bbva is the bank we are focusing on. the international lender most exposed to turkey and he shares are lower, no surprise as you see there. taylor riggs is joining us to talk about the move in bbva. taylor: i'm just going to call it bbva for today because i don't have your good accent. it's really interesting. they have some of the biggest exposures to turkey. a third of their pretax profit comes from turkey. 17% of their revenue comes from turkey. we have up high chart showing that so it's the fourth-largest contributor to revenue now from turkey. what we're hearing is not necessarily the lira's impact but more of the worsening of the credit quality that could start to impact their bottom line. they come out with earnings over the next few quarters. currency soign their non-lira bad debt has swelled fivefold to 2.7 billion lira. you are just getting a lot of concerns now about the debt profile. come into my terminal here at gt tv with that spread and how it's impacting markets. it was off about 20% the five-year. 1

bbva was very clear saying it waned to stem inflation.erbating the inflation problem. >> we can't underestimate -- when you don't need rhetoric, talk about the actual numbers. before today's move, currently 6.5% lower versus the greenback as mentioned the turkish lira versus the dollar is down 69% year to date. month to date, 30% week to date last week, 26.2%. >> the stock market as we know in bear market territory we had a 17% fall in the course of year to date from friday. down another 3 plus% today close to that left we're announcing a selloff of close to 20% let's get to other markets for you. safe havens -- japanese yen has been where you've seen strength. stocks by comparison falling sharply. hitting a one month low due to concerns over turkey as investors pile into the safe-haven yen we're joined with more from the ni nikkei talk us through there. >> the nikkei index finished 2% lower today continuing to slip for the fourth straight trading day. stocks sold across the board with 90% of all shares traded at the tokyo stock exchange

those would be bbva and unicredit. annmarie: fairly large is right. bbva owns over half. earns about 40% of another turkish bank. much.thanks very we are going to keep an eye on those assets and everything related to turkey. joining us now from ingres -- anchora. the lira taking a battering. what is the latest on the turkish response to this. are the institutions like the central bank or the president willing to do something about the slide in the currency? we expect turkish finance minister, treasury finance minister to deliver a speech where he is way to outline his new economy model later today in a sample. what exactly his model is going to look like is anyone's guess. we know that he is going to be outlining some measures to tighten turkey's fiscal policy in may be lower growth envisioned a little bit for this era next, which might be somewhat welcome to investors who are worried about the turkish economy being overheated, which is part of the problem we are seeing right now in markets, the panic in markets. is that exactly going to stop the panic in markets, is that

these are your headlines >> unicredit, bnp paribas and bbva sell off after the ecb is looking at their to turkey >>> the turkish lira tests fresh lows against the dollar. a rout in the currency is also spreading to the bond market. >>> the ruble also falls the russian prime minister says moscow will consider it an economic war if u.s. economic sanctions target banks or currency access. >>> and novozymes trades at the bottom of the stoxx 60 after missing earnings the ceo said the forces at play are not what he expected >> we had a satisfactory first quarter. the mix of factors pulling on our business are slightly different than what is expected. we have weakness in household care, but the balance of that is >>> hello. welcome back to "street signs. we're getting gdp figures from the uk for the second quarter breaking here. for that second quarter we are looking at quarterly growth of 0.4% that is bang in line with the forecast for 0.4% on the quarter as well. on the year we're getting a figure of 1.3% that, too, is in line with forecasts. when it comes to some of the breakdown reports o

spain's bbva is most exposed, with turkey accounting for 13% of its loans.'s unicredit, the netherlands‘ ing, and france's bnp paribas are also on the hook. dr ali burak guven is from birkbeck university of london. first of all, tell me what you think is the main cause of what's going on in turkey right now. what is behind the financial turmoil that i think you summarise it fairly well. turkey has had a fairly unsustainable growth model for many years now based on high current—account deficits, consumption —based growth which made a very foreign capital to panic, and on top of that we have had some political strain in recent months. having said that, for a long time this was not an existential issue for turkey, the growth model itself, because turkey stuck to fiscal discipline, it had a very predictable policies that, in the international markets were flush with liquidity. all those preconditions have now fully shifted and that exposes turkey to all sorts of problems. that shift, how do you think we can re—calibrate things? what you of the potential medium—t

among them, bbva, unicredit and bnp paribas.ets, including asian stocks, amid turkey's currency crisis. that's all the business news. i'll be back with more throughout the afternoon. a killer whale has stopped carrying her dead newborn calf, 17 days since she was first spotted off the coast of vancouver island. the mother, known as j35, covered 1,000 miles during this record breaking mourning period. killer whales have been known to carry their dead for a week. we've been hearing from richard sabin, principal curator of mammals at the natural history museum, who told us about the importance of the bond between a female killer whale and her child. we are finding out more and more about killer whales as the years go by. they are incredibly complicated in terms of their behaviour. genetically, they are different. across the ocean, they have different patterns of feeding, communication, the way that they transmit information from one generation to the next. we are learning things all the time about killer whales that, actually, some

in turkey, guarantee banks 50%-year bonds are yielding by bbva.a, you are seeing things down 50%. in south africa, domestic stocks are attractive. as long as we don't get this massive acceleration to the downside. david: we have a question from a viewer. it is a question on a different kind of contagion. were capitalally controls in turkey come what would the effect be on emerging-market assets outside of turkey? would it affect other emerging markets? alicia: that is a very good question. emerging markets tend to be supremely sensitive to one another in terms of investor risk appetite. it is a question of shoot first and ask questions later. if turkey imposes capital controls, which we don't think is the most optimal way to handle the situation, you will see a ricochet effect throughout global emerging markets. the risk appetite is gone along with the lack of liquidity from g4 central banks. your mechanism is a stronger u.s. dollar. that is a problem. alix: which country fundamentally and economically is more similar to turkey that really poses s

bbva leading declines today. this is bloomberg. ♪ retail. under pressure like never before.t's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ from bloomberg's european headquarters in london, i am mark barton. stocks finishing the friday section -- session lower. the biggest decline for banks since may the 29th. we have the report that the ecb has grown concerned about the exposure of some of the eurozone banks to turkey following the lira's lunch. paribast, bnp particularly exposed after the currency lost one third of its value this year. the ecb's supervisory measure has begun to look more closely at european banks tied to the country. the watchdog does not see the situation is critical, but turkey contagion felt across all of the sectors on

particularly some european banks have seen a contagion risk outside a few banks, some spanishlenders like bbvapean financials are at a 15% discount to the broader market there's good opportunities there. companies like ersta bank, a fantastic austrian bank will benefit when we see rates rising in europe. but also it has strong loan growth because of exposure to emerging markets >> i want to ask one more question about europe. in terms of geopolitical risk, when harder sanctions come into play on iran in november, there will be slight impact on some european xhacompanies. anything else you look at that could be a risk for performance in europe? >> italy is the big one. we have the budget in september. i know a lot of focus has been on turkey and the contagion risk, but for the financial sector it's italy the one to watch. >> you'll stay with us for another part of the show, but appreciate what you're saying there. >>> amazon is reportedly considering launching a uk insurance comparison site. three industry executives told reuters they held talks with amazon about contributing products to a poss

bbva getting a bit of a bright spot.n 2%.re it confirmed its dividend outlook and reduced its net burden, a positive. 560 million swiss francs top 10 estimates -- topped estimates. for should allow a step up 2018. matt: thank you. a look at some of the stocks we are watching china -- watching. china's economy has hit a midyear rough patch. growth was flat, with a rise of 6% in july. retail sales expansion slowed to 8.8% from a year earlier. assets investment rose 5.5% year on year in the first seven months, the slowest pace since 1999. en, i have a great chart here that visualizes this. 8.8% retail growth seems awesome, but it is the tail end quite bluegrass pierre, -- blue graph here, quite rough. do you see this slow down, the tail end of the 2015-2016 slowdown, take hold? >> no. china is in a slower face that it has been, which has to do with the chinese authorities trying to rebalance the economy. we have seen a chinese authorities have seen the slowdown and are starting to react and ease policy a little bit at the m

bbva of course. this is the chart, the currency of the day the last couple days. dollar lira continue to move upwards . record high for the dollar. record low for the lira. as much as 9.8% to a low. yes we have policymakers in turkey today boosting liquidity, making it difficult for officer investors to shorten the currency but it has not stopped the lira decline, which is near seven to the dollar. comes after a slump of 14% on friday. biggest drop since 2001. 21%,y, the lira sank by worst week since 2001 as well. this year down by 45%. the president come brains that the present remains combative -- the president remains combative. we heard from the central bank about its disposal, some strategy saying the turkey central bank needs to hike basis points. we will see if that is to come to pass in the future but the liver continues its slide. this is an example of how this turkish selloff in not just the lira but bonds and stocks is spilling to other asset classes. something extraordinary happened overnight. we saw a big move in the rand. this is dollar rand overnigh

they have been sold off, particularly bbva.f been overdone it sounds like you think it has. >> we are not buys the sping ba. we like the french banks i think maybe there's a 5% impact, worst case scenario the market is down 10%, the capital ratio of bnp is 11%. so it's a safe bank probably being hit too hard now i wouldn't chase the spanish banks yet. but the french banks are more of a sweet spot >> might have been a case of sell first, think later. i want to focus on one country specifically all the major markets today rose except for one, italy. the country has structural, political problems, debt problems they continually change administrations. italy falling 1% today while everything else rose are you worried at all about italy? italy unlike turkey is a massive global economy eighth biggest in the world. >> it's a significant european economy. i don't think the tail risks will come to fruition. you have a party that's popular now in place that has got different agendas. the market doesn't like uncertainty. i think they'll c

generatesk bbva something like 35% of its pretax profit out of its franchise last year. so they have a lot riding on this. it is an admittedly big spanish ank, not the prospect of eurozone crisis. all of turkey passes private sector liabilities are kind of greek side or $200 billion plus, give or take. much is not hedged. it is risky but we are talking about a greek style problem rather than an italian style problem. for turkey itself, it is a huge problem with a huge country of 18 million people. >> us the option is to just wait it out, because it is not interest rates, it is not what is the pain going to be for waiting it out? reasonably the companies that borrowed in u.s. dollars and the people suffering under revenue inflation. >> this is a bit like hungry in 2000 today. all of thoseowing, people are hit and then the inflation will hit in the second round as the foreign exchange feeds through. this is -- this is an energy dependent economy. where i think the questions of domestic stability are getting serious. joe: you mentioned it is unlikely they would get a copper

the financial times reported the sees bbva, bnp paribas has particularly exposed to the lira's plungeish lira fret -- plunged to a fresh low with concern about souring relations with the u.s. and runaway inflation outweighing a market route. the government said a groep -- set a growth target of less than 4%, down from 5.5%. lost around one third of its value against the u.s. this year. in japan, capital investment drove a strong rebound in japan's economy in the second quarter as companies turn to technology to cope with a labor shortage. -- grossrowth domestic domestic product expanded at an annual rate beating forecast. jumped 1.3%nding from the first quarter, the biggest increase since the fourth quarter of 2016. donald trump's lawyers continue negotiating with robert mueller over being interviewed. two topics remain off the table. fbi director james comey and trump's comments to comey about his investigation of michael flynn. the president's lawyer said if asked, trump would say he didn't urge comey to stop investigating his former national top security advisor and didn't fire com

the most exposed is bbva where you double the figures 10% of loans and 25% of the net income, which iskey. credit is harder to get, they use a different accounting method to report a turkish investment i would say about half of the dividend payment from the common stock comes from the turkish cash flow. >> walk through the permutations here the big thing that everybody worries about is the idea of contagion. is this something where you think this is literally -- i don't want to say -- around these three banks. how damaging is it these banks how damaging is it to county counter parties of the banks >> that exposure happened through a local turkish bank in which these banks have an investment let's say things keep getting worse. the turkish fear goes -- against the dollar the big mess continues, they can't walk away. they can ride out their investment, give the keys to the bank, the turki isish central bk they could be writeoff that won't be pleasant but there is limited liability even in the worst case scenario. >> it sounds like you're not that worried. >> no. i mean, i think a lot of

names like bbva and union credit sinking fairly sharply likewise deutsche bank and of course questions arise of how much exposure they have to turkey michelle, we just discussed this a bit with doug. i'd say there's a key difference really compared to the euro zone crisis and grease crisis yes, turkey is a bit bigger than grease but we don't have that contaji contagion risk to the bigger economies like portugal and spain. what is in question for many investors particularly foreign investors into european banks another reason to say why bother holding them that's why you see 4%, 5% declines >> greek sovereign debt was pervasive throughout many, many european banks and then when it started to sell-off politicians called the banks and said do not sell it because we need to intervene politically, and they held on until it nearly brought them to their knees. >> and more importantly it was the link to italian, portuguese, spanish as well. there is one other crucial difference as well from the euro zone crisis which is bad news for the turkey and that's why you've got turkey in a terrible pos

the spanish bank bbva is falling because they are worried turkish borrowers may default on foreign currencyrecast a 50% cut theyan oil exports when reimpose sanctions. in southern california, more than 20,000 people have been ordered to flee a wildfire coming dangerously close to their homes. one person has been charged with starting the fire. in northern california, crews announced more progress in what is the largest wildfire in state history. estimatesf england -- servicesnomy outlook was unchanged. global news 24 hours a day and a tictoc on twitter, by more than 2700 journalists and analysts in more than 120 countries. i'm sebastian salek and this is bloomberg. we hope to hear from the president of turkey. one of his two speeches today. youill have it for worldwide. we go to washington. kevin is our correspondent. get to the sunday talk shows. nancy pelosi, i guess the republicans never want her to leave and the democrats alike, what do we want her to do? is her dominance of her democratic party? depends on who you ask. the democrats are following the special election in ohio and they a