tom: we focused on deutsche bank and citigroup said it was irrational. rebounded to 2.4% and sold off significantly in the last two weeks, double digits. you see opportunities in european banks? caroline: because volatility will be with us for a while, we are neutral on financials in europe. there is more of an opportunity in asian banks which have sold off a little bit but not as much but they are not as exposed to the sentiment concerns and the equally have very good capital and solvency ratios. francine: how do you pick them? we are trying to figure out the at1's but it seems like there's more exposure to the at1's in seniority what happens in asian banks. caroline: we like the japanese ones in the hong kong banks. tom: you have a focus on diversifying away from the u.s. in this environment appeared as a call on valuation and where does it take you? caroline: it is essentially a call on valuation because we are in a time when urgent -- earnings are not good in regions. we are preferences for emerging markets, particularly upside on the chinese market

morgan wealth management. >> deutsche bank has fundamentally modernized and reorganized its business del and is a very profitable bank. there is no reason for concern. alix: that was german chancellor olaf scholz speaking and brussels where everyone said oh no, did i lose my weekend? joining us now is chris watling. the last couple of weekends we have had banks fail, credit suisse, are you prepping to go into the weekend like this? chris: i week most weekends anyway, we will see what happens. what happens in markets is that you get mountains during the weekends. we will find out and be prepared. guy: what is it that's going on here. it seems like we have a series of different problems. the first republic problem which is different than credit suisse. deutsche bank in the eye of the story today. maybe deutsche bank is just a profitability story and what we're seeing is a turn in the economic cycle and were heading into a recession should i put the two year and the deutsche bank story in the same bucket going into this weekend? chris: what we've had in the last two weeks is the pricing

and now worries about deutsche bank. me domino effect that is leading us to wonder, a, will governments and central banks have to do more? and will there be a bigger risk here systematically? >> well, that's panic, too. again, i think you talk about switzerland and so on, there were problems there. there's problem with svb. there are going to be problems with other regional banks, but it's not systematic. and that's the important part. there is not going to be contagion other than institutions that have liquidity issues, and you can handle those. some of them -- the issues could lead to lower profits and because they're now paying -- having to pay market rates as opposed to lower rates. this can increase their -- decrease said profitability and they may have to be acquired or get more capital. but it's a situation that can be handled and will not, in my opinion, come anywhere close to previous financial problems we had like in 2008 and times before that. >> dick kovacevich, former ceo of wells fargo, thank you very much.

shares of deutsche bank actually tumbling in european trading, down by!u■ xd13.75%. g alle1 of the europe stocks. >> good morning, becky.c it's been quite the roller coaster ride for9(ut(z banks. weok walked in monday to the ne rescue package for credit suisse. the initial concern was there's a financial contagion but the first half of the weekÑi europe banks did quite well. at some point on wednesday theú index as up 17 percentage points. you can see all of that has turned around. so the week as a wholexd ther european bank index is down half a percentage point so all of those gains have been given back.Ñi investors are starting to focusx one of them is deutsche. you can see it's down 13.5 percentage points. yesterday we saw its biggestÑiw jump ever on record on thet(fá credit default swap implyinglp higher degree of probability of default for the company. but it'sfá 8-1 debt. this was theçót( class of debt d out with the bailout package for credit suisse has jumped in yield terms. just a couple of weeks ago it was sitting at yields of lp10%. now we'reÑi at 22 percen

deutsche bank has turned in 10 straight quarters of profits. but there is concern about exposure to high risk investments, according to stanford finance professor a not add mahdi. the banking system is just very, very large. and because it's large, there are only so many opportunities, so it ends up being very competitive. and the only way to get ahead is just to take a lot of risk at marie says the underlying concerns about credit suisse and deutsche bank differ from the recent troubles of the smaller u. s. banks, first republic, silicon valley bank and signature bank, which were closely linked two u. s interest rate hikes at your bank and credit suisse. there are a different animal because they are very global. very, very large. in very what they call systemic meaning very connected to a lot of they have their tentacles in a lot of places. madi says. concerns about deutsche bank started years ago , don't you bank had legal problems, money laundering fraud ? uh you name it, it just had some losing business, says european union banking officials

now today it's deutsche bank. does not seem to be a larger issue with the banks and i think we still contend that. the general economy looks look it's on good footing and that's why the markets are doing well. with everything going on at the banks it's just leading to more and more possibility that the fed is going to pause or likely cut rates later this year. i think that's a bigger picture story of what's happening. that's what the headlines are focusing on, and i don't think that's changed. >> what did bullard say today? 80% chance financial stress contained. he believes -- markets are pricing in a pivot, like actual cuts to start this calendar year, and we've got bullard coming out saying, i'm going to raise my terminal raid, and i a so it going as high as .75% because financial stress will be contain beside the fed is going back to fighting inflation. what do you think? >> you got to be very careful who you're listening to and what the motivation is behind it. i think everyone wants to be remembered for the pe

from steve would get nervous about deutsche bank which prompts people to take their money out of deutsche bank. there's also something, a theory that i, i like about why this is happened today, and this is sort of friday feeling, you know, people don't want to have them money in a deutscher bank or any of the other banks that have seen that the prices drop significantly today they want to see that they don't want money in that over the weekend. yeah. because because the last couple of weekends have been afraid of monday morning. right. indeed. and they've been harrowing the last couple of weekends. yeah. the collapse of, you know, a major bank in the united states every weekend and we had the rescue of credit suisse and the last weekend, so some extent it could be a freaky friday ceiling. so freaking friday. and what about a manic monday? a miserable monday. is there a reason to think that we have real contagion here now in your for the banking sector? all has caught on is the lack of confidence, but not any actual systemic problems. and actually put this question to pascal down who they

it looks like deutsche bank was on the mend but the market has decided otherwise. based on any real news, just the perception that a bank might be insolvent if too many depositors take their money out. that's always true for banks large and small. in this case the market is forcing the issue more than anything else. dani: is it safe at this point to be owning european banks or is this a market you want to stay on the sidelines until we get more confidence, more steady hands in the banking sector? octavio: i think there are two separate points. as a depositor, do you want to have deposits in this bank? the larger banks, that is pretty safe, the regulator make sure. it is a different story what happens with the shareholders and bondholders. credit suisse did not fare very well and that might be what is happening with deutsche bank, depending on how much pressure is put on the share prices and bond prices now. the short-sellers are pushing the stock down and i expect more action today on a deutsche bank and in the coming weeks as the market panics and pix on these per

deutsche bank has turned in 10 straight quarters of profit, but there is concern about exposure to highvestments, according to stanford finance professor not add mahdi. the banking system is just very, very large. and because it's large, there are only so many opportunities so it ends up being very competitive, and the only way to get ahead is just to take a lot of risk, says the underlying concerns about credit suisse and deutsche bank differ from the recent troubles of the smaller u. s. banks first republic, silicon valley bank and signature bank, which were closely linked to us interest rate hikes, don't you bank and credits with their and different animal because they are very global? very, very large. in very what they call systemic meaning very connected to a lot of they have their tentacles and a lot of places. marie says. concerns about deutsche bank started years ago, don't you bank had legal problems, money laundering fraud? uh you name it, it just had some losing business says they fund most of what they do, overwhelmingly and in all kinds of complicated ways with with debt,

let's start with banking from deutsche bank. you've seen it on "squawk box." down sharply premarket. takes you back, of course. the bank's in a lot better shape than it was coming out of the crisis, jim, but it's not a name that's unfamiliar to many. i mentioned it earlier this week. it's sort of, well, will they try and come after it? when i say, will they try and come after it, i'm referring to things like that tweet yesterday from a guy who used to actually trade and really created the tbs market in some ways when he was at deutsche bank years ago, getting people worried. >> okay. by the way, i'm going long here. >> that voice, still coming around. >> you were there when it went. first of all, the real problem with credit suisse is they didn't have any money. deutsche bank, let's start there. if i bail out a bank, second, you want to be aggressive on deutsche bank. short deutsche bank and buy. >> they go up as -- essentially as the credit risk is increased. >> right, and we saw that. but perhaps the most easily misinterpreted is what happened with credit su

deutsche bank front and center. the markets live team laughed when we posed our question, are we working this weekend? that is very european to suggest. alix: i always work on the weekend, in some respect. it was svb, first republic, then credit suisse. do we have to wait for the shoe to drop, or do we take off some risk into the weekend? guy: there are three theories i can discern from today, one is we have a deutsche bank problem. the german chancellor is saying it is profitable, so we do not have a problem. we are going into a weekend and people want their weekend. the third is the banking story is a symptom of a pricing around a recession. it is the two-year that you want to be watching. we can discuss this, we are going into a weekend. let us ask that question. sally, do you think we get a weekend? sally: i do not think i'm going to get a weekend. it has been a staggering few weeks, we had the collapse of three lenders. the net impact is this intensely volatile banking sector. first republic is the one everyone

let's start off with a question that he received about the fall in deutsche bank shares. is a concern for investors. the bank can move shares and deposits. here, it is the direct reference of deutsche bank and that caused concern in the share price. he is advocating having the central bank cleared. that would involve massive revamp of credit markets and direct exposure to credit suisse is relevant, but manageable. investors did not get rights which business models are similar to credit suisse. there have been fast outflows of deposits in cases. interesting. interesting comments from what he said earlier. current events confirm strong demand and supervision is needed more than ever. advocating more regulation instead of less regulation. banks with adequate risk reporting capabilities is still the exception. some interesting comments coming out of the chair of the supervisory board of the ecb and regulators are the people that investors want to hear from right now as to what they know and what they are seeing on the bank's balance sheet here. >>> elsewhere, morgan stanley c

we are still off but it all started with deutsche bank, the bigger man bank, rumored to be in some duressme pressure , some trouble. that stock had tumbled about 22% i believe at its worst levels. we're off those worst levels right now. deutsche bank sending a signal, you know, it's not the end of the world. we're not in deep, deep doo-doo here although i don't know what the german be for deep deep doo-doo, but anyway, coming off those lows. what to make of it with mark tepper kind enough to join us. actually, mark, the first question i had on that was whether banks themselves are still under duress. i mean, the comeback from the lows today doesn't mean they still have problems today. what do you think? >> yeah, so look. with regards to what's happening , i think the contagion effect is probably limited and when you look at, you know, credit suisse and deutsche bank in particular, i mean, those two banks have been the black eyes of the european banking system for like 15 years now. i mean, they are always on the ropes. they are always on life support, but my take is that it seems like the

deutsche bank is under pressure. erest rates have left some banks with bonds that cannot be sold without loss. the question is who else is exposed, and how much? i find hard to believe that deutsche bank has as much exposure like svb. it is unclear to me why there is so much panic. tom: it is unclear still why -- whether it is knee-jerk reaction or something more rob medic. -- more problematic. we are hearing whether or not they are secure and focused. the banking industry is sitting on about $600 billion of unrealized losses. banking sector down or percent. deutsche bank is down 7.2%. let's check in on bonds. yields across the curve below 5% at 4.8% from the two-year. six basis points today. yields coming down 11 basis points. a 14 basis point move lower. francine: up next is "bloomberg surveillance: early edition." this is bloomberg. ♪ - [announcer] imagine having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousand

in terms of deutsche bank, do _ inflation. in terms of deutsche bank. do you _ inflation.k, do you think it - inflation. in terms of deutsche bank, do you think it is - bank, do you think it is perhaps a blip or will they need to be intervention there as well? ., ., �* need to be intervention there aswell? ., ~ ., as well? that i don't know. it feels odd _ as well? that i don't know. it feels odd that _ as well? that i don't know. it feels odd that deutsche - as well? that i don't know. it feels odd that deutsche bank was under pressure. i think it is the lightning rod for all of this general anxious about what is going on in the system right now, so i don�*t know it well enough to know the answer to that question but i do think it does reflectjust that question but i do think it does reflect just a that question but i do think it does reflectjust a broader sense of unease that exists among industrials at this time. the system is under a lot of pressure. the system is under a lot of pressure-— the system is under a lot of ressure. ~ , ., . pressure. we will be watching tha

deutsche bank said the risk was near zero. commerz bank said the same the question is what is the selloff question with the risk geoff is in zurich and has the latest on the back of this good morning, geoff. >> reporter: steve, thank you for that we were standing out here thursday and friday last week trying to get a handle on what would happen next in this banking story. there was one individual who was pretty convinced we have to see a resolution over the weekend. that has turned out to be the case we brought him back to have a look at his crystal ball and tell us what happens from here i'm talking about the partner at porter advisers. good to see you. thank you for joining us the swiss finance minister said this is no bailout do you agree with that >> well, this is a clear bailout. the english or german language alike. this deal has been really brought to ubs and ubs was really here as the counter party to do the deal over the weekend. there would only be an alternative to the deal to be expected or full nationalization of t

he said that deutsche bank is a profitable bank and there is no reason to doubt its future.e said it had been formerly reorganized, and it will be very profitable. this is over concerns of the share price greatly reducing this morning, over fears of contagion after credit suisse, the major bank was taken over by ubs. there is concerns about what this means for the banking sector in europe. at another press conference, the french president macron backed up this position and said the european union's banking system is sound and blamed the market turmoil around deutsche bank on speculators trying to get in while there is turmoil going on in the banking sector. he also said the eu's banking situation should not be compared to the swiss. he said it is not a comparable situation. this is all happening in the context already on the agenda by the european union, trying to kickstart its plan put forward in 2008 for a banking union. it is about harmonizing banking rules and making sure taxpayers are not funding or bailing out banks that if they fail, and it sort of got underway after

deutsche bank down 7.3%. banks leading the losses in the sharp jump of costs of ensuring against default. this is fuelling concerns in the sector. >>> uk consumer confidence hitting a one-year high as the sales hit a rebound. bank of england governor andrew bailey is upbeat on the outlook. >> we were on a bit of a knife edge over whether the economy would be stagnant. i'm not saying it is off to the races, let's be clear. i'm optimistic. >>> tiktok ceo shou gets a grilling on capitol hill as u.s. lawmakers threaten to ban the chinese owned social media app. it says it does not operate at the whim of beijing. >> you can say whatever you want as long as you don't violate the rules of safety. we commit to be free of all and any government manipulation. >>> eu leaders gathering in brussels with economic stability high on the agenda. euro group president pascal donohoe says the euro members are strong, but says there are issues ahead. >> in banks across the world and it reminds us of the need to be ever vigilant an

the moodñr inc london is pretty nervousxd right now, givenxd th swing for the pricing of deutsche bankause people to get very nervous indeed. moment fori]t( banks when therea oing on.i] so certainly people areok watchg deutsche bank closely. there isfáfá a level of about w jz has moved so fastxd in the last 48 hours. news, andé@■ the cdf market is y liquid, so it's possible that there is something causing thisi overreaction. but the level of nerves is very high. and iw3 just strongly disagree,ñ barry, in terms of what the fed because the reason we are in ha massive policyjf mista+#■ about far too much quantitative easing, far too much free money. and xdessentially, thelp system beenñr riddled withr that is why you now have the financial system essentiallyçó based around añrxdfb interest will stay low forever. it is insane.fá svb, for example, were betting the!u■ house onqáu rates coming down quickly.>ehñ+■ other banks and other smartçó ay the future was going. but theht■ fed itself, and the other centrb■ banks, encouraged this copacenylpt( for years.lp if the fed blinksÑi given the inf

is a next bank that could fail. i’m wondering if deutsche bank is a next bank that could fail.—at could fail. i'm wondering and i imagine the _ bank that could fail. i'm wondering and i imagine the same _ bank that could fail. i'm wondering and i imagine the same for- bank that could fail. i'm wondering l and i imagine the same for viewers, when they see these desperate stories. is it indicative of some larger trend?— stories. is it indicative of some larger trend? that's hard to say. what this all — larger trend? that's hard to say. what this all comes _ larger trend? that's hard to say. what this all comes down i larger trend? that's hard to say. what this all comes down to, i larger trend? that's hard to say. what this all comes down to, or| larger trend? that's hard to say. i what this all comes down to, or one of the big things it comes down to, is interest rates. we seen central banks in europe and the united states raise rates and one of the unintended consequences of these rate rises is the impact it's having on banks. some of the financial instruments that banks hold as

she is in deutsche bank tumbled on friday, plunging some 14 percent before recovering to end friday. 8 and a half percent down. the recent stank back takeover of swiss bank credit suisse, and the collapse of several smaller us bank says shank and market confidence. but he officials here in europe are insisting that there is no cause for concern. the market volatility has now hit germany's biggest banks, particularly georgia bank. shares came under pressure on friday on the side lines of an e. u summit chancellor, olaf sholtes came to its offense, the dodger bunk up to like a shift for deutsche bank has fundamentally overhauled and reorganized its business model and his yet. and it's a very profitable banquet on just a new zip off the top left was no reason for any concerns about consumer. nevertheless, nervousness continued on the frankfurt stock exchange and on others across europe. the decks closed down 1.7 percent. while there's been no new bad news about the banking sector, the cost of insuring against bank failures, a key risk indicator is rising. davidson guns in china now, it w

of course, deutsche bank's earnings will be much higher than the others. roblems within the capital position of those banks. that is an important distinction we should make. jonathan: that is a vital one. i think that is a difficult one to make sometimes when you see a stock down aggressively. you start thinking about existential risk. there is a lot of daylight between existential risk and peer profit challenge. i think we can all agree, we can escape the worst of this. there is going to be a pure profit challenge for the whole industry in a big way. lisa: especially if the economy does have a recession and if europe is facing potentially more issues. right now, not so much. pmi's in the service sector earlier this morning came out better than expected in a year. if that emboldens ecb officials to hike rates more, does that send the downside further self going forward in the future? jonathan: you know what i do not get? schwab was down yesterday 6%. the ceo spoke to wall street journal. and said, there would be a sufficient amount of liquidity to cover if

european union's banking system is signed and he blamed the market turmoil around deutschen, but deutsche bank on speculators was trying to get in. well, there's a turmoil going in it going on in the banking sector. you said that the used banking situation shouldn't be compared to the swiss. he said it's not a comparable situation. now this is all sort of happening in a context that was already on the a gender by the european union. trying to kick start it's plan that was put forward in $22008.00 for a banking union is by harmonizing banking rules. trying to make sure the tax payers aunt funding o bailing. i find that if they fail, and that is, it is sort of got underway after the financial crisis. 20072008. but it's been relatively sluggish. ever since you can sense among the leaders not just shows the macro, but others as well. that would be speaking off to the summit that this is going to start to be a priority issue. as we're seeing these high levels of inflation, high cost of living, the concerns around the banking sector, growing on this issue. this banking union issue for the european u

share prices in some of europe's biggest banks such as germany's deutsche bank and france's societe generaleave been falling during friday's trading as investors weigh up what stresses and problems may lie within them. concerns were sparked at the beginning of this week when switzerland's biggest bank ubs was forced to rescue its rival credit suisse. but fears seemed to ease as policymakers and politicians offered their ressaurances that their were no wider problems after the recent failures of two us banks. as you can see here, stock markets across europe are down. other banks to suffer on friday include barclays and natwest here in the uk as well as germany's commerzbank and spain's banco de sabadell. so the german chancellor has again been trying to reassure investors. translation: the banking system is stable in europe and the european union has supervisory structures in various areas, including the euro area, which have enforced strict rules and it has now proved its worth and enables us all to say that european bank supervision and the financial system are robust and stable. patrick re

i think the rise in deutsche bank is indicative of wider loss of confidence in the banking sector. there is a gathering fear that central banks may have overdone it with great interest rate increases, having left them too low for too long, and now there is a gathering fear that they may have overcompensated and with the policy ability of a recession, and within the banking sector, investors fleeing from those big investment banks and the regional smaller banks to the bigger banks and more exposed traditional levels of banking. so a wider desire to avoid it. ., , ., .,, avoid it. the other side of those increased _ avoid it. the other side of those increased interest _ avoid it. the other side of those increased interest rates - avoid it. the other side of those increased interest rates at - avoid it. the other side of those increased interest rates at the l avoid it. the other side of those . increased interest rates at the time that they have been increased by central bankers, as there is appeal to businesses, and a warning to businesses not to raise their prices, and yet we have

not just this, what we've seen, the value of shares tumbling in institutions like deutsche bank. but what was happening in switzerland, in so far as could histories, is concerned. and then you b. s. this idea, the cost of insuring against the risk that large european banks might default on their debts. it's all about confidence. there appears to be a real short fall in confidence in the financial markets about the overall strength and stability of the european banking sector. that's why we see the share prices real. the value of shares really tumbling in recent days and petty for, as an economist who predicted to the 2008 financial crash. she explains how the costs of living crisis is fueling the banking problem. the fact the matches we had an overall lack of confidence in the financial system, and that's been exacerbated by the determination of central bankers to rapidly wrapped up interest rate at a time of the cost of living crisis. at the time when you ukraine has been invaded, we were, there's a war going on. all of this has n, as in, you know, has problems and create problem

it looks like deutsche bank will be next in line. ity, just about all of the european banr and q1 should be very profitable for the bulk the. >> maybe the reporting will come as a bit of a relief this. more broadly, sarra, are you kind of recession-proofing your portfolios? what are you actually doingfá mt here in terms of leaning toward or against certainçó parts of t market at this point? >> well, we just put on our list a piece called the end of easy money, and that's no surprise to anyone. but what it does meane1 is that with banks being cautious particularly in the developed world, andlp reining in loans a less liquidity means less money pressure on assete1e1 prices wo be possibly likely a recession in the nesfÑ six months, it is hard to say, depending ow aggressive the central banks continue to be butçó in the meantime, we want to see companies engaged in operational restructuringw3 where they're actively cuttingñr costs and improving their business and this happens to be quite a few outside the u.s. nom in the food business. nu

we are seeing heavy selling in deutsche bank. e, but the broader sector picture is red for the most part. the only sector that is trading in the green is food and beverage. the defensive part of the market along with health care and telecom and media. clearly investors are preferring those defenive names. banks selling off 3.5% overall. oil and gas down. the cyclicals are hit hard as it is a risk-off mood in europe. looking at the banks. this is the epicenter of the selling. deutsche bank shares off 9%. this after the cost of insuring against default shot up. deutsche bank is sharply in focus. it is not just deutsche bank, but all of the banks. ubs down 5%. investors clearly still nervous around the banking sector despite the efforts by various authorities. european central bank and snb in switzerland asserting confidence in the banking sector. they are concerned that the credit suisse and ubs merger is not enough to contain the stress in the banking sector. frank. >> a lot of red on the board, julianna. thank you very much. >>> t

and now all eyes are on deutsche bank and deutsche bank shares. they tumbled almost 9% in germany concerns about a spike in the cost to ensure the bank's debt against the fault. of course, that is never a good sign. i would note, though, that much like credit suisse deutsche bank's been in turmoil for literally years, but the bank failures in the united states earlier this month they really cause investors to take a tougher look at banks everywhere. officials in europe . they were quick to come out on friday and say, look, there's nothing to see here. everything's fine. the chancellor of germany he said. there's quote no reason to be concerned about deutsche bank and u. s officials. they've also been keeping very close tabs on all of this banking turmoil, treasury secretary janet yellen held a closed door meeting with america's top financial regulators on friday, and you've got to believe that deutsche bank came up. all of this comes after the fed pushed ahead with his warn inflation, despite calls from some experts to pause and avoid adding to th

when asked by cnbc, he said it was a call of duty deutsche bank is another bank we have been watchinglosely up 2% today. it continues to claw back some of the losses toward the end of the week last week let's talk about the broad reaction of the week let's show you how things have done deutsche bank is up .90% ubs is up and all of the sector has done well since some of the lows we got to the lows we hit were on friday since then, we have seen a rebound. haven't fully recovered the losses from friday >>> the resolution board chair has told cnbc in an inn tear you have -- interview that the regulators are vigilant as the sector recovers. the block would follow the write down and always write down shareholder assets before bondholders. different from the swiss government handled the collapse of credit suisse we have sylvia with us the collapse of credit suisse and the writedown of the bonds has taken the banking sector by storm. what specifically did the eu regulator say about how they will look at bonds moving forward? >> reporter: as you mentioned, it has been some doubt and questions

the deutsche bank was still a trustworthy organization. >> deutsche bank is fundamentally modernizedh the reorganize business model. it is a very profitable bank. there is no need to worry about anything. >> a little earlier, i spoke to reporters who said that that the bank was reacting acro europe. >> if you look at what is happening over the last couple weeks, you can see the central bank has come in to help european banks at risk. the hope is that it will calm the nerves of investors. that is something similar to what is happening in the united states, with regulators swooping in. they are helping the bank, and the signature bank. to protect a of the deposits. but investors are still nervous and that is really what you are seeing a lot of here. they may have some of these actions taken, but investors are still jittery now, they wonder, is deutsche bank the next bank that could fail? >> what i'm wondering, and i believe our viewers are also wondering, is indicative of some larger trend. >> that's hard to say. it all comes down to interest rates, so in the united states, they are ra

and today, i, we've seen that spying out to deutsche bank. why deutsche bank? well, partly because deutsche bank has historically been quite a wobbly bank, a long history of problems which has been attempting to recover from. but, you know, in financial markets, once you've acquired reputation for, for not being too sound, it tends to stick. and so when people are looking around to see who's going to be next, they tend to look, look on the banks that have been modeling for a long time. so in europe, that would mean deutscher bank. so that's part of the problem. and also this morning, deutsche bank did something which ordinarily would have been a good thing. it's a be paid one of its bonds early. and normally that's a good sign. say, yeah, okay, we've got some money. we can pay this off a bit like you pay your credit card off. but in the circumstances, and because credit suisse had done something quite similar a few days before it failed, people took it out as a bad sign and panicked. so so me, it was to me, there is a that it's just fear and anxiety feeling on

this latest panic triggered by germany based deutsche bank.cnn's met egan is tracking all this for us. he joins me now, matt, it does feel like another day, another crisis that you're reporting on what's happening with deutsche well, kate, you know, investors are just waiting for the next shoe to drop their kind of going from weakest link to weakest link in the financial system. you know, first, it was silicon valley bank and signature bank that was first republic. then it moved overseas , and the focus was on credit suisse, and now all eyes are on deutsche bank. deutsche bank shares, they're down pretty sharply. almost 11. some of these concerns have been triggered by a spike in the cost to ensure deutsche bank's debt. that is never a good sign. i would note, though, that deutsche bank's been in turmoil for years. this is not entirely new, but the bank failures in the united states really forced investors around the world to take a tougher look at banks and as you can see a regional banks in the us they're kind of mixed right now. first repub

romani as role of ceo regulators are investigating one trade that could have led to a big drop in deutsche bank prices in bond markets are still down the credit default swaps, which spiked last week and a lot of people pointed to as maybe the cause or an amplification of concern about european banks they're still elevated, and we see those coming down. i think that's a sign that there are still some jitters out there. >> sure. people say hey, markets are so thin that one big trade can move the market for deutsche bank you know, yes, that's true you were seeing big reactions to this are they justifying concerns about deutsche or are we seeing the market looking for the next institution that might be on the chopping block should we get used to this exercise or does it tell us about vulnerabilities that might exist in the global banking system >> the cds is an easy thing for people to point to and say this is a thin market, this is why things are introuble there are indicators that people are worried. the price of bonds got wiped down and reverberate across the market that's telling investors that

deutsche bank cds, fears into the banking sector. all the big banks in the red right now clearly signaling fear over the future. just moments ago we heard from st. louis fed president james bullard. he just listed his forecast for rates to 5.75%. who is going to be right? the banks, the markets or bullard and the fed? what was so interesting, rob, the banks are signaling something else is going to happen. bullard said i see the terminal rate even higher. >> that shows you the predicament the fed is in. they have inflationary pressures which haven't subsided, and they have this disinflationary shock to the banking ecosystem. and how do you reinstill confidence in a market that's not confident? and so you have a lot of cracks that appears beneath the surface. investors don't want to take risk going into the weekend. it's a shoot first or run first and deal with the consequences later. i don't know when you come off svb, credit suisse in the last two weekends that risk taking is something that i'm frankly shocked at the turn in markets

translation: deutsche bank has fundamentally modernised - and reorganised its business model, and is about anything. earlier, i spoke to our business reporter samira hussain — she told me how central banks were reacting across europe. if you look at what's happened over the last few weeks you will see that the central banks have come in to help european banks that were at risk. that's credit suisse and the hope that this was going to calm the nerves of investors which is something happening here in the united states where regulators swooped in to help the silicon valley bank and the signature bank and protected all of the deposits. investors are still nervous and that's really what you're seeing lots of here. you may have had some of these actions taken, but investors are stilljittery and wondering if deutsche bank is a next bank that could fail. i'm wondering and i imagine the same for viewers, when they see these desperate stories. is it indicative of some larger trend? that's hard to say. what this all comes down to, or one of the big things it comes down to, is interest rates. we

if you look at deutsche bank, a lot of stress emerging. seems like potentially this is not just a credit suisse issue. when you think about the european banking system, global banking system, do you think there are more shoes to drop? zach: i think the move today is probably overdone and indicative of how difficult the liquidity conditions are, how much volatility has created difficult trading backdrop and i think there's a great point, thinking of taking advantage of some of these attractive spread levels, next we could bring more volatility. we have the pc deflator getting released and we will be watching that the see of the fed will be forced to hike again or if they can hold at this level. we also have one end at the end of next weekend if you think about relative asset performance with the bank lower in yield, you could see systemic selling pressure across bonds which could create more opportunities in the near term but we think once the dust settles perhaps after next week he will have strong opportunities there. the move in deutsche

the german chancellor insisted that there is no reason for concern describing deutsche bank f stable investors. they're certainly worried as other banks share prices across europe had dropped as follows. the recent collapse of to us banks and the takeover of the swiss bank pretty swiss by its domestic rival. you be? yes. here is all of sholtes coming to day on the banking turmoil. the finances stim will bolster the european banking system is robust and stable dish transfer. we have the necessary oversight structures and thanks to the work over the years. and the effort of the banks themselves were in a robust and resilient position. and this is an incentive to make progress in the capital markets and the bank in unions. yet, what's more important, we plan to full heartedly make progress for cannon. and i've also comes from hudson to doing it for until time. i asked her correspondence there in brussels, jack carrick, whether or not the chancellor was on the defensive during that press conference. that's right. he was really trying to sort of calm the concerns around this. he said that

our look at deutsche bank in the first republic credit suisse doing a merger with ubs. all bailouts on the signature in silicon valley collapse. i know your committee the house financial committee is going to hold the first meeting on the failure of silicon valley with the head of the fdic the fed and treasury department, what do you want to get out of the hearing. you sit on the committee, what are you planning. >> we need to get the answers of who, what, where, when, why and how is occurred with the regulators asleep at the switch was the management in these banks particular doing anything inappropriate it sure seems like they were doing their job. ultimately what is driving this. at the end of the day we're going to walk away realizing the federal reserve has raised higher interest rates to tame inflation. the action that congress has to address. we have to bring inflation down in the policy of the biden administration of democratic control in the previous two years that led us to the inflation in the first place. maria: elizabeth warren is blaming roles that were ro

you explained 10 minutes ago about what triggered the deutsche bank issues, it was one trade. think was more than that. it was years of the market understanding that the german banking sector is overbanked. years of previous weakness in deutsche, and the market probing and testing, it is a continuation of that. the german banking sector is not out of the woods, decades of people calling for more consolidation. you look at the tech sector, we have had good news today with alibaba but we have had months now of job losses, are there going to be issues when the market no longer thinks let's buy tech stocks because they generally go up. these companies have not made profits for a long time. i think there will be a change in market psychology because in a higher cost of money environment, the people's willingness to take risk altars, that is the bigger picture and why we're reluctant to see the dollar weakening significantly because it is a safe haven after all. dani: speaking of safe havens, on a one-month basis began is the best performing g10 currencies, can began regain his posit

the fall in stocks was led by germany's biggest lender, deutsche bank, which suffered a fall of almostrebounding later. mark zandi, chief economist at moody's, says it's been a difficult time for the banking systems. the global banking system is under a lot of pressure, central banks of the federal reserve, the bank of england, european central bank and others, they are raising interest rates very aggressively, and they have been for the past year, and that puts a lot of pressure on the banking system, and it has come to a head here in the last couple of weeks with a couple of failures here in the us, and of course the emergency rescue of credit suisse, the big swiss investment bank by ubs, and i was just going to say, you have investors that are just very nervous, very skittish, stock investors, bond investors, and any creditor in these institutions arejust watching this and are on edge, and i think this is what we are seeing in the trading action. do you think these nerves are a direct response to what we saw with those interest rate rises in the us and here in the uk, because there

deutsche bank down 8%. the worst hit among them hsbc is not far behind down 5% credit situation is down 3.8% after the selloff yesterday. all of this on the back of the major selloff in svb silicon valley bank. it spooked the market. raised concern over what risks are stateside and across the globe. u.s. banks are indicating opening lower. losses set to continue after we saucer yus lo-- sauw serious los the kbw index fell 8%. these are serious moves. if i can sum it up, the question investors are asking is will other banks be forced to sell at a loss to cover deposit withdrawals. there is a look at u.s. futures. the nasdaq had turned positive, but now back in the red. all three majors pointing lower. all this in addition to the payroll report due later today plenty of action ahead that is it for "street signs." i'm julianna tatelbaum "worldwide exchange" is up next. has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or

can we show you please deutsche bank. i believe it's way down still yes it is, just 5% down. earlier. susan? is the contagion spreading here? >> well, if you look at the bank stocks, we're talking about the large ones like jpmorgan, bank of america, they are all down today because of this concern stemming from the european side. don't forget just about a week ago we were looking at credit suisse heading into the weekend and we know that it was taken over by ubs, now there are these concerns over deutsche bank because on the european side biggest sell-off for deutsche bank since 2020 and you saw insurance against bankruptcy searching to the highest levels in almost a decade. just doubling this month alone, and that was the same type of price action that we saw before credit suisse was forced into this forced marriage with ubs by the swiss government, but credit suisse had much more severe stress indicators and db. still, you had the same concern, slowing growth, poor management, and u.s. investors in particular are concerned about their exposure to commercial real estate here,

very interesting to note that because many concerns around the credit default swap of deutsche bank which did rise of 17% at some stage. 3% gain an cross the banking sector. this is pointing to perhaps a shift change. soc gen and ubs losing out. ubs having been involved in the buyout of credit suisse. we have noted that of late. you see the general sense of positivity across the european banks. it is not pointing to the end where things lie with the banking saga. a lot of questions with credit suisse and the probe with the regulators as well as the leadership which is possibly in play at this time. for now, positivity across europe. frank. >> arabile, thank you. >>> turning attention back to the markets in the u.s. and gearing up for volatility as we see concerns with the global banking system. investors looking to key economic data and consumer spending which is the fed's favorite measure on inflation. it is also an important data point for the next guest who says the mark is overly focused on the decline in interest rates and under focused on the prospects for recession. phil palumbo is

the market volatility has now hit germany's biggest banks, particularly deutsche bank shares came under pressure on friday. on the side lines of any use summit, chancellor, olaf sholtes came to its offence, the dodger bunker, shift, or dodge a bank, has fundamentally overhauled and reorganized its business. mon would and his yet, and it's a very profitable bang yet, and just unzip off the top left was no reason for any concerns you could on to mom . nevertheless, nervousness continued on the frankfurt stock exchange and on others across europe. the decks closed down 1.7 percent. while there's been no new bad news about the banking sector, the cost of insuring against bank failures, a key risk indicator is rising. davidson guns and china doll, it will now be crucial to see how many politicians and central banks managed to reassure investors and customers. we would have a real acute banking crisis if customers went to the banks and demanded their money . and there's absolutely no reason for that. at the moment, absolute kindful debt site. last week, the swiss bank credit suisse had to be