banks so banks had a lot of freedom to do the things american banks had very well. with lots of freedom but when they were competing thinking we could relax those more here in america and that another point is called the financial department stores was popular. at stern in 1990 we had classes should be due universal banking my colleagues would analyze that with that they should then they began to lobby that and then receive those relaxations at home. there was always an argument i don't think there is anything terribly sinister of that concentration i think my colleague would make it more sinister but there was an argument for what happened because of our banking history they could not do things if you could bank a nationwide so i started to study banking history you had to bank within one state like north carolina or california but in many states you were restricted but you could only bank in new york city or the surrounding county and mice home state of illinois they had to operate out of only one office like first national bank of chicago padua bank out of one of

they were universal banking but the universal banking model of europe was where banks have a lot of freedom to do the things that american banks gained and when they're competing with deutsche bank demand gotten the idea that we could relax her banking rules a little bit more in america. another point about that is the financial department stores. we have a lot of programs in the united states of universal banking. in my callings when in eliza and come up with the notion that they should. i think abcd would finance some of the research. but they began to lobby and then eventually, there is always an argument, i don't think there's anything sinister, mark doesn't make it seem sinister about the concentration that is happened. there was an argument for what happened and that said american banks, because of her banking history where they cannot do things where other countries, he could bank nationwide in america. i was surprised when i started studying baking history that in the 1960s you had to bank within one state, if you are lucky you could bank within a state like north carolina in califo

the issue with deutsche bank and with all banks, bank stocks trade at a discount for a few reasons.need to raise capital. number two is that people do not believe the balance sheet and three is just they are not earning their cost of capital, which can erode value over time. the fact that these companies are not earning their cost of capital and there is not a line of sight during their cost of capital, we are starting to see that it credit suisse, but at deutsche bank we need to see a path. to comment onnt oil or vice president biden or anything else? strong dollar, what catches your eye on this crazy morning? francine: the crazy morning is what catches my eye. we have a lot of earnings. i was surprised at how well the tech stocks did. microsoft was up some 4.5% pretrade. facebook also better than expected, so tech, banks, and oil. radar, at&t the really did not get it done yesterday. guestsou to our patient and our wonderful staff. this is bloomberg. ♪ 7p5óóo ♪ alix: talks fail between commerzbank and deutsche bank. not enough benefits outweigh the execution risks and capital requ

but he stayed away from banks. if you look at the history why he did that i think it dates back to the 1907.p panic. he needed j.p. morgan to help them basically to not have a larger punic throughout the united states an entire country. to keep money flowing throughout the entire country. i think that element of saving was something he required and therefore as a gentleman agreement made by busted up the larger institution which as a result is why we have j.p.ou morgan chase today. the fact that he did not bust up the banks back then is one of the reason the larger banks in the country today have been able to accumulate to that size in the way they have. >> too big to fail is not a new concept? >> no it isn't. the difference is in the recent past too big to fail were banks the became vague over this major period of the past century and required help for the government and the government help country provided the help from the federal reserve and the time back then they were helping themselves getting money fromm th

king of banking. the "new york times" called him that as well. the history goes back through this period, 1890s and 1920s because around the morgan bank, they were very influential for money and also for what happened politically and how the treasury department and the presidency ultimately survived their panic at the time. >> but nomi prins, tr was known for being the trust-buster, for not liking big business or railing against it at least publicly. >> yes, and he was. he is known as that and he was a trust-buster. what he busted was non-banks. so at the time, standard oil which was the major oil company under the rockefeller family and other types of companies of that nature, he actually did bust up some of their more powerful sort of elements to sort of try to make some more competitive environment. he did do that. he was known as that, and other industries as well. but he stayed away from banks. if you look at the history of why he did that, i think it goes back to that 1907 panic. he needed jp mo

and the bank of japan, on to the ultimate people's bank of china. all the major banks in different ways throughout the world decided to find ways to electronically fabricate money to put into their systems, and then they are still going. so this thing that was an emergency and considered to be an emergency back in 2008 has become policy. and it's become monetary policy and if the people don't really think of it this way, it's our economic policy. there's this body that can create funds when necessary and that has no legal cap to how much they can create. there's a cap in terms of how much conversation they might have about how much they have created what public opinion might be what political opinion might be, but there's no legal cap to what any of the central banks can create electronically in the guise of helping the financial system or in the guise of helping the general economy. that's why they have so much more power now than they had before because they now know this, and in different ways over the last years, decade low sense of financial cr

bank of america post record profit on strength of consumer banking, and goldman disappoints. and grosslity low concerns hi, ken earnings provide some leadership? -- growth concerns high, ken earnings provide some leadership can earningsngs -- provide some leadership? >> what a day of earnings we have ahead of us. we did get the earnings from johnson & johnson. raise theiry full-year adjusted earnings-per-share estimates. in general, they are raising their view. you are seeing the shares pop by about 8%. the actual estimate for earnings-per-share, $2.10, came in higher than the estimate. revenue also beating. just interesting to see how the pop in the shares is not that big. there was a lot of positivity baked in, even with the beat here. david: they did really well on pharmaceuticals. at the same time, they've got some real ethics concerns, and there is this overhang from washington on whether they will regulate drug prices. we will have more in our next hour with johnson & johnson's cfo. will go now to bank of america. lisa: let's figure out what exactly was driving the acti

banks, if we only had big foreign banks, how do you feel like big european banks or state-owned banks in china would do at helping us enforce american sanctions against bad actors and rogue regimes around the world for example, iran. >> the sanctions have to be executed by the banks in america. and it's because we move all that money and because we do exactly what ofac and treasury, what they tell us to do but we execute it >> so would all of you agree that having large financial institutions is good for america's national security? can you just raise your hand if you agree with that statement. let the record reflect that everyone raised their hand because cyber was such a consensus item, i have 1 minute and 24 seconds to deal with that very important issue now would each of you agree that a static standard does not work, a government standard that sets a standard today that tomorrow is outdated, almost the day it's in effect if you want to -- mr. dimon, i'll let you start with that one. >> absolutely. it changes every day it's going to be going on for the rest of our lives and it is

bank by foreign national banks. banks, ifence of u.s. we only had big foreign banks, how you feel like big european banks or state-owned banks in china would do it helping us enforce american sanctions against bad at your's and wrote regimes around the world. -- against -- bad actors and rogue regimes around the world, especially iran? rep. stivers: -- >> we move all of that money and they tell us what to do. the second thing is to have a reserve currency. thestrength of america plus strength of the banking system -- rep. stivers: what all of you agree that having large financial institutions is good for america's national security? can you raise your hand if you agree with that statement? let the record reflect everyone raise their hand. acause cyber was such consistent item, i have a minute and 24 seconds to deal with that item. what each of you agree that a static standard does not work? a government standard that sets the standard today that tomorrow is outdated almost the day it is effective? , i will let you s

better-than-expected bank earnings here as well. central banks turn dovish. let's go to mark cudmore from the mliv blog and talk more about that. the bank of japan throwing down the gauntlet for the ecb as marc cranfield put it on your blog. doesn't that mean investors should pile into equities? >> i think that would be the case if they had not been piling into equities so freely the past couple months. we see an incredible start to the year for equities. i have been bullish all year. i am turning more concerned after the data in asia has been pretty terrible this week. showing we poor data have not got the broad pickup yet. overall, i remain very constructive for equities. asian equities which have led higher will also lead a consolidation period. there might be more of a consolidation period elsewhere. anna: what about the strength of the dollar? the indication is a stronger dollar, and what has been driving? are we back to a yield advantage to the greenback? some conversations have become quite nuanced about how that yield is or is not going to be eroded.

like community banks and regional banks. while i am sure you compete for services, do you not also provide critical services to many smaller banks and institutions? >> yes, we do. we engage in a number of activities for them whether it is raising capital, helping them manage their liquidity, providing various forms of financial advice, and being there as a participant in the markets. smaller financial institutions don't have the technology, some of the capability that the large institutions are blessed to have have. we provide financial services for banks of all shapes and sizes. national, regional, banks and every bank sitting at this table is a client of our bank. >> very good point. i also serve as the ranking member on diversity and inclusion. mr. moynihan, who drives diversity and inclusion at bank of america? mr. moynihan: i do and the other team management members. aboutt people talk diversity and inclusion as an hr issue. why is it important to you as a ceo? placeynihan: we want to and a company to be the best place

so basically what is the purpose of this bank is it like china's development bank.yes it is to have a good relation. to help russia or maybe to ease some of the same because maybe some people can come to the bank who would put it where you. had to go in diplomatic states. which of us would be difficult to do so so war. you need a political gesture for them and it has also led government in. the small and it is in that you may be you know because of the political impact but it's difficult to see. you know from the from the university or from some. but most likely this this is the fact the opposition is calling this putin a trojan horse if you like because it gives it gives the russians this unprecedented opportunity to enter the e.u. through this route and the argument goes that this this creates a serious national security concern is that a legitimate concern you think. oh you know that's. typically already done. the loss of disclosure so. impair you've already lost darkly you know they know a lot of these two zero two moves across borders. do. you know where the el

banks, national banks, and every bank sitting at this table with me is a client of our bank >> very good point i also serve as the ranking member on diversity and inclusion. mr. moynihan, who drives diversity and inclusion at bank of america >> i do and the other management team members drive it. >> most people talk about diversity and inclusion as an hr issue. why is it important to you as a ceo and to the business? >> we want to have a place, a company be the best place to work we want every teammate to come to us and be able to see, no matter who i am, when i come in the door, i can be who i want to be -- we're 50% women, 40 plus percent women managers in terms of people of color, we're 45% overall people of color, 37% people of color managers and we continue to watch that in every unit and every business review, are you making progress of the goal of having our company reflect society at large. but importantly, we want to make sure that people can go from that entry job to our jobs and that's what we're describing. >> thank you very much my time is expired i yield back, madam ch

like community banks and regional banks. while i am sure you compete with other banks for some services, do you not always provide critical services to many of the smaller banks and institutions? mr. gorman: yes, we do. we engage in a number of activities, whether it's raising capital, helping them manage their liquidity, providing various forms of financial advice, and being there as a participant in the markets with other financial institutions. a lot of the smaller institutions don't have the technology, some of the capability that the large institutions are blessed to have simply because of their scale. mrs. wagner: ms. corbat? mr. corbat: yes, we provide financial services for all banks sizes, community banks, regional banks, and every bank sitting next to me at this table is a client of my bank. mrs. wagner: very good point. i serve as ranking member on committee of diversity and inclusion. that?ynihan, who chairs mr. moynihan: i do. mrs. wagner: most people talk about that as an h.r. issue. why is it important to you

bank and other banks, now they say why don't i go with jpm, bank of america?hose are the main forces. jason: let's talk about the proposed merger, it is out in the open, you have the german government playing some sort of role. they are being coy up to chancellor merkel. where do we see this playing out? this is not strength on strength with these two institutions. >> the whole premise behind a potential merger of these two institutions, these week banks form a strong bank, which critics say that does not really work, that does not compute or add up. your you have a situation where the alternative, letting them continue on their own might be worse. that is the issue. those of these banks need some kind of transformative change to get back on their feet, to get on stronger ground. this is a swing for the fences type of decision. that is why it is difficult to say at this point whether it happens. it seems like the momentum is for some kind of merger, but there could be cold feet. the number one issue is political. if these two banks come together, chances are t

deutsche bank trending down. iag is the worst performing bank in europe. down 3.83%.as ok, but there are other elements within the bank that were not. barclays suffering from that. the agm is coming up, there is the fight with edward bramson worth paying attention to. being rescued by asian clients putting a sizable chunk of cash into the asset management division. let's move on and talk about what is happening with some of the other banks. the battle for 5g is raging. it is nokia, it is ericsson, it is one way -- it is one way -- it is huawei. nokia is taking a hit. the numbers are expected to be better. at this stage in the 5g process, maybe that was an oversight. we have seen the merger being called up by the regulatory authorities in the u.k.. faces,f egg on a lot of particularly the guy who runs the business. i mentioned one of the businesses helping out the german market, it is bayer, the stock trading up 1.56%. approachup or granular needing to be taken. dollar the macro overlay strength story still worth paying attention to. vonnie: it is interesting you end w

banks if we only had big foreign banks how do you feel like big european banks were state owned banks in china would do at helping us enforce american sanctions against bad actors and rogue regimes around the world, for example iran. >> they have to be executed by the banks in america. because we move all that money and we do exactly what they tell us to do the second thing is you have to have a reserve currency so the strength of america and the banking system. >> so well if you agree that having large financial institutions is good for america's national security? can you raise your hand if you've agree with thayouagree w? let the record reflect everyone raised their hand. because cyber was such a consensus item i have time to address that issue now. what each of you agre would agre that a static standard does not work, a government standard that sets the standard today but tomorrow is outdated almost the day that it's effective, mr. diamond i will let you start with that one. >> it changes every day and it is critical. >> while i have 55 seconds left, i want to mention anti-money l

investment banking revenues down , but the investment bank has been on the edge.ent, they are seeing record inflows in asia. when this comes down to putting that money to work and clients regaining confidence, that pretty much got stymied in the fourth quarter. it carried through in the first two months of this year, but his tone was very much upbeat, but one of cautiously looking at the data. is not ready to rip cost out yet. he will do it bit by bit. if he needs to, but it was a very measured tone in terms of the slight recovery that we see and if that reaches some kind of escape velocity, we are not there yet. as he said, it was more normalization rather than a conviction term on both sides of the business. >> interesting. jonathan has already been messaging me talking about that investment tank operating income only down 27%, better than what has been talked about. that is some of the context he has been giving me at least. also, you talked about dws in that interview. what else did you talk about in terms of m&a? >> when you look at the in a story, they are j

plans to take a large stake in commerce bank if the ongoing merger talks with deutsche bank fail. unicredit has declined to comment, but reuters has reported that they have disagreed about the pace of those merger discussions the commerce bank wants discussions to be quick while deutsche bank wants to go slow my colleague is on the phone in frankfurt, and anetta, do you know there might be fewer regulatory objections to a commerce bank tie-up with uni-credit as to one with deutsche >> i'm not sure how it stands so many regulatory for commerce bank and deutsche bank merger, because clearly, those who are arguing that they would have a machine oply on the german retail market are clearly wrong because you have to look at how big the savings bank and cooperative banks are in germany, so there wouldn't be dominant player in that market there might be perhaps an investment banking specific niche where there could be a dominant player, but i guess they wouldn't be big enough to block that merger. the hurdles are somewhere else especially those are the hurdles that are come from the trad

thought to bank and comet's bank have collapsed what it created germany's biggest financial institution but it seems the operation would have been too costly and complex. berlin wanted it to happen but that wasn't enough to unite the two german giants but yes torture banks said right from the beginning we would only go into these this word sure if it makes economic sense if it is beneficial for shareholders and for the stakeholders this was not given here after very deep conversations and talks with comments but we came to the conclusion if we put chances and wrist against each other that we should stop the talks about this merger know the government's hopes of the two banks combining to raise a powerful national champion for germany's finance sector the proven out of reach bank and comet's bank have concluded the benefits would be outweighed by the risks the restructuring costs and the capital requirements they both struggled since the global financial crisis with the german state still owning more than fifteen percent of comments bank the argument for merging was that it would cut cos

american banks have a lot more capital than chinese banks. the biggest chinese banks already earn more money than us. not a direct competitor today, but they are coming. not just them, but the japanese as well. it adds so much more capital. at one point, it will be a huge this advantage for everyone in my seat. over time, we should be considerate. we want the best banking system in the world. rep. waters: the gentlewoman from michigan is recognized for five minutes. >> thank you all for being here. every day, my residence in my district-based environment all hazards that threaten their ability to thrive. for students and one elementary school in my district, this means increased absences because of asthma attacks caused by pollution in the air. i want you all to let that sink in. kidsir is too polluted for to be able to go to school and learn. our countries over reliance on fossil fuels has a disproportionate burden on poor and vulnerable communities like mine. pollutersdirtiest exist side-by-side with neighborhoods, neighborhoods i grew up i

shadow banking? at credit formation outside of banks in the commercial space, it has been faster as a percentage over the last 10 years. the share that banks have of corporate loans has gone down about 10 percentage points, so it is a factual statement. alix: is it a risk in the same way he said? issy: i think the question is it systemic or not. when you have smaller pockets of lending outside of the banking system, that is where the question is. what is the blow to the financial system? i think people are thinking about whether or not that is the case. david: should we be concerned that the reason it is being done is to get a lot of -- to get around a lot of the financial regulations and protections built after the financial crisis? betsy: when all these rules were being put into place, one of the things people were mentioning is you are going to squeeze credit into other parts of the market, so i don't think that was an unexpected, unintended consequence, but from where i sit, i don't see the risk

banks just too much profit is too high how that. well in the end banks are tense action costs of the economy and so if so much of the of the surplus of the economy flows into bank profits so assuming it's not a good thing in the united states it might be due to some degree to the fact that companies need to have access to the capital market and that's a company standing between them and the banks so they make a nice profit from standing in between present europe we've got a wide range we've got banking based system we've got a couple of market based systems and there are alternatives and there are strong competition as a consequence of bank profits are pretty low all right so this is still here in europe is somewhat different to the one in the united states what does this mean for european banks what can they do to basically get back on track. luckily very little they're trying to be as efficient as possible at the very moment they start to become global we have to play it was americans and america is simply much stronger based on t

firstly, danska bank and that's trading at the bottom. it saw a difficult start to 2019 as it report a first quarter net profit of 3 billion danish krone. the lender warned its 2019 outlook is subject to uncertainty and macroeconomic developments as it forecasts net profit for the year in the range of 14 billion to 15 billion danish krone danske bank says it remains under investigation by danish estonia and u.s. authorities all regarding alleged money launder, but it's unable to give guidance on potential fines trading lower to the tune of about 6.7% i want to take you to standard charter, though, where it's a different story. shares here trading higher about 4% after they unveiled a share buy back program of up to $1 billion. the asia-focused lender announced the plans after it posted a rise in first quarter pretax profit as its turnaround strategy appeared to bear fruit. ceo bill winters said in february he plans to double returns on tangible equity and dividends by 2022. >> set aside the korpts for the moment now look at several counti

they are concerned about this big bank. deutsche bank is the biggest investment bank in europe.ng it with commerzbank, another sizable bank, would create the fourth largest bank by assets in the euro area. they want to make sure they don't have an even bigger problem on their hands. they are always concerned about the case when they would have to wind down a bank, and he bigger ones are usually more difficult to wind down. they want to make sure it is safe. they want to see adequate capital buffers and a good business model before they say you can go ahead with this deal. vonnie: part of the problem might be that if there were to a some kind of crisis, would combined bank be too big to fail? we still haven't solved that question yet. with the ecb feel responsible if it were to allow this merger to bail-ou, to then be the ter if necessary? steven: it is difficult to say. the crisis a decade ago brought home to everyone how big a problem it can be for national economies to have big banks, and how big a burden it can be on taxpayers to bail them out. that is exactly why the ecb tod

including the investment banking of bank holding companies. still, congress insists the preferred form of resolution is bankruptcy. it required that the largest firm submit living wills that describe how they could be resolved under bankruptcy. it requires banking firms to change the organization structure necessary to facilitate resolution. the federal reserves taking these seriously and work with the largest banking organization on the resolution plan. working with the industry as a federal deposit insurance corporation have thought through how liquidation of a systemic firm could be accomplished under bankruptcy or using orderly liquidation authority. but the orderly liquidation authority is difficult given the complexity of systemic banking firms and their global reach. it requires coordination across countries and it is untried and unproven. moreover, congress has periodically threatened to repeal orderly liquidation in favor of bankruptcy approach. an approach that in my view would be completely unworkable. my strong preference would be

arounddeutsche bank and commerce bank. shaerz in commerzbank are trading lower following two reports suggesting deal talks between the german lender and its bigger rival deutsche bank are on the brink of collapse reuters and the financial times say the tie-up talks between the banks which have now gone on for six weeks are expected to break down due to integration risks and opposition to the complex merger what are you hearing on the ground in frankfurt? >>. >> they actually still are discussing whether they go ahead or whether the deal will break apart. that's what they are waiting for. it could happen, actually, literally every minute that we get an announcement that the talks fail or the talks will go on clearly there is an increasing amount of deals. apparently the regulator is asking deutsche bank to raise fresh round of cash before any potential merger, and there's a hunl amount of capital need apparently if the two banks were to merge of course, their assets had to be re-evaluated, and that would mean that there cou

banks for that matter.elations. guy: where does this go next? two committees issued subpoenas. they are trying to find out financial details and trying to connect him to the russians. is u.s. financial system under investigation, how they used it to their advantage. marty: it is the duty of financial oversights to make sure they are not being misused purposes for political . there is a valid reason for them to ask for these, however yesterday eric trump tweeted a hostile comment. tom: he was quite visceral, saying it was in abuse of power. does young trump have a case? marty: it probably is not true that it is in abuse of power. congress has oversight over financial institutions and how they are being regulated, so in that context, they do have a valid case for seeking those records. go into acan't do is fishing expectation -- expedition and open up of can of worms but does not relate to the election. mr. do we have any idea how mueller feels about the ballet over the mueller report? is he happy it will be

and not just the banking system. for threats to financial stability that might emerge and could be responsible for a future crisis. crisis. so let me now talk a bit about each of these areas. i'll start with monetary policy. with respect to monetary policy, my focus first and foremost throughout my entire tenure was on jobs. as you know, the financial crisis took a huge toll on the american economy. unemployment reached 10% in 2009. which is close to a post-war high. and nine million jobs were destroyed on net. in addition, many people who lost long-term jobs dropped out of the labor force completely, giving up hope of ever finding work. a large share of the work force also found themselves stuck in part-time jobs, when they wanted to work full-time. the african-american unemployment rate stood at a not very low 8.3% in 2006, it rose to a horrifying 16% in 2009. so my focus, and the most important priority, was to foster recovery of the labor market, a return to full employment. it's difficult to determine when the e

the third is the banking story, deutsche bank being a once upon a time bank of germany, and became an international bank. now it is grappling with the size it is supposed to be. jason: wide-ranging implications in germany and the global financial system. ed robinson brought us more. >> these banks of the twin pillars of the commercial banking system in germany, so they are vital institutions. they are also weak institutions, both banks have struggled to generate revenue growth, profitability, to show the kind of strength and resilience a lot of european banks have started ofproduce after years recovering after the crash. it is funny, but it is the german banks which many would think would be the strongest that have become the laggards in the european banking scene. >> why? what happened? you are right on both accounts. the assumption would be these are strong german banks, , itsche bank especially should be at the heart of the financial system, yet it has fallen by the wayside relative to its big u.s. competitors. where did they go wrong? >> looking at deutsche bank specifically, it e

banking model.tion is how much patience will investors have for this transformation? >> i think really you put it into context the stock was up about 4% on friday just gave that back on monday. it's not a disastrous result it's going to be a very long process. i think the thing that pointed investors yesterday in particular was the fact that the centrality eejic review will be fundamental to understanding how the transformation will take place. it was pushed back by a year that means people will have to wait another year effectively. they're not really know what the direction is and they understand how that's going to change the business that's the point from yesterday. >> if you look at the traditional businesses, i mean, you know, they were down in three businesses flat in the fourth business. the only reason they beat on eps is because they cut expenses so much you know, they had instituted the buy-back a lot of these are one-offs. the core businesses really seem to be struggling here. >> well, i

medium banks. what this graph shows again, you don't have to read the details, on the left, there was a slowing but continued increase in the growth in credit from the largest banks and on the right, you can see there's an actual decline in shadow banking credit from the smaller institutions. so that had an effect. but it also meant that it hit particularly weaker borrowers. here, what you can see is this is 2014, '15, '16, '17 and '18. those bars show you the amount of defaulted debt. the green line shows you the yield spreads between lower -- between low credit private banking -- private bonds, and base government bonds, central government bonds. so you can see the yield spread increased, in other words, the cost of credit to weaker borrowers relative to government debt expanded, so credit became relatively more costly for weaker borrowers, and there was a substantial increase in bond defaults. so this has produced a winnowing out of weaker credit. but it also meant that bank assets which i alrea

when the bank wanted to deregulate again, they trotted up the state chartered banks. i do think it can be misused but if we took some of the campaign money ou out of that the creatin we could have real debates. i remember in the regulation listening to some senators that the plaintiff you have local thinks it's good because they know you and if you run into hard times they can be more accommodating and if it is true but then they are not going to give you money unless you want to the country club and it's better to have these impartial entities that are only going to give you the credit based on facts. that was true also. the question is how we make the regulators are a better job. they are doing it again they basically said shut up and sit down when it comes to the consumer protections they went to the supreme court and now they rolled it back a little bit and allowed the states to stand shoulder to shoulder that they are proposing a national charter for financial institutions in the kick thinking why would they want this and then it on on me it's so they don't have

of the bank.rt: it is difficult to know right now what changes you want. at the end of the day, what they really want is a merger that makes sense so you can garner economic synergy, but also have more on the balance sheet to spend all the money you have to spend on new technology to keep you in the current environment. national hogan of holdings, you will be sticking with us. the market is digesting a legal surprise, meaning they've ignored it. this is bloomberg. ♪ david: facebook announced strong results for the first quarter after markets closed yesterday, beating estimates on sales and earnings-per-share. we welcome now on the telephone michael nesson soon -- michael nathanson. he has just raised his price target to $210. hogan with- art national holdings is still with us, as well. michael: the only thing we are dangling on with risk is regulatory in the future. what is going to happen around the world was regulatory, and what is the impact on revenue? results were really good. the question is

when we look at europe there are five thousand five hundred banks in the e.u. that's a huge number when you compare that with other regions including america that's a large banking density especially in germany we've always said for dogshit bank when we stabilized when the balance sheet is solid again when costs are under control again when we've turned the first profit that we have to be more profitable but we want to go down this path and then we'll be in a position to be an active player in consolidation in europe as well. let's talk tech now facebook saying it expects u.s. regulators to find it between three and five billion dollars for the data scandal involving political consulting firm cambridge analytics or the penalty would be a milestone in the u.s. which is avoided going after home grown tech companies unlike regulators in the e.u. and the biggest us find to date twenty two million dollars against google in two thousand and twelve replacing cookies on safari internet browsers that pales in comparison to recent you finds a total of nine point two bill

vonnie: what is the take for the major banks? -- takeaway for the major banks? investors are sounding off on the news just a little bit. there's a sense that it's just not good enough. >> is it ever? it is kind of a mixed bag. you're looking at a good quarter but the question is is this as good as it gets. a more forward-looking fear of what's to come i guess. guy: thank you very much. the european banking season beginning to start up. , formerly an executive board member at the ecb, now the the chairman of -- now the chairman of socgen. he said the idea of negative interest rates might be a good idea. >> if i look at japan, if i look at switzerland, they have a theory that reduces the negative impact of negative rates on the economy. that is something i have to look at. guy: lorenzo potentially talking his own book a little bit there. he's the chairman of one of europe's biggest banks. we will get a take on this from bloomberg news. let's talk about this negative rate story. one of the concerns is that european banks -- we've just seen the u.s. banks producing

the democrats want to know why trump and door to bank had such close ties. to the russian ship with no actual bacon's as usual what would they will do and billions of dollars he filed a lawsuit against him oh no whether they would legitimacy but they have done so why was this happening i think we need to ponder. that democrats are also examining whether donald trump is financially dependent on russia they believe money laundering could be involved and tortured bank may have made such transactions possible frankfurt based lender has already handed over some financial documents regarding the u.s. president to investigators and plans to continue doing so deutsche bank said it would have by by all court orders related to the probe yes court that joins us now from new york and it's good to see you now the richer bank has agreed to cooperate with the investigation but cancel a lawsuit actually stop it from handing over the chumps the trunk family's financial records. yeah it's not so much about the lawsuits itself a dodge a bank is sort of caught in the middle of

does it mean deutsche bank has to make more cuts to its investment banking unit? first, let's turn back to the trade story. saying thei jinping belt and road initiative has created new opportunities and will a global growth. he also pledged to clean up the initiative. it faced criticism of her lack of transparency and claims that it is indenting -- endebting foreign nations. >> china will not resort to the practice of renminbi devaluation. we will continue to improve the exchange rate regime. the market plays a decisive role in resource allocation and we will keep the exchange rate basically stable at an adaptive and equilibrium level. these steps will ensure the steady growth of the global economy. jinpinghat was xi speaking in beijing earlier today. the comments set the yuan rallying, before paring its gains somewhat. joining us now is the chief investment strategist for northern trust asset management. great you have you with us this morning. i have discussions on most on a daily basis about the outlook for china. you are not so convinced at the moment that the

you had good numbers from jpmorgan and wells, the bank earnings. you had a big deal in the oil sector, chevron acquiring anadarko for $33 billion, $65 a share on anadarko. it seems like you've got more and more good news coming out, and i said this last week, everybody's got their head on fire looking for this recession. it's not happening! >> you also have credit spreads that have tightened dramatically, so how do you have a recession when credit's flowing that way? i think the caveat is still about the trade war. that could change things. but it's not just that 2019 doesn't foretell a recession, it's that 2020 doesn't foretell a resession. right now unless you have a total evaporation of business investment, the economy is working very well. and a couple of the other positive metrics you didn't mention in that great list is wage growth with. maria: yeah? right. 3.2% year-over-year. >> and it's really going to tick higher to 3.4% this year, we brief, and there's productivity that is absorbing it, so we just think you have a great u.s. economic bac

ideally all of these mega banks are the amalgamation of smaller banks you're actually seeing b b t sun trust merging now the better idea in my opinion is to break them up into the smaller units they once were i think that was served shareholders i think that would serve the consumers i think that would serve employees as well so on the topic of big bang noise or bang and commerce bank two of germany's top lender banks were and merger talks for six weeks now but they just reported that merger the merger had collapsed what happened well this is this merger grew from the conceit of the german government that they want to stable mega bank the problem is both of these are our wounded entities and having them lean up against each other isn't going to really make a solid bank again deutsche bank decided that it was going to gamble the way the american banks were and that proved disastrous from two thousand from two thousand and eight we saw that it collapsed and it really hasn't recovered again i think you see that in germany employees have a much greater say you saw them voicing their anger

banks in white, european banks in blue.e some point with the price adjust gets so low that it makes sense to buy european banks? >> i guess it depends. if you have a long enough time horizon now is probably ok but isis next in the short-term they will be quite volatile. evaluation of the european banks is very attractive but you need and continued week news flow, particularly around the litigation -- it is unhelpful to the sector and i suspect you will need to get more hawkish comments out of the ecb and an indication that rates will be moving negative before you have the full value potential of the european bank. >> let me ask you what is ahead -- is that bank of america today and morgan stanley tomorrow? >> that's right. >> what are we expecting? >> we are expecting bank of america to put up some decent inbers in morgan stanley terms of the black box aspect of scales and trading -- that will give you the swing one way or with j.p. morgan better than expected. it's a tough sector to hit because so much of their results are

and then some banks. you was earnings season, bank earnings kicked off with j.p. morgan today.t goldman sachs tomorrow. we get bank of america and, morgan stanley wednesday. lloyds is one of the gainers. ing is a gainer. unicredit, barclays adding to the stoxx 600. there's publicity's at the bottom. a lot of times after an acquisition, companies will fall. investors like this move to buy and focus on its online presence. look at the losers here. nestle one of the big losers, but that's not a defensive stock sold off out of market fears. that is ex dividend. that's the reason that stock is up there at the bottom. in terms of the other losers, you see roche, novo nordisk, astrazeneca, the health care stocks really doing poorly today. see diageo down this morning. arepean markets in general opening a little bit higher. the dollar edged lower against most major currencies, as well. this follows a report the u.s. has softened demands for a trade deal with china. joining us is jeremy stretch, head of fx strategy. all, what do you take of a trade story? good morning. every day, it see

season for the banks. this is not unusual three or four days before jpmorgan and wells fargo report to sell into the banks. that's number one. number two last couple days yields have tend to move to the downside and banks and the stock market have become extremely sensitive to yields in fact, really, we bottom the yields at the end of march and you can plot yield ten year and take any of them take a ten-year yield against the s&p 500. if you put that up in the last two weeks and they track pretty well as yields started moving up, stock markets started rallying and then the last couple days as yields have struggled, the market has struggled overall. so, two reasons why the banks have nothing to do with the committee hearings the other thing i would note today. the dow went negative early on that had nothing to do with the banks. it had to do with the big industrial names boeing, caterpillar, 3m, united technology all moving to the downside a real problem overall for the, mats again, these were global growth

globally because banks of the banks.m the money that i is putting through peoples deposits and loans and credit that they require for themselves into small businesses or what have you from the more speculative activities banks to do because without doing that, it's important to make that split we will have a situation where the federal reserve and others would have no choice in their mind and in their policies but to continue to subsidize the very risk that these institutions place upon society. .. >> cares for them and praying for them. >> at that time columbine had ever happened near the parents nor the school counselor look at the violent issue that was a possibility of deterioration of thinking

banks, if we only had big foreign banks, how do you feel like big european banks or state-owned banks in china would do at helping us enforce american sanctions against bad actors and rogue regimes around the world? for example, iran. >> the sanctions have to be executed by the banks in america. it's because we move all that money and because we do exactly what ofac and treasury, they tell us what to do, but we have to execute it. the second thing is you have to have a reserve currency, the strength of america and the strength of the banking system is the reason you can effectuate sanctions. >> so would all of you agree that having large financial institutions is good for america's national security? can you just raise your hand if you agree with that statement. let the record reflect that everyone raised their hand. because cyber was such a consensus item, i have a minute and 24 seconds to deal with that very important issue now. would each of you agree that a static standard does not work, a government standard that sets a standard today that tomorrow is outdated, almost the day it'

the fed's chairman planning to save local bank -- federal bank will not out to local pressure. the ideal to go public, what could be one of the biggest listings of all time. on disney's big bet streaming current disney disney the details of plus, to rival netflix, but will consumers buy in? ♪ welcome to "surveillance." i am nejra cehic in london, in for francine lacqua. a pause little bit of for thought in the equity markets with a little downside in europe. the stoxx 600 down by .25% after two days of some strength. performing well against and it is, up .3%, heading for a weekly loss. heading for a weekly gain, though, is wti. supply concerns out of libya and venezuela. prices were up .4%, trading at $63.83. and brent holding well above $70, at $71. coming up on bloomberg, we have european commissioner for economic and financial affairs. you can catch that at 5:30 p.m. london time. this is bloomberg. first word news with viviana hurtado. viviana: hi, nejra. look at these $3 billion operating loss last year for uber. poer has a lot riding on the i while the company reaches a $1