downside on the stoxx. this morning may not be all that we get out of a greco. it was a company that was mentioned with a situation indians about -- situation in zimbabwe. stay with bloomberg television. up next, it is surveillance. matt miller and i are off to number radio. -- off to bloomberg radio. this is bloomberg. ♪ francine: election rerun. merkel says she is open to a new vote to break germany's political stal

system doesn't really work at all in the sense of with banking information for instance the swiss bank secrecy. wasn't possible to provide came from to have to get information. on the legal way because for instance germany both c.d.'s and actually paid money for it so that the information was provided illegally today system as a matter of fact and that's also on the political side it's close to impossible to legally open taping that information because you have to see the law made by parliament by. more or less by multinationals more or less by high net worth individuals and those laws actually. themselves it's not the protection of the. man industry it's more a protection for themselves so the information which is obtained illegally that's the way to get the information out to the public all unfortunately we have to change the law so i mean i do believe in the democrat. in law. as. it is off today in many states that's not possible well mr helmer for their record out also believe in democracy and the rule of law and i think one upside in this hall leaking and counter leaking saga with

the bank's target is 2%..2%, then start falling away. but it's trying to ta ke falling away. but it's trying to take some heat out of the economy by raising interest rates. many millions of people on variable mortgage rate will see a slight increase in their monthly repayments. maybe ten to £20. but also good news for savers, finally, also good news for savers, finally, a small rise in those miserable savings rates which they've been suffering for the past decade. but the bank is still signalling that the bank is still signalling that the economy is still very delicate. it has warned again about the brexit risk. and look into the future, it has said any new rises will be limited and gradual. another interest rate rise possibly next year, another 0.25%, up 20.75%. they're not another one until 2020. __ up they're not another one until 2020. —— up to 0.75%. don't forget the survey that revealed that an unexpected bill of just survey that revealed that an unexpected bill ofjust £50 would really face many househo

data these banks have.nation of all these technologies is coming into play as a massive tool to get good pricing and transparency in the and toto the customers their internal processes and systems as well. thatl of the support for -- >> absolutely. you look at commercial banking and corporate banking, there's huge predictive analytics that are happening at this moment. the banks would not go out and hire data scientists -- data science is massive and so is ai and machine learning. mark: break it down for us. who is making all the money? who's getting the best compensation? >> in this business, any compensation is a huge compensation. in the last for years, we've seen a bit of pressure on compensation. they are always superstars in these groups that get paid. there's a war for talented traders. banks don't want to lose their top performers. you don't hear the heyday competition of 2006 and 2007, any sort of compensation is massive and these businesses. it's great that they are in that position. . it's not li

into banks.w that rotation in the u.s. , but tech stocks in asia still outperforming this year. it's a southce, korean won that has been underperforming, but outperforming has been sterling. touching a two month high on reports the government in london may have come to some agreement over the irish border. we may see sterling close above its three-year downtrend. inll short of the high back september but we did touch a two-month high. take a look at what's in happening in the fixed income space, yesterday on the progress we've been hearing about tax reform, we did see a reaction, steepening the most in september. despite all the hullabaloo over curve flattening we've had over the past few weeks, what we had is remarkable movement in the 10 year yield overall. even though we saw it move higher six basis points, the 10 year yield has been trading and is tightly -- titus monthly range since 19 79 -- society and 79. 2.39% which is about where he finished off yesterday. and finally taking a look at it

the innovation around central banking is important. secondly, globalization has dampened wage pressure. there's no question about that, that you can't have new pools of labor entering the global labor market, the global supply chains. that has made it difficult to have a wage spiral going on. then, technology it is another piece, where the combination of technology competition and integration of new economies, new spaces, new pools of labor, has made it difficult indeed for inflation to behave the way it would have in the 60's or 70's. francine: should we still look at the phillips curve? is broken are dead? philipp: i think maybe that's the wrong question to ask. i think it's more about, how do we think these forces will evolve over time? i think it's true that prices behave differently today than they did some decades ago. probably, that will not change. i think we do have -- the good news here is we have an environment where we probably don't face inflation pressures. having said that, it still remains true that monetary policy has