the fdic doesn't want to talk. but oceanwide told us in a statement that it has brought in outside experts to evaluate the issue, adding, "as project developers, we're committed to being good neighbors and our commitment to independent monitoring and coordination is a part of that." >> this is shades of millennium tower all over again. >> reporter: supervisor aaron peskin can't believe the city never required the oceanwide project to provide any assessment of its expected impact on ne exemption,onding by an oceanwid consultant that there was no need to shore up the fdic's foundation. the firm that gave that advice is the same one that engineered the millennium towers foundation. officials with the firm now called langan did not return our calls. building inspection official ron tom says the city relies on professional experts and he is satisfied with their findings. >> we do not have the resources or the ability or expertise to conduct monitoring at the department. we depend on design professionals who with the pro

according to the fdic's principal duty inspector general in 2016, the agency is, quote, not there yet, closed quote, and it may not be prepared to safeguard the information. sadly, between 2015 and 2016, the fdic experienced many data breaches that involved employees leaving the company. one such incident occurred in 2015 in which a departing employee downloaded sensitive stress test data onto a thumb drive. these leaks are deeply troubling, and overall they're unacceptable. this information could be obtained by individuals to either invest or to divest in particular stocks which obviously can be quite damaging to bank investors and to the capital markets. the unauthorized disclosure of information that can significantly alter the stock market is an extremely punishable offense. by increasing penalties on employees of these agencies, it proves, frankly, that they're not above the law. that's why i introduced this bill to ensure that sensitive market information is properly protected and that people who improperly disclose nonpublic, confident information are in fact punished -- confid

that's the fdic. alliances are like that. they're sort of a guarantee we make to other countries and they give to us that if it goes to hell in a hand bassquette ket, if we go to war, that we'll come to one another's assistance. these are our allies. it's already worrying that the president is throwing a lot of -- he's throwing into question the trust that they should have in the united states. it's not a personal thing but it's a country-to-country and a you know, organization to organization issue. >> does the -- karen, the situation with canada seems particularly bizarre to me. i can't -- seriously. has there before and a u.s./canadian relations seem very poor at the moment. we're contemplating/possibly entering into an actual trade war with our biggest trading partner which doesn't seem like a great move. >> no, you know, there's economic anxiety in the country and there are things we could do to respond to that. we could get canada to relax some of their protections on their dairy. we could get japan to consume more, ger

at the same time, we learned that the fdic has the subsidiary on a watchlist. can they comply with regulations? -- auctural change the structural change like that cannot be made overnight. >> that is correct. now, this is part of the reason for the reorganization that deutsche bank is undertaking. all of this questions management which was the real reason for the s&p downgrading. executing risk. can they execute a turnaround plan? can this bank be solvent? -- that ist is why what you are seeing priced into the stock. david: fascinating. good luck to mr. sewing. alix: it is going to be ok. david: returning to the big news of the day. the jobs number. let us look at what is expected. 190,000 news is jobs and the unemployment rate remaining at 3.9%. that is what is expected. carl, you have slightly different expectations. >> slightly more rosy. jobs expected. the economy is escalating. with the unemployment rate low and payroll gains solid, once again the focus will be on average hourly earnings. as i was writing my preview for the report, i look at the average ho

fdic insurance made it safe to put money in banks. the sec was built to be -- the s.e.c. was built to be a cop on the beat. not a cop on the street but a cop on wall street. and glass-steagall, checking accounts, savings accounts, were safe from wall street risk taking. for more than 50 yrs, half a century, those rules stayed in place and they worked. the devastating economic crashes were gone. regulations brought us economic stability, and the financial services industry served the american people rather than the other way around. regulations to protect workers, regulations to protect financial marketplaces and make them fairer, the g.d.p. was climbing and america's middle class was getting a huge share of all that growth. we were on a roll, and in the 1970's, environmental issues ve front and center, and the safety of american families came under review again. you know, this may be hard to believe for some people in this room, but back in the 1950's and 1960's, big american cities were smothered with thick layers of nasty, diy smog. people sucked down toxic chemicals on

fdic insurance made it safe to put money in banks. the s.e.c. was built to be a cop on the beat, not a cop on mn eta cop on wl street, and glass/steagl separating boring banking and checking accounts from wall street risk-taking. for more than 50 years, half a century, those rules stayed in place, and they worked. the devastating economic crashes were gone. regulations brought us economic stability, and the financial services industry served the american people rather than the other way around. regulations to protect workers, regulations to protect financial maetplac and make them fairer, the gdp was climbing, and america's middle class was getting a huge share of all that growth. we were on a roll, and in the 1970s environmental issues moved front and center, and the safety of american families came under know, this may be hard to believe for some people in this room, but back in the 1950s and '60s, big american cities were smothered with thick layers of dirty smog. people sucked down t chem on the way to work. little kids breathed in dangerous

fdic, the fed, and myself, meet and have a lunch and talk about outstanding issues. we have gotten strong momentum on our ability to work across the agencies. particular, it is probably 45% in banks and 55% and the holding company. >> speaking of the volcker rule in the proposed changes, what do you think those changes are likely to do? >> i think it will bring clarity for the banks in the examiners as we are trying to determine the prior terry trading elliott. i personally commend what the committee and legislators did regarding the law. have gone toion we accounting methodology. it may not be the best solution but it is one we can all get behind. >> i know we are running low on time. i'm going to submit a couple of questions for the record. one has to do with a discussion on exempting investment adventure capital from the old rule. we will set that as a question for later this week. here.nk you for being getting back to cra is probably -- of the most things important things you will do for the people of alabama. letting counts differently than investment which coun

the fdic reported on tuesday that banks are doing better than ever, including the benefit from the tax bill net bank income increased 27% compared to 2017. that's been consistent in most cases, double digit profit increase over much -- most of the last eight years. even without the tax benefits republicans in congress bestowed on the largest corporations and the wealthy, bank profits would have been up 12.6% from a year ago. record profits for banks shouldn't just mean the top executives get biggest bonuses, banks should be investing in their businesses whether it's cyber security or a living wage for the employees. i remember the average teller in this country makes $26,000 a year. rather than lobbying to be left off the hook from rural after rural the largest banks should secure infrastructure against attacks and protecting sensitive consumer data. law enforcement plays a critical role in assessing and warnings about cyber threats in its ability to share sensitive cyber threat information more quickly will help combat those threats. i know there has been good new york in this area, w

and fdic. earlier today, a ratings reduction. this is the chart.eutsche bank versus bnp paribas normalized back to the financial crisis in 2007. they are bundled together in losses in 2012. that is the real divide between the french juggernaut up it goes, and deutsche bank just simply cannot get it done. negatived to see 87% from 2007. francine: i like that chart. if you are an employee or client, you don't like that chart. it does tell you the story. we spoke to a shareholder, and he said let's give this chief executive more time. i am proud of this chart. i've been trying to look at it for the last two weeks, and finally it makes sense. this chart matters because the spread between italian yield and spanish yield. one week ago, it was all about the italian risk. now the socialist led opposition is basically ousting the prime minister, mariano rajoy. he finished a short speech in parliament moments ago. on bloomberg. us lawmakers are set to vote on a no-confidence movement starting out. alreadyon groups have pledged the socialist group the support

we had the fdic. we had the office of personal management. the first time that china has been accused of hacking into government systems. the truth is i think we have to be honest with ourselves here. this is exactly the kind of information that foreign intelligence services try to get from each other. so i don't know that china is alone in trying to access in other military's planning documents. >> so let's talk specifically about china. we were having the economic conversation earlier, right, about this concern of realignment, geopolitical reie onlinement. we have putin with xi this week and xi calling him his best, most intimate friend. >> trump said that, too, right? >> they have talked about their personal relationship. but, are we seeing some realignment here that china is no longer just a frenemy but more of a geopolitical foe than it has been in recent history? >> i think traditionally or at least when i was in the obama administration we made very clear that china's economic rise is not a black and white scenario. it's not one for on

the fdic has put them on a list and this has to raise questions with regulators. >> what they are controlling eternally -- internally but harder for u.s. regulators because they only have one part of the picture. if you are a u.s. regulator, you can only see what is in the u.s. operations. david: we are about to get results of the stress test, quantitative results, this afternoon and the u.s. subsidiary for deutsche bank as a part of that and will that be included in the stress test? >> we are looking at this tomorrow. we have a lot of questions about what it will look like. operational risk is part of all of the equation. operational risk is what the fed is looking at. whether this was operational risk or -- there are questions about what this was. we say it raises questions but all we know is there was this outside day that was two times, three times, four times bigger than anything. shery: what is the significance of this when we tried to get a glimpse on to their trading exposure? >> it kind of goes back to what we talked about before. u.s. regulators can only see one part of the book. th

congressman, the most highly paid federal employees are in fdic, the securities and exchange commission, national credit union administration and the comptroller conservancy. when you say $100,000, some of those people in those agencies are making 200,000 a year. the other thing you may not know is that those agencies bargain pay without a specific authorization from the congress to do so. >> okay, several months ago back in january i worked with chairman metals and others trying to write a letter trying to request information from various agencies on official time. it took months and months and months, over five months and then when we finally got a response, it was so difficult to compile staff and countless hours to get the information in a way that it could be remotely understandable. we are still going through it. do any agencies really keep track of official time usage to your knowledge? >> some agencies have as part of the time and attendance system the employees go into their system and put their hours. if you are union steward or official, one of the blocks is official time. >>

and just a few weeks ago, we -- that thehe fed fdic had downgraded it for these reasons that make a bankve tests. that is not good risk controls. concept ofa good what is in their system. and deutsche is in there definitely. but with the other big european , wes that are successes could see that in their system the as they are all new to this. maybe the fed will say -- you are not doing this correctly yet. julia: and it is a learning curve. guest: and try to fix it next year. president trump, they are trying to roll bank a lot of banking regulations including dodd-frank. what does that mean for the stress test? guest: they have done certain things that show some of the rollbacks but, for example, congress passed a law with bipartisan support. not just republican. they increased the threshold for banks to be considered systemically important. took three banks from the stress test including colors and zions.merzbank and zions. they are clearly not going away from the stress test. but, some things are being changed a little. things a little easier. especially midsized banks are not under as

after yesterday, the fed and the fdic had deutsche bank on a list of troubled companies in the u.s., the shares are trading at 9.48. jump from- a $.30 yesterday. a bit like one of my favorite cliched -- cliches in the market, it is a bit like trying to catch falling knives. what is the impact from this week's political uncertainty on the market? looking -- first of all, thank you for coming in. we have been looking at rates all week and focused on the government debt out of italy for the most part. what is the corporate situation like? debtme of the corporate has been more volatile than the equity markets which is strange. even, for example, the phoenix group. equity fellnd the 3%. volatility is due to the corporate bond market. it is leading the equities which is unusual. more recently, equity volatility has been leading the bond. -- volatility but right now, it is reversed. matt: jimmy said we saw a lot of volatility earlier in the year. is there more to come? paola: the rise in the populist movement is not good. it will be a tricky year, i think. matt: the trade situation -- you

i was thinking on my run today about the fdic. we have guarantees for americans if they put their money in the bank that, if there is a run on the bank or some kind of collapse that they can get their money back up to $250,000. that's the fbic. alliances are like that. you know, they are sort of a guarantee that we make the other countries and they give to us. if it goes to held in a handbasket, if you will, you know, if we go to war that we will come to one another's assistance. these are our allies. so i think it's really worrying that the president is throwing a lot of -- he is throwing into question the trust that they should have in the united states. so it's not a personal thing. but it is a country to country, and a, you know, organization to organization issue. >> right. does the -- karen, the situation with canada seems particularly bizarre to me. seriously. has there ever been -- u.s./canadian relations seem very poor and we are contemplating possibly entering into a trade war with our biggest trading partner. it doesn't

not only the fed but the fcic -- fdic. whether they be financial or managerial. the firm and frank for it said it is overhauling the operations, the issue. they said there are no concerns about its financial stability. investors are clearly not free of concerns. check out the shares over the past five years now come to an all-time low. let's go back to singapore for the bloomberg business flash. ceoette: matt, samsonite has stepped down after concerns about accounting prices this -- accounting practices. he will be replaced by the cfo. -- betweenshort sell indian entities. the company has refuted claims. it shares have jumped today in hong kong trading. pushing tohs consumer finance has even bigger aim then investors might have imagined. david solomon has said in a presentation that personal loans are just the start with expansion opportunities to express market brand and mortgages, and insurance. the consumer bank started in 2015, it has attracted 1.5 billion -- one million customers. general motors has said the softbank vision fund is billion. $2.25 the deal ad

and expect that to be safe and diversified in the same way they put money in the banks without that fdic, of course, but how do all of these things link up with the banks i think was the point more on that contagions side of the equation >> sure. we saw etfs led to a sudden selloff, more volatility like in february, but, again, that's for investors to know about, is it not? >> it is i mean, i see it as a subject for the bit to look at for general sis semiystemic risk aro example, a blackrock or vanguard big in the area, what are you measuring? no capital to hold against it. just a matter of saying, can an instrument be too unwieldy for a market to handle in a stress situation. >> what do you think, sandy? >> i like we scaled back, dodd-frank stress tests and that sort of thing. look at the 35 banks that went through it, $1.2 trillion in capital, and i think they came through okay, but i'm a big fan of capital markets and putting the burden, which is what congress wanted to do, put the burden back on the banks rather than, you know, having the government really handle it, so i'm a fan of

fdic did not sign onto this change. are you concerned about the risk to financial stability? >> first of all we have a rule that is out for comment and we will expect to get those comments back. you are aware of the economic gap will change the provisions of that because some of the institutions we are looking to figure out what to do with the custody banks. i don't think the way it's currently formatted today will be the way it's implemented the coast it would be double counting. he meant that you approved of that. >> yes but i also want you to be aware that number is the leverage ratio was the sole determinant. that is actually a backstop to capitol racial and their other ratios. >> mr. samuel woodward you argue it doesn't do damage to do this which i guess you are arguing why would it -- why a should the banks -- is it so the banks can be more profitable? >> the leverage ratio treats all banks equally and by focusing on the leverage ratio if potentially could force banks into a higher risk issue at the expense of low risk issues. >> are you aware that the largest banks are

the fed and the fdic have them on probation.utsche bank win back the confidence of the fed? daniel: that will happen over an extended time. it does not happen -- with corrected x, we are ok. alix: do you believe them? david: daniel tarullo, former federal reserve governor, thank you for being with us. coming up, rising cost of detention centers turning nonprofits into big business. next on businessweek beat. alix: oil climbing to the highs of the session. a delegate saying opec talks will focus on a return to 100% cut compliance at almost every country. almost every country over complying. that would imply an increase in production. they are also allowing venezuela and supply losses to be set. they have not yet reached a deal. this is bloomberg. ♪ this is bloomberg. ♪ ♪ emma: this is "bloomberg daybreak: americas," i'm emma chandra. stephanie cohen. to the bloomberg business flash, general motors and ignoring the call for more u.s. jobs. resurrecting the chevy blazer, planning to build in mexico. the auto workers union is critic

we also ran into troubles with the fdic, the fed in the u.s.cb, according to people familiar, said they did not have liquidity at the firm. we want to know what clients are thinking about this, what people are saying about the liquidity as well. shery: how is the turnaround plan going along? >> very, very slowly. the thing about the u.s., what is nice, there is a lot of senior management in place, somewhat stable. same for the larger bank, internationally. if we start to see turmoil at the top, that will be an issue. we don't know more about what exactly, how many, who is being cut at the desks. shery: thank you for that. amanda? just a note about what is coming up on monday, an exclusive interview with the canadian central bank governor. live from new york and whistler, bc, this is bloomberg. ♪ scarlet: it's 2:00 p.m. in new york, 11:00 in san fransisco, and 7:00 p.m. in london. i'm scarlet fu. julia: and i'm julia chatterley. welcome to bloomberg markets. scarlet: we are live and bloomberg world headquarters in new york over the next hour. he

fdic chairman of systemic risk council founder sheila bear. the big stress test results coming out. house majority whip in steve scalise this morning on the senior guys did to president george w. bush come a senior visor karl rove an op-ed in "the wall street journal." don't miss a moment of it. three hours coming up. the top story is the trade for tat. the united states ofullying tactics and blackmail after president trump threatened to stop additional terrorist on hundreds of billions of dollars of chinese imports. the spokesperson saying apart, we oppose the act of extreme pressure and blackmail by singing the big stick of trade protectionism. the president showing no signs of backing down on terrorists on china and other countries. watch. >> we have been ripped off by almost every country on earth. our friends and enemies. our friends to a bigger and better jobs in the enemies. but those days are over. and even before we finish off with the trade deals and we'll finish up with the trade deals, people don't realize we have the cards because where the piggy bank everyone was broug

also year that the ffic, which is the regulatory agencies, the banking regulatory agencies like the fdic and occ and even the national administration and others put out a policy statement saying you should share information if you're one of our regulated entities and you need to believe to fsi sac. >> which stands. >> financial services information services and sharing center. we referred to that as the information tsunami. we had 2,200 companies and it's been growing. we had 200 members in 2006 and it's just been a hockey stick growth the last few years. >> thank you. i know my time has run out. thank you very much. >> senat jones. thank you, mr. chairman, and thank you to all the witnesses for being here. i agree that all of a sudden this -- everything that i'm seeing up here there is some element of cyber security. it doesn't matter what committee i'm on. it touches everything, and i think you guys touched on this before i got here, and that is the cyber workforce and trying to keep pace with the demand. you know in, alabama we've got auburn university which has an incredible facility

the fdic released new data last month. banks increased their profits by 13% last year and that's before you account for the windfall from the tax bill. when you add in the tax bill, banks' profits went up 28% last year on top of the double-digit percent almost every year from 2010 and 2011 and 2012 and 2013 and 2014 and 205, 2016, and 2017. the banking sector brought back $-- bought back $77 billion worth of stock last year. last year the c.e.o.'s of the six largest banks got a raise, an average raise of 22%. these are c.e.o.'s that are already making millions and millions of dollars. keep in mind the average teller in this country, the average bank teller makes about $12.50 an hour. yet the c.e.o.'s of these banks already -- some of them making $10 million and $20 million a year are getting a 22% increase. this isn't some dying industry crying out for help. if anything, it's an industry that needs a more watchful eye. the largest banks paid $240 billion worth of fines ten years ago after the collapse. wells fargo can't go