francine: beer with davide serra -- we are with davide serra. he markets missed constructing? will we see more consolidation, is their appetite because we are over banked in europe? davide: think about what happened in the states. they put a trillion dollars of capital at preferred levels so they basically injected capital. immediately they reset the economy back up, engaging quantitative easing and the economy restarted. there was a mobilization over the past seven or eight years. in europe, we were late in the game in revitalizing the banks and we only did it at equity levels. then we relate to the qe game. that led the euro to over appreciate and it caused a crisis. i think we are at the point where the number one driver for bank stability is net gross margin. we need normalization on interest rate. normalization means you are looking around 1% as the long-term gdp, between 1% and 2%. if that were to happen then european banks' profitability will probably go up by 40% to 50%. francine: 20 billion for the italian banks, why don't we have more o

mark: our guest is davide serra, talking about whether the running financials will continue.is bloomberg. ♪ vonnie: this is bloomberg markets. i am vonnie quinn in new york. mark: in london i am mark barton. vonnie: it has been three months to the day since the presidential election and since then financials have returned 17% amid promises of deregulation. bloomberg's editor at large erik schatzker is here. erik: i am here with davide serra, ceo of the largest hedge fund in the world specializing in financials. donald trump has made many promises about what to do with u.s. financial regulations. i want to start with you on european banking and in particular, italy. righte buying into the soft ring being conducted by unicredit. why? is an institution but it has a core footprint between core europe, germany, italy, and it basically has an npl problem due to the a sally -- italian recession. it went from 100 to 90 and is on its way back. i think there is value. they are raising capital at a 40% discount to theoretical value. i think as a result it is a great entry point to the e