bank was named as the culprit . they just send it into the bank. for maybe a couple of dollars maybe a day and then the sand if there are more of it spreads around the world the one point three billion euros has yet to be tracked down the line government is now amending its legislation in an effort to challenge money laundering among the country's banks and the new generation of bankers also seems eager to end the criminal practice of the banks. thirty thousand customers in the span of one and a half year which for a total customer base of their own two million two point two million is a lot. bank has since been banned from trading in the euro or dollars owns latvia's banking regulator recently approved its liquidation. deutsche bank has failed the second round of the us federal reserve's annual stress test and the criticism is harsh just as a new boss takes over at the helm of the lender to steer it on to car waters or go to frankfurt at a boma to get the latest from our financial correspondent first all the details. george of banks u.s. division

georgia banks u.s. division has failed the second round of the u.s. federal reserve's annual stress tests now a test was pasta by thirty one of the thirty five banks examined shareholders all continuing to question the overall health of germany's number one lenda share they've taken a tumble as the bank's new ball struggles to bring the bank back from the brink. georgia banks u.s. division had passed the first round of the stress test the quantity of section that measures capital levels against a severe recession in the second qualitative round of the test however the fed cited three critical deficiencies for deutscher. weaknesses in its data capabilities revenue and loss forecasts and its internal control systems. the message from the fed the us army suffers from poor management. the report comes one month after the us deposit insurance regulator added the lender to a list of problem banks. germany's flagship lender has seen its image plummet in the wake of the global financial crisis ga has now posted

the banks credit rating has been just the bank's credit rating has been slashed -- the banks credit rating has been slashed. christian sewing tries to reinvent europe's largest investment bank. he comes one day after u.s. relators have put deutsche bank's operations on a list of problem banks. not only the fed but the fcic -- fdic. whether they be financial or managerial. the firm and frank for it said it is overhauling the operations, the issue. they said there are no concerns about its financial stability. investors are clearly not free of concerns. check out the shares over the past five years now come to an all-time low. let's go back to singapore for the bloomberg business flash. ceoette: matt, samsonite has stepped down after concerns about accounting prices this -- accounting practices. he will be replaced by the cfo. -- betweenshort sell indian entities. the company has refuted claims. it shares have jumped today in hong kong trading. pushing tohs consumer finance has even bigger aim then investors might have imagined. david solomon has said in a presentation that personal loans ar

inommunity banking model midsize bank model a large bank model. on the smaller and we service those banks by regional locations in occ. examiners are not embedded in the banks. in the midsize bank group we have a split where some are in and some are out. in the large group we have them resident on site -- resident on site. here and examined it and based on my background, i looked at the procedures and processes in just so everyone is aware, every five years we rotate. actually it is less than five years. we rotate the examiner in charge. second we have resident experts that are both in the field and in washington that review all of the examination papers and data for accuracy and to make sure that no one could take data and make inappropriate conclusions. then we have a deputy comptroller that is centralized and has oversight for the financial institution. happen, i felt the controls were in place. the fourth category having resident on-site examiners who have open architect access to anything going on in that bank, they can go to meetings. you ca

and banks. we have some people who know about bank formation and we have a lot of government officials who just sort of know a lot about how the city works. so a little bit about process. we meet once a month, and in between meetings, members of the treasurer's office including me sort of, you know, develop plans and research and sort of go in front of the task force with some different proposals? and also, we're constantly meeting with members of the public and advocates and subject matter experts in other jurisdictions. and i should just also add in a thank you to the board of supervisors for funding this project because it is funding my salaries and also some salaries for consultants and professional services, that buzz word again, so definitely do not want to forget to mention that. so just a little bit about municipal banking. one thing that i will frequently tell folks who are interested in municipal banking is that it's really a spec rum rather than a binary. it's not an on-off switch. th

banks and then sustain their partner banks banks are codependent like torture bank and so forth that's the system that we have now artificial subsidies of the financial institutions at the core of the financial crisis by the central banks colluded upon by the central banks that have distorted and manipulated markets and savings rates for people throughout the world so you gave a lot there but i want to dig into it and thank you for your patience with some of these questions so it was one the quantitative easing essentially zero interest rates but you alluded to it but just to be clear for our viewers this is after a seven hundred billion dollar bailout so that they were they were backed up so they made these irresponsible bets in part on these things that used to deal with the goldman sachs the c.v.s. is these credit default swaps based upon home mortgages that were some were good some were bad they mixed them up they spread them around and one of the problems that the financial crisis inquiry commission noted was that the valuation of those c.d.'s is was in the eye of the ball holders

deutsche bank a stock to watch.reat gate says it will bounce at the open in just four minutes time. this is bloomberg. ♪ ♪ matt: here we go. less than a minute to go to the open. an incredibly busy morning. business and political and economic news around the world. take a look at futures. inre looking at a gain european futures. investors are selling the yen against the dollar. they are purchasing spanish and italian debt right now. 0.75% on thep continent. it looks like we could have a positive open even for shares of deutsche bank. trade gate has indicated that that bank will rise after falling to an all-time low in yesterday's trade. just as the market opens up, let us look at some of the indexes out of the gauge. we are looking at the ftse. climb thisch it morning. the ftse is always the first out of the gate. take a and the dax little longer to open up. especially on a volatile morning. in ibex is up almost 1% spain. about to getjoy is voted out of office and the socialist are about to take over with what one g

the swiss bank and so forth so all of the biggest banks yes have colluded with the central banks by the central banks have also colluded with each other to keep the overall level of money available to these larger banks or larger corporations that they select in their various countries motivated by extra cash basically as opposed to using that money in any other purpose or simply not giving it to them right let's talk about the role of the central banks basically in terms of an overall relationship i mean really we talk about the g. seven meeting sure the presidents will show. and shake hands but give the day there's seemed to be a very tremendous financial implication and sort of motivation to a lot of the deals being made there. from these major company countries but. what strikes me is that we're talking about trade war school going on and basically a lot of we've seen that already with major sanctions on massive countries like russia that's ongoing iran obviously this new round of sanctions we're looking at and people talking about potential trade wars between even countries as larg

a wholly backed reserve bank i mean if you apply that to the banks in the u.k. lloyds has b.c. barclays bank of yes yeah right they would all have to be technically declare insolvency because they have no assets yet i mean you've actually been on stage here in ireland with martin wolf and he wasn't this radical back then but he's also suggesting that citizens should be allowed to put their own deposits at the central bank just like banks can and that's how they're able to spend money because they're able to borrow from the central bank at zero percent and then lend to us like ten. why is he making this converging convergence why is he coming to damascus why is he coming to the holy land well if you're i was financially because he's being pressured by a big coin yeah i understand we're going to call it what we're going to get to that in a second but i want to finish up on the smartwatch story because the fact is when when banks are lending money and creating money in the u.k. i know for a fact that eighty five percent of all their loans are against mortgages that

banking reporter. caroline: we have to stick with banks. let's look at the european side of the equation. ubs asset management division cutting -- let's bring in a finance reporter based in zurich. how many are we losing in the asset management part of the business? >> you said it already. 100 people are leaving. these jobs across the asset management unit and across regions and divisions. we understand these job cuts are mainly happening in sales for people who distribute funds and these types of people -- we talk about 100 job cuts. that sounds, in the grand scheme soundsgs, that relatively small, but on the other hand the asset management division is the smallest unit -- 2300 people. it is a significant step and is basically to lower cost at the unit. something did not fit. we should see the move in the light of that and they want to free up resources for the expansion in china. it is a restructuring case at ubs. caroline: many steps are being got, 90 what has he focuses in terms of reorienting the business? where is the key? it seems to

bank was named as the culprit. they just send it into the bank. for maybe maybe a day and then send it farther margret it spreads around the world the one point three billion euros has yet to be tracked down the line government is now amending its legislation in an effort to challenge money laundering among the country's banks and the new generation of bankers also seems eager to end the criminal practice of the banks. thirty thousand customers in the span of one and a half year which for a total customer base of their own two million two point two million is a lot. the bank has since been banned from trading in the euro or dollars owns latvia's banking regulator recently approved its liquidation. corruption is also on the agenda as leaders of the african union member states meet in mauritania this weekend but that's not the only big issue as countries around the world scrap it out over free trade africa is wondering if it will be caught in the middle. more trade is urgently needed in africa fifty five nations only conduct about sixteen percent of

the swiss bank and so forth so all of the biggest banks yes have colluded with the central banks by the central banks have also colluded with each other to keep the overall level of money available to these larger banks or larger corporations that they select in their various countries motivated by extra cash basically as opposed to using that money in any other purpose or simply not giving it to them right let's talk about the role of the central banks basically in terms of an overall relationship i mean really when we talk about the g. seven meeting sure the presidents will show up and kiss and shake hands but give the day this does seem to be a very tremendous financial implication and sort of motivation to a lot of the deals being made there from these major companies countries but. what strikes me is that we're talking now about trade war school going on and basically a lot of we've seen that already with major sanctions on massive countries like russia that's ongoing iran obviously this new round of sanctions we're looking at and people talking about potential trade wars between e

the ceo of deutsche bank, only bank to fail the fed stress test speaks out in a rare and exclusive interview. >> i'm phil lebeau in chicago, eight years since tesla's ipo, the stock rocketed higher, there's still a question on the mind of investors. >> reporter: we're in berkley, california, marijuana retailers in the state are scrambling to offload inventory after a law change over the weekend. the winners and losers over the shifting pot industry ahead. >>> i'm sara ieisen, we'll get your portfolio ready for the second half. the "closing bell" starts right now ♪ >> good afternoon, happy friday. >> you were roughunning >> you would have done so. that's good. welcome, everyone, happy friday, all of those stories and more to come, of course, but first let's check in on the markets. we are nicely higher this friday afternoon, up around about a percent on the dow, 235, high of the day of the dow is 293, and the low was up 108, so it's been green on the screens throughout the day. the s&p and nasdaq up as well, but trailing the dow >> the dow and s&p had the biggest gains in more than three week

rishaad: let's analyze that movement by the reserve bank. that is a reserve bank economist. what an interest rate hike make any difference? acts as an interest rate hike in itself. >> you would argue india's oil demand is elastic and it will unless r.b.i.den, hikes so much it brings the economy to its knees. i do not think the oil issue in itself explains the rate hike. emerging markets in general you have to signal proactive nests of higheruble tsunami interest rates and higher dollar. we have seen other central banks in the em universe acting. india is no exception. are they one and done in your view? >> no. interestwhat would an rate hike do? interest rates may be a blunt instrument. taimur: a couple things. well., growth is doing domestic demand has turned around after a couple years of poor performance. you were talking about a central bank which has an inflation other -- we see price-related developments that are not conducive to its achieving its inflation target in play. what influence do they have? primarily the interest rate. so they will nudge it up. the bank syst

corporates turn to banks. you have to have robust banks. they have been lagging.hat is a market opportunity, but you have to hire people and grow your business. it is opposite deutsche bank. david: we hear that if you could change the geopolitical structure, because part of the problem is so many different countries and so many different banking authorities. it's not like the united states where you have one federal authority. when you talk about cross-border mergers and consolidations, it is much more cumbersome over there. you have the ecb and individual authorities. alix: i think andrew is good. let's go there and talk about banks. wondered if you're overweight european stocks is overweight european banks. >> yes. the sector faces challenges, but his trading at one of the largest discounts in history. it has been a large performer. wrong point to reduce exposure to the banking sector. there are certain banks with fundamental issues, but you have a eurozone bed is growing, rates moving higher, and we think that provides good, positive profit growth and additiona

fantastic erroring generated on the deutsche bank and commerce bank story.tephen joining us out of frankfurt. a bit of pressure going through on the south african rand. we have had a series of emerging market central banks coming through and raising rates. doesn't look like they will deliver a similar story. the team has gone through that. we have trading against the u.s. dollar against the rand at 13.1423 right now. we did see some very weak g.d.p. data over the last few sessions. that is a story we are watching carefully. we are minutes away from the start of the market open. 11 minutes away. up next we are going to take a look at stocks to watch. bp looks like it is on move. gary panera looks like he is departing. the recent strategy reset hasn't gone that well with investors, and he has decided to go. the stock has gone anywhere from 1% to 5%. market open is 11 minutes away. stocks to watch next. this is bloomberg. >> eight minutes from the start of european cash trading this morning. european futures pointing negative. which stocks are going to be watch

banks. they want the banks to get back into the business of payday loans, something that has been prohibited since 2002. he's pulled back on the guidance meant to protect the system for reckless corporate lending. and other plans that deeply concerned members of this committee. i think on both sides of th the aisle deeply concerns the committee for the reinvestment act that pushes banks very profitable thanks i might add to serve the communities to address generations of exclusion and discrimination and bank lending. i don't know if the controller has read a book called the color of the law that recently came out. i think that it will give you a better historical knowledge of why this matters. that long legacy is part of why we still have a gap today. he hasn't learned the hard lessons of the past to stop the local protections on subprime mortgages and credit card rate hike was simply forgetting what happened ten and 12 years ago. especially people of color can't afford to return to the risk

we have a community bank abdul and we have a large bank model in a small bank model. the community bank model was done with retail officers where they'd examiners are as silent as offices for the midsized bank is a split. some are on-site and some are - on the on-site bank examiners so you understand we do rotate those examiners every five years and often we do it before the five-year period. we are rotating these people amongst financial institutions across america. we maintain decentralized and centralized resident experts on various activities on examiner is generally consulting specialists and those people often participate in a centralized environment. we have what would call it deputy comptroller that is assigned to each bank that provides oversight that is not in the banks. it's offside in the process in my experience having onset -- on-site banks they can go to any meeting they want and ride up and down elevators with employees and hasten the ears and eyes by being in that institution to see what's going on but other than one instance that i can remember the l

deutsche bank, the u.s.weree fed test talking about this and whether that would be the case. the fed doesn't object to the capital plans of 34 banks in the stress test and the fed ofecting to the capital plan deutsche bank. josh rosner. this is exactly what you were morganting, saying watch stanley and goldman sachs and of course deutsche bank. >> almost everybody, all the enemas -- all the analysts were expecting deutsche bank to fail. it would be shocking if they passed. in the results we got last week, their numbers on leverage came so close to the minimum, the mass didn't work. what's really interesting is they are still getting a little wereore down like people expecting. a lot of analysts looked at the numbers and said not only can they not increase, they have to decrease from last year. they're passing that actually allows them to stay at the level of the last two years. a little better than people were expecting. >> the thing that is important to think about in terms of the way the fed is looking at

comes on cnbc, they're bullish banks, they recommend people going banks or overweight banks or something like an energy. i picked that because there's general consensus that people are underweight energy exposure. >> right yes. i think there's something to that though. but for me, i think the bank issue right now is so compelling i don't care that it's out of favor right now. i totally agree with tim also. the economy's so important for banks and it's humming along >> it went up before today's results. they were up today before that. >> for instant reaction, let's go off the charts with todd gordon of tradinganalysis.com. >> first, if we can take a look at gold, it was looking strong before we got on here, up around $2.25 here we've given back some of the gains. obviously we have the highs of the day here during the regular session. after hours, we came up, tested that beginning to back off. going back to the closing price. potentially right now a nonevent goldman if we can kind of look at the significance of these support levels, it's real. i'm listening intently to the conversation you

and deutsche bank.said, they will not be behind a plan that could result in layoffs, a lot of firings, a for of jobs in this sector, years and years to come. nejra: bloomberg's matt miller is in frankfurt, thank you so much. there is a maze custom plan for theresa may'srry some custom plan proposal remains now. for james is still with us. what is your best case for what happens here? >> i think we did need to this backstop, because the idea of the united kingdom being able to agree to a completely open trade deal with the eu by december 2018 doesn't look like a will happen, it looks challenged. -- itg a backstop is provides a bit more insurance. but i think that even that may not be enough. i can still see that december 2021, the endpoint slipping further. anna: and points, or just other lent to get the talks done by that? he was a little bit cagey on the language. in terms of the underlying u.k., they of have been talking positively about that. but economic data softening is another charts i have here.

bank.hey discussed a combination of the two lenders with investors in recent months. this comes as germany's largest lender struggles with its turnaround plan. a spokesman declined to comment. day,l news, 24 hours a thousands of journalists, i and taylor riggs, this is bloomberg. francine: donald trump has lashed out at france and canada ahead of the meeting in quebec, accusing them of unfair trade practices. that sets the tone for what is likely to be the most acrimonious summit in years, with trump facing off with other heads of state including issues like steel tariffs, iran, and climate change. the former fed chair says the u.s. economy could face a challenging slowdown as the administrations fiscal stimulus slows down. joining us now are our guests. . it is terrific news. if you look at the summit, the meeting, equities, where do you see a correction coming from? well, the global economy is in pretty good shape. good expansion, growth coming through. the underlying fundamentals are pre

shares in deutsche bank fell to a record low earlier this week cnbc speaks exclusively to deutsche bank's new ceo, christian sewing later today. >>> european leaders in brussels brokered an agreement on the migration crisis after nine hours of talks despite initial reservations from italy. speaking after the marathon talks, the italian prime minister said that from today italy is no longer alone the text of the european coun l counsel's conclusions urged to prevent uncontrolled migrant flows. they are looking for third party migrant centers outside the eu and countries will also share responsibility for migrants rescued at sea while clamping down on smugglers. speaking at the conclusion of the talks at around 5:00 in the morning, french president emanuel macron hailed european cooperation. >> translator: just a word to say after nine hours of talks and work, a deal has been reached. it's good news for france. it's the fruit of combined work and european cooperation that won as opposed to a national decision that would have been neither efficient nor lasting. >> willem is out there in brus

reserve a wholly backed reserve bank i mean if you apply that to the banks in the u.k. lloyds has b.c. barclays bank of yes yeah right they would all have to be technically declare insolvency because they have no assets yet i mean you've actually been on stage here in ireland with martin wolf and he wasn't this radical back then but he's also suggesting that citizens should be allowed to put their own deposits at the central bank just like banks can and that's how they're able to spend money because they're able to borrow from the central bank at zero percent and then lend to us like ten. why is he making this converging convergence why is he coming to damascus why is he coming to the holy land well if you're i was financially because he's being pressured by a big coin yeah i understand we're going to get are a bit more of what we're going to get to that in a second but i want to finish up on the smartwatch story because the fact is when when banks are lending money and creating money in the u.k. i know for a fact that eighty five percent of all their loans are against

merged possible bank and deutsche bank retail. working on several problems at the same time. i would like to point out the actual u.s. problems deutsche bank has are not so significant as they are so important as they seem on the first of you. that the essence of of three entities concerned this u.s. authorities action are below 10 percent of the overall balance sheet of deutsche bank groups. real,s not concern a let's say, a real problem or big area of the bank. you are: i understand saying the executive needs time, legacy problems. but why own deutsche bank and not something else. pardon me, the line was that. whycine: the question is, would you own this bank when shares keep falling and not by another bank as a shareholder? klaus: that is a good question. if you are already invested in deutsche bank, you should not sell the shares right now. that share price won't go down any further. won't fall down under let's say eight euros. sense to sellke shares right now. i think it makes more sense to buy shares right now, because a reo

you've got all of these other sort of neo banks or challenger banks to market. seems like there can't be space for all these guys. >> yeah, could be, but i think we're also coming from a very different space because we're really connected to the merchants as well. we're not only on the kind of issuing side as we say in the industry, but also on the acquiring side we know the merchants. we know the problems customers face when they shop online, and we're really targeting focusing on those users and how to solve their problems. >> reporter: around $250 million in funding last yearyou're lued at about $2.5 billion when jumping into new areas, will you need fresh capital to fund that, and does that come through vc funding again and strategic partnerships like you have with visa, and they've got a st, or will that be via an ip snonk. >> i think we've always focused on being a profitable company and that's given us the means to do exciting things. >> reporter: will you need fresh capital to pursue that >> i think at the current rate and the growth we have, i don't see

then i went into banking. at the time coming up as a young lawyer so i started to work in the bank and then the crisis hit and at that point in my career it was time to do a shift as you're getting older and as a senior the opportunity came up to work at the federal reserve bank of new york. >> what type of four did you do at the fed? >> as senior bank examiner. a fancy to save my job was to go into any bank to check to see if they are complying with the law laws. >> how complex are the banking laws that bank of america or goldman sachs? >> come monday -- incredibly complex thousands and thousands of regulations already in the books. i focused on international areas. so add the 50 states and all those additional as well. it is incredibly complex that it takes many years to understand what is going on. >>host: as a compliance officer with the federal reserve you were a government employee? >> yes. >>host: your focus was goldman sachs? >> correct. >>host: where we located? what work did you do? >> at the time th

establishment bank french bank and you know felix rohatyn which was their c.e.o. back in the seventy's and eighty's orchestrated the municipal systems corporation or mack bond turnaround from new york city the. they're the go to advisors for the insiders of these various nation states and they have a great reputation and they are see the writing on the law they realize that bitcoin is about to kill off deader than a bag of hammers but you and i have also said here on kai's report you heard this your first we did say on kai's report years ago that when us the us started using you know lateral power the fact that the wearing a uniform the world led by the us as an empire they do they do have a lot of power but they don't because as soon as they use their unilateral power alternative spring up when they start imposing restrictions on people access in the global financial system to swift for example we said because it's going to be used as an alternative or goals or something like that so this is what we're seeing with statements like this coming from those are bank i

banks. this statement further associated, iran will continue to be denied accs to the world's largest financial and commercial market. that's us. that's what they said. on august 5, 201 the then acting under secretary o treasury for terrorism and financial intelligence testified before the u.s. senate committee on banking t quote, iran will be denied access to the world's most important mket, unable to deal with the world's most important currency, that being the dollar. he also stated, quote, iranian banks will not be able to clear u.s. dollars through new york, hold correspondent relationship with the financial institutions or enter into arrangements with u.s. banks. thesims weryere clear. the u.s. financial system was not to be used. despite these claims, the very next year, just after implementation of the deal had begun, we started hearing reports that the obama administration was considering changing course on this obviously raised a lot of concerns for member of congress on the other

banks to scale back payouts. deutsche bank fa

banks to scale back payouts. deutsche bank fails the test entirely. president trump toward a new wisconsin plant. new wisconsin plant. yvonne: kathleen, let's kick it off on friday with breaking news out of south korea. industrial production numbers year on year coming in. they are in line with estimates growing 9/10 of 1%. month on month seeing it 1.1% gain which was much better than what the economists were expecting. it is slowing down from what we have seen in previous months before that. we have seen signs of this within the economy whether it is export growth having a slowdown as well, and there is a lot of questions about the one as well -- juan as well. still, they are in the crossfire here within u.s. and china trade dispute. kathleen: every export dependent nation in asia is watching exports, watching industrial production very closely. we are watching japan's industrial production later in the show. stocks managed to rebound today. bonds was bac -- bonds pushed back a little. you can find this gtd on your bloomberg terminal. what i'm showin

of the world bank.he bank for sex workers in mumbai closes down, leaving many women without a place to safely put their money. hello and welcome to asia business report, i am sharanjit leyl. the asia infrastructure investment bank, which has been dubbed china's version of the world bank, is holding its third annual meeting in mumbai. spurred by the us and japan, it will include representatives from the bank's 86 members, including india's prime minister narendra modi. instance, do you know which country is the largest shareholder after china? well, country is the largest shareholder after china 7 well, it country is the largest shareholder after china? well, it is india. and did you know who are the biggest recipient of loans from aiib? again, it is india, receiving $4.4 billion of investments to date. this may be surprising to most, when india has in the past balked at china's ioi road programme. wait, we will aim to bring you that report very shortly. i believe we have, there you go. india's prime min

bank that was stress tested is about 30% of their u.s. banking spaces taylor: -- banking spaces.all of the market risk is part of the business they are looking to run down, rates, etc. we can't compete. we are going to retrench. they took a new strategy. will they pull out of the u.s.? absolutely not. they have a lot of other services -- a lot of other banks they service from. i guess i would agree with that from a distance here. what is the urgency of deutsche bank to turn things around? eight year low handle on deutsche bank today. what is the timeline to turn this around on june 30, 2018? reporter: part of the problem they've had is revenue they had absolutely no idea about. , 2 billion.range nobody has a handle at all on that. the ability to forecast revenues within many of hundreds of millions, they don't have that either. the first thing this got to do is get a handle on cost. that will be more pain, unfortunately. that will take six to 12 months. the stock was at multiyear lows, and my that would be this is short recovery on a day when it looks quite attractive because the

and all the other banks and many of the other banks at least in the united kingdom in the certainly the financial system itself were bailed out by the inflation tax caused by the quantitative easing so they subpoenaed peaceful aides released that report to the public and way to go well we can't do that because of confidential confidentiality of our clients and our customers and things like well neil mitchell had the report and he released it in the matter of national interest he's a lot of you know the attitudes are the consumer in the banking sector in the u.k. straight them like mushrooms you feed them essentially feces and you keep them in the dark and feed them dog poop essentially that's the attitude that the regulators number ten downing street everyone who has any oversight capacity whatsoever for the u.k. banking industry treat them like mushrooms now we have chorus were reporting on this in real time we informed the british public about the frauds that were going on the massive fraud oh my little camera seems to have become flacid well put that over there first so i can may

and all the other banks and many of the other banks at least in the united kingdom in the certainly the financial system itself were bailed out by the inflation tax caused by the quantitative easing so they subpoenaed peaceful aides released that report to the public and way to go well we can't do that because of confidential confidentiality of our clients and our customers and things like well neil mitchell had the report and he released it in the matter of national interest he says a lot of you know the attitudes are the consumer in the banking sector in the case treat them like mushrooms you feed them essentially feces and you keep them in the dark and feed them dog poop essentially that's the attitude that the regulators number ten downing street everyone who has any oversight capacity whatsoever for the u.k. banking industry treat them all like mushrooms now we have chorused were reporting on this in real time we informed the british public about the frauds that were going on the massive fraud oh my little camera seems to have become flacid well put that over there first so i c

seeing that in eurozone banks, french banks, chinese banks, and most2 of the world's systemically importanttions are in bear market 2006.ory since january alix: your black swan for u.s. banks, what does that mean? ian: the bad news is the next 5 stocks now down 19% are american stocks. at that point, you will start to hear much more noise. alix: how much more downside from their? ian: the worrying chance we have in the black swan alert is liquidity is being drawn down. this could suggest another potential 20%. that will challenge market expectations because when you get these stocks under pressure, the rates -- do rates go up or down? the consensus is u.s. rates are going up and treasury yields are going higher. we think treasury yields will head 3.5%efore they because of weakening in the financial system. alix: where do you like things? ian: i don't think you want to have any banks at this time. bankse of these european the cross holdings and interrelationships of the global banking system means u.s. banks will not escape that global liquidity timing. alix: ian harnett making me feel reall

bank sent by european banks -- buy european banks?ck: you have an interest rate margin in the u.s., a tailwind for profitability. investment banks into u.s. have done better trading's -- -- trading than the european banks. but you have deutsche bank moving away from that, ubs and credit suisse pulling back from that area. europe needs trading and investment banks, and the french banks are the sweet spot right now. they are well capitalized and that will improve margins on that side of the business. it will be a quick rebound on the french banks. they got caught up in what all of the other banks did, the suppose it crisis in italy. they sold off, and you will see a quick rebound on the french banks. into turkey is quite interesting. not individual names, but it has been a factor. wheree we in a situation re above potential growth? when europe recovered, there was everyone got excited and before that, you want to make money, you want trformance on e european recovtheuropean bank. it never really happened. patrick: and the issues with ne

andsche bank down by 2.5% commerce bank up by a similar amount.e love to discuss whether these two german banks not performing that well could tie up. the is in the press because deutsche bank chairman has been discussing it with none other than government officials. we also report speaking with top shareholders. could this be a deal that eventually gets done? not likely in the short term as they have got to tie up their own particular issues in terms of their banks. that's what analysts are saying. they have particular got to be looking at that balance sheet first. alsoer, morgan stanley cutting their price target on deutsche bank earlier today. not really risk news for deutsche bank today. let's look at ams. this is where abigail left off. this is a chipmaker on the downside because of those reports that apple is warning suppliers that you might have to pull back in terms of the iphone component. this is the nikkei reporting. sometimes it's not always particularly reliable. let's look at some of the other industry groups and asset classes out th

think both banks know they need scale in the notoriously over-bank to german market. would benefit both. toy are looking for a way cut costs, so synergies would be a good way. both banksclear that think they are not ready for any such merger just yet. they are both in turnaround plans. they will have to go through that before it becomes an option. people's mindsn and that people like to talk about, so the thought is there. ♪ erik: welcome back to "bloomberg best." i am erik schatzker. the head of switzerland's largest bank says, hang in there. he told manus cranny that investors should stay in the market despite the volatility. he sat down with the next was of interview in zÜrich, switzerland. bonds, but ifn you go back into the levels of in general, fx movements, yes, some movement, but not a lot of volatility compared to the standards. i would say overall investors are very cautious. they are out there observing the situation. they are not panicking. they are starting to get concerned. : did you take any risk off the table? >> i think we have been focused on managin