central banks around the world are working on this. what we are really working on is how do we incorporate climate change risks into all that we do? as christine mentioned, potential for monetary policy, bank regulation, financial stability. i would say very early stages of trying to work through what that means for our goals. from our assigned legal mandates, we do this work. quickly,or bailey, because i still have one more question and i'm running out of time. gov. bailey: i would agree with jay and christine on this. as we rethinking about investment in the recovery from covid, thinking about how we can do that and pursue climate change is very important. we have been listening to a european central bank online andrew bailey, jay powell, and christine lagarde. a wide-ranging discussion on a number of topics. we think they could all agree on, while the recovery is coming, it is uneven. madame lagarde focusing on the young and women and how they are being left behind. at the same time, a consensus that this was a first real test of the

central banks, asian central banks. tom: john normand, thank you so much.lways a wonderful brief here. he is with j.p.morgan. nasdaq futures green, red a green on the screen as well. dollar fractionally weaker. on central bank discussion, what a wonderful discussion with stephanie flanders yesterday, with leading central bankers. let's follow that at 10:00 a.m. with the leading central banker, alan -- adam blinder of princeton university. stay with us worldwide. this is bloomberg. ♪ ritika: this is bloomberg surveillance. 500a is joining the s&p exmouth as its largest ever new member. it follows months of speculation which helped the company valuations skyrocket to almost $390 billion. it will be one of the index's .ost influential members outlines widening losses and plunging revenue due to the pandemic. it is projecting optimism for rebounding demand when the economy does recover. the listing is set to be one of the biggest this year. sources tell bloomberg the company plans to raise as much is dollars. easyjet is extending terms of its u.k. government ba

given what larry has said, do you think that central banks, the bank of england, or other central bankse done enough to show that there -- that they are supporting main street, not just wall street? you think they are perceived to be propping up asset prices is a main tool of policy at the moment? factam concerned that the that the narrative about why monetary easing has been so strong in these particular circumstances, that narrative hasn't been made clear, so it is not surprising that people who have got away with the impression that the objective of central banks is to support asset prices, i don't think that is their objective. i can see why some people might think it. i thing larry is absolutely right in saying that the danger with central banks today is that they often give the impression that there is an all-purpose, too good institution. there is a problem in the world that exists, central banks have to step in and deal with it. i think that is a terrible mistake. i think janet is very compelling in arguing that the dual mandate tothe fed allows the fed pursue strategies of maxi

this is the central bank's panel, which is why it is all central bankers.nce,he christine lagarde said with able to next is additional qe and long-term lending into the economy. that,n get more detail on that could affect some trading strategies. jay powell, maybe they get him to talk about terming what the fed is buying. andrew bailey might suggest what they will do, because they are dealing with the possibility of a hard brexit. , if theyl, for the fed are going to let the economy run hot or for longer, what is that say about yield? paul: the fed has a lot of control over the short and of the curve. i do not think the fed is going to suggest they will be targeting the long end, but that is probably a step too far. they can allow the economy to run hotter. we have seen consistently from the third quarter on the u.s. economy outperforming economy spread the labor market has recovered earlier. i think the fed will be content to allow existing momentum to run its course. guy: mike, you mentioned it is important for financial markets. at what point do central

the banks they're going to bypass the banks and they're going to bypass government because so central bank the roof is the bank of america it's got all 3 branches of government it's going to be in just one branch town you don't need 3 branches just get one branch that's the drone power branch that's all you need according to the can tell you in our class that's all they need they need that and they need the supreme court right because the government itself congress and the senate don't lead they don't rule they don't legislate really they let you know the supreme court or the central bank so congress is authorized to create money but under this scenario they're out of the picture they're authorized as well to declare war and they haven't declared war and the last you know 50 years since we went on the standard so central bank is simply going to hit the print money it's going to go directly into people's electronic bank account and it's going to be of course surveyed pretty closely and it's going to be like a giant video game where are you get more money and if you do the right thing in the

of central banks ,tarting to squeak about that central banks see their currencies rallying and it's uncomfortable for them. i don't think a big dollar bear market is a stable equilibrium. i don't discount that we could see some short-term dramatic downward pressure on the u.s. dollar because foreign owners of u.s. assets have low hedging ratios. alix: you are going to be sticking with us. i want to break some news. abouta budget is looking $3 billion of deficit borrowing. it would also employ -- they would have to cut 40% of the subway surface workers. they need federal funds by late march to avoid these kinds of cuts to the subway system. 40% of the workers, that would be huge. they are forced to issue debt, it would be $3 billion of deficit borrowing. it's going to get messy particularly if we have no stimulus coming out of washington to help minas apologies and localities. this is bloomberg. ♪ >> there is still big support and the population. 80% something like that. this is not too bad. yes, there are some opposing it but that's how things are in a democracy and i think it is more areess most

alix: the other central bank that had a decision was south africa. nothing happened in terms of their rate decision. they left interest rates unchanged. as the country is dramatically trying to get any kind of money in investment and capital flow into the country, how is that going to happen? is there anything else in banks can do? is not a veryrica interesting economy. obviously it suffers from a different disease compared to economies like turkey. the problem with africa is fiscal. the fiscal trap and the debt load which is suffocating any possibility of short-term growth rebound. the central bank noted that and turned a corner long before the covid crisis. outlook, we had aggressive cuts in policy rates this year. the question is will they continue? we believe there is still a pretty good chance of further policy -- essentially, that does not sort out the fiscal imbalance. the imbalance will have to come down the road and this is the only way south africa will try to get out of the hole. and the philippines indonesia deliver surprise rate cuts ear

we are talking about central banks. the federal reserve and the ecb. the bank of japan, too.ant to jump in with a call from socgen on turkey. socgen looking for a 400 basis point rate hike the next meeting. 1025 is the rate right now. another 400 basis point height. looking for a move on dollar lire. looking for that to come down to 692. it is a big move. tom: i have not done the math on what the lira does but your math is right. they will overshoot the requirement, which is modeled a 12% or 13%. they go to 14 so they do not have to do it two days later. jonathan: thomas costerg, come back into the conversation. how idiosyncratic is the turkey story and how many other ems are going through a similar theme? right there it the question comes back -- right. the question comes back to confidence. we in different markets are likely we have deep financial systems and people trust the financial systems. it may be less the case in turkey. rates do not mean you have to go out and be blinded about where you go and put your money. that is the key take away. he careful where you put your

the central bank's primary tools will likely stay the same. lagarde: while all options are on the program, the have provenro's their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves. they are therefore likely to remain the main tools for adjusting our monetary policy. alix: joining us from frankfurt is paul gordon, who leads bloomberg's western european central banks coverage. bdp is getting the most out of that statement from christine lagarde. yields down. what was your biggest take away about how she said she would support the economy? single most important thing is the reliance on the pandemic emergency purchase program. the ecb has two purchase programs. the other one is the older asset purchase program. the pandemic one is more flexible and toward stressed economies. christine lagarde has said that is one of our primary tools and that is why btp is benefiting from that. guy: is this a tacit acceptance we are now in the realm of monetary financing? the bank channel is not workin

so we've seen kind of an increase in the mandate from the central banks and didn't a bank is a currencies are basic technology, they would allow them to tenshi even more fine control over monetary policy. so from their perspective, that's a good thing. but of course, that opens up privacy concerns, it opens up all sorts of other issues from other perspectives, and then to pay and where you look from there. the other factors are potentially going around the dollar system. so for example, china, you know, they've been at the forefront of launching a central bank digital currency. and part of it is just to make, you know, their currency, you know, potentially more competitive with some of their trading partners. because china's main focus is they want to be able to buy commodities and things like that outside of the current dollar system because that's one of their vulnerabilities at this time. we talked in the previous episode about banks are unwilling to lend. they hoard cas and small to medium enterprises software and the fed is now telling congress, look, you've got to address this with

well it's been the 2nd time in just over a year that the central bank governor was this missed and that is actually why some analysts caution they say it's not so much the problem is not so much who is leading the central bank the problem is rather that it is under so much political pressure by president to add one who is a strong opponent of interest rate hikes and his interference in the central banks decision in the turkish judiciary has severely undermined confidence by investors by businesses and that is something that cannot easily be restored or repaired or you leave something aside from the policy matters what are the currency struggles look like for normal turks in their daily in their daily lives. well it's really striking how much people here in the country are focused on the exchange rate as they see their currency is losing value by the day now i mentioned inflation is high it's at 12 percent a currently so that is something people here really painfully feel in their every day lives in their pockets when they do their daily shopping when they pay their water or electricity

and so this is something central banks have started to engage in of the last 45 years. why as an investor, what would i, would i pay a bank for their, for their debt? and why as a saver what i, what i pay a bank to hold it. now that's a very good question and i think there's a few answers too to that question. you know, one is there's still a convenience factor whereby the alternative is to hold your, your money in cash, which would run then require you to store the money in your house or under the mattress or in a safe or something like that. and this is not just going to vigils, but this also applies to companies as well. companies would have to store all of their cash in a physical location. and that, you know, would be quite onerous than that there would be costs associated with that. so the thinking is that there's a level of. 'd interest that somebody would be willing to pay for a bank to hold their their money. and so in that way, there is scope for negative rates simply to be a charge for holding your money. now if the negative rates are too negative, then there

>> you mean central banks. they have cut rates.nk the big breakthrough over the past decade or so is that they can conduct monetary policy. you go into a recession, -- theerest rates central banks that have been unable to cut rates at the weaker end of the spectrum, turkey, has managed to find itself in a hiking cycle. or tolaces like priscilla a lesser extent russia, which have been pushing their luck in terms of monetary easing, have so far managed to get away with it. i lean more to the point joe was aking, that em response to recession and a much more similar way as dm than it used to. will joinmcnamara, we you after the break, including a discussion of what is going on in turkey. this is bloomberg. ♪ ♪ caroline: today, there was plenty of focus on the rally in u.s. equities but emerging markets also saw gains. the msci index at the highest level since 2018. there were some independent stories. joe: huge day for the lira. i am used to looking up every day and the lira falling. the lira gained about 5%. about the president's son

we have large commercial banks and central banks to innovate together in the space. it depends where they are going if they go in the form that's the settlement between banks, that's another easy one. if it's a form where there is a double tier, meaninging the central bank, commercial banks play a role. need to find a way to connect them to consumers and businesses. that's one kind. if it's one versus central bank and consumer, that's a different game with a different risk profile. i don't think that's the one that christine is referring . to they are referring to that double tier one in the middle. and i'm a fan of those. i'm a believer those will come and we should participate in them. guy: thanks for your time today. we appreciate it. ajay banga. it's worth pointing out also a founding partner of the new bloomberg new economy forum. beginning monday, the new economy forum will be bringing together global leaders to discuss building an inclusive and sustainable economy in the post-covid world. you have been watching on bloomberg.com on the terminal or live goo-g and

and the problem is not the mandate of central banks. it is not the toolkit of central banks. it is understanding the forces that are leading the economy to grow very slowly. understanding what is going on is far more important at present than the mandate of a policy framework. that i think is what needs to change, and it isn't just expansionary fiscal policy because interest rates are close to zero. it is much wider than that to deal with this problem of excess saving in the world as a whole, lower saving rates in some countries, higher saving rates and others. >> go ahead. >> i was just going to say, i but i thinkervyn, the world looks to the central banking community to explain the nature of the macroeconomic challenges before it, even if the central banks themselves lack the tools to deal with it. if the central banking community can explain as janet just did, as i tried to a little bit and talking about the absorption of savings problems, if that problem can be laid out clearly, that is the first step. it doesn't solve it to lay it out clearly, but is a crucial step towar

also been asking guests for the last quarter of -- the last four years, five years, when will central bankally consolidate? i spoke with thomas koch dine earlier this week on acquisition opportunities, and he talked about private banking. here he is. >> across europe and switzerland there will be continued consolidation, and it is more domestic. transborder, cross-border consolidation is more difficult to actually execute, but there will also be cross-border correlation, i'm sure. exactannot give you an number, but what i am convinced is that conservation is needed. and it will happen. francine: is everything you do managing that through the consolidation coming, or do you want to defend yourself as an inquiry? how you want to manage wealth management? thomas: our strategy is principally based on organic growth, not in organic growth. i think we have a very strong banking franchise globally, growing 5% per year. if you took the fx adjusted growth we had in the first nine months in revenues as well as in a um, we have a nice balance between mature and emerging markets. strong exposure to as

we will talk about central banks much more. that's get to bloomberg first word news with ritika gupta. ritika: president trump has fired a homeland security official who contradicted his unfounded claims about election fraud. christopher krebs is a former microsoft official who the president named to a top security job. in a tweet last night, the president said that his comments were highlysecurity inaccurate. in michigan, a county that included detroit averted its decision -- earlier, wayne county's election board because a national uproar when republican members blocked certification. they had been asked to conduct .n order -- an audit michigan was crucial to joe biden's victory. the senate could still try to consider the reading almond -- the nomination of judy shelton to the federal reserve board, but it is unclear if the result would be any different. stunning setback by blocking shelton's nomination. two republican senators were quarantined. two others voted with democrats. boris johnson is going green. the british prime

and they say the problem is not really who leads turkey central bank. the problem is that president edwin is meddling so much in the banks affairs that he's trying to influence to judicial system here. and that has seriously eroded investors' confidence in the turkish economy. all right. joining us from istanbul, thank you. and over we go to china where new figures show that factory activity expanded in november at the fastest pace in more than 3 years of the service sector also grew to a multi-year high. the data suggest the world's 2nd largest economy is on track to become the 1st to completely shake off the drug from widespread industry shutdowns due to the corona virus. ever more on this, let's bring in conrad who is in frankfurt. conrad good morning. the chinese economy is recovering, but how far can it really gets when other economies across the world are still suffering? good morning, stephen. well, while of course, the chinese economy is not totally independent from the rest of the world. in recent years, the economy in china has become more and

announce they see climate change -- the easiest way, smoothest way for central banks to supportcarbon transmission through their program. for investors, the hope that central banks which for this market, from a return perspective, in this context, it is a market this is going to grow massively given the fact that europe decided to leverage recovery and nd it will launch it in the coming weeks. anna: yes. larry summers earlier this week was skeptical about what central banks can do in terms of climate change. there seems to be an area where central banks are very active. let me ask you about carbon pricing. dow you see them covering more global emissions? becoming more expensive? is that one way the market wakes up to climate change? >> that is one thing we're looking at. europe is obviously leading in this respect. it is one of the most delux globally in terms of coverage and pricing. to be successful, the strategy would need to be widespread globally and we need the likes over the u.s., u.k. and japan and china to join. china has already announced it would merge several of its

i don't understand it sent every single central bank in the world already has a central bank visual currency, the dollars essential by a digital currency. there's a very small percentage of the u.s. dollars that are in physical form, physical, scarce form of $100.00 bills. same thing goes for the euro and the pound and, and the yen. of course, a lot of these paper money is going to be removed and i just don't understand the inefficient. creating a whole new currency when all they really want is to eliminate paper money. right, while the legacy system, including the central banks, is built on debt, it's out that base. so potentially a central bank, digital currency would be equity based in that regard and a huge swap going on it. but we'll see what happens. i want to get your thoughts on the news that stanley truckin miller, who is war, the most successful money managers in the world. he mentioned bitcoin recently, saying b.c. he's got a position. this is on top of politics. jones. bill miller, over at legg mason. i mean, these are the battleships. these are the tankers. you know, these are t

to negativeike free based fundings that central banks have discovered, and central banks have may be discovered if we have an entire industry for credit that is dependent on this, than they are stuck. so how do you get unstuck? how do you kickstart the economy again? this is something europe with is desperately trying to do forward, but now once again it is being held up because that is going to be the crunch point for europe. imf is saying there are stability risks, yet it is hard to see that if you look at the vix and other gauges of potential volatility. what is the key financial stability risk as you see at, based on central bank intervention and the current outlook? geoffrey: are we going to see default rates go up? if we talk about financial stability risk, i think liquidity risk has pretty much been taken care of, but there are going to be solvency risks. solvency risk means a very sharp rise in defaults. even if you look at china, the latest find show -- the latest financial stability report from the pboc, they are concerned you could see a 10% rise in the rate. if that happe

we will watch any move or whisper from the central bank of 30. -- central bank of turkey. up, a discussion of the biden administration would do for stocks and global growth. this is bloomberg. ♪ >> there is a huge sigh of relief, i think, by the nation. we have come through a difficult period. but most importantly, that the american people have spoken. and that's what our democracy is all about. >> the president has every right to a challenge, to ensure that votes have been counted correctly. but once that decision has been made, and once there are too many votes to have been counted, for him to catch up, then it is his responsibility to accept the result and move on. >> the first thing the president should do is wrap his arms around this pandemic. this pandemic has exposed a lot of fault lines in our system. this virus impact has been. >> is first business for 2021 should be investment infrastructure -- not just rhodes and bridget -- and bridget -- not just roads and bridges and transit. >> the president elect is going to come in facing a horrible covid situation, and an

the central bank's chief spoke exclusively with bloomberg. ould be able to announce by the end have alwaysand i been struck by the excitement over digital banking. it is not new in singapore. it is not new in most parts of the world. banks have gone highly digital. >> interesting to note that quite a number of simtech companies shortlisted chinese simtech companies p or what to they bring to the table -- interesting to note that quite a number of shortlisted chinese simtech companies -- what do they bring to the table? ravi: they have done extremely well in terms of the ability to harness data, to draw insights, and to provide very customized services, just in time services. that has been quite remarkable. chinacomes at a time when is clamping down on its major simtech companies. we have seen how the ipo has been derailed because of that. are you concerned that that could be an issue for singapore? what do you make of china's move? ravi: it's a move in the right direction. >> is it about leveling the playing field? ravi: it is. we are happy th

as the central bank governor and his son in law, resigns as finance minister for more than a century, cities have been magnets for millions of people with the promise of a better life and work. but the pandemic is realising the way we live and work. city centers have been turned into ghost towns as people work from home that could potentially leave lasting, scars with shops, restaurants, and services that cater to commuters being decimated by some estimates. the economic damage to the world's top 2 financial centers supposes the wreckage of the financial crisis of 2008. new york and london are also facing a huge drop in tax and transport revenues. new york is expecting a $2000000000.00 for all in personal taxes this year, and unemployment is at 16 percent. that's twice as high as other cities in the country. only 10 percent of manhattan office employees have returned to the workplace as of late october, that's up from 8 percent as of middle guests. london's transport system, which includes tube trains and buses was bailed out by the government. the $2400000000.00 loan for short of the

janet: central banks can't fill the gap. obviously, even before this pandemic, we knew that central banks broadly were running out of ammunition. they play a critically important role in terms of unlocking financial markets at the start of the pandemic. they played an exhibit -- they played an equally important role subsequently, but today they are playing a supporting role. the heavy lifting everywhere has to come from fiscal policy, but they are taking their supporting roles very seriously. the lead role has to come from the fiscal side. it is coming through in europe, and admittedly the fed is probably frustrated that anything they are likely to get in that few months or next few weeks from the u.s. is going to fall short of what they have actually been advocating in terms of scale in the mix of fiscal stimulus. so no, the central bank support is very much a supporting role. guy: was that what we saw today in some ways from the riksbank? it understands that it can't do what fiscal can do, but nevertheless, it appreciates

you fire central bank of about one day the next day. your son in law steps down as finance minister, the best breath turkey's president ended what appears to be his unconventional economic policy. you see, interest rates have been held as low as possible in the hope that it would revive the turkish economy when your currency sinks more than 30 percent in a year. at inflation saws you need to increase interest rates, the central bank has spent a staggering $100000000000.00 trying to prop up the currency. but what's driven murder? want a more conventional economic policies may have more to do with the u.s. election. joe biden's victory could mean turkey's hit with sanctions for its purchase of a russian missile system, something the president trump was unwilling to push. right, let's get down to the nitty gritty and name as lamb is the chief market analyst of eva trade. he joins us now via skype from london, so fast the central bank governor was fired then early on, son in law stepped down as finance minister. that was a bit of a shock. w

for the past two decades, many central banks have been suffering with low inflation. some have a hard time believing that too low inflation is a bad idea, but persistently low inflation can pose dangerous for the economy. to see why that is the case, lower interest rates means lower inflation. this is included in estimates of future inflation as well as real return. lower interest rates means the central bank has less power to support the economy in a downturn. bias onarts a downward economic activity, employment, and inflation. we have seen this exact dynamic whereby lower rates the two beaker activity and lower a self fulfilling process. we don't want that process to take root here. i would quickly touch on four principal changes that have emerged over recent decades and now amounts to the new normal. the first is, for these advanced economies, the trend growth rate is lower than it used to be. that is because population growth is lower, because productivity is lower. secondly, the general level of interest rates has fallen around the world. note, we andappier other

central banks have done what they can.y have stabilized financial markets, the crucial contribution back in the beginning of the covid crisis. now interest rates are at zero. it is not realistic to expect monetary policy to do the heavy lifting or even the lighter lifting of driving the recovery. it is time for fiscal policy to step forward. vonnie: she made that point, but she also said several other things, like the fed should not be targeting particular groups of people. she made some very strong comments on the fed. it made me think that maybe she was thinking about a treasury role. she said she would not comment on whether she was asked i would consider going to treasury. tom: no comments about whether that treasury role is in prospect. but the discussion, as you say, did go wider. by larryrn articulated summers, echoed by others on the panel, was about mission creep for central banks. if we think about the last 50 years, the period since the great financial crisis, central banks have stood out as the most effective p