we'll be asking him about italian banks. be asking him about what he thinks -- angela merkel being more flexible. this is bloomberg. ♪ morning, everyone. i am tom keene. we say good morning, one day before the jobs report. we will do that tomorrow in the united states. first would news. >> the u.s. justice department investigating the fatal shooting of a black man by police in louisiana. protesters in baton rouge, louisiana, held a peaceful protest last night. video shows two white officers arresting alton sterling. the police had sterling pinned to the ground when one of them shot him. of an be another sign economic slowdown in europe. industrial production in germany unexpectedly fell in may by the most in 21 months. the report underscores the challenges facing german manufacturers. the president of germany's central bank said the british vote to leave the eu could hurt the german economy. in a few hours, but will be only two candidates to secede david cameron. lawmakers are voting today. the two top vote getters will go b

and the italian banking sector.do you think the window of opportunity is to get this done? is only going to be until october. the reason why is, the referendum in italy will overtake everything that we have spoken about until now. your viewers must not forget renzi was not elected by anyone in italy. power legally but he was not a popular vote. he is there and he would like to prove to himself and all of the italians that the italians are behind him. the referendum will be the test to determine whether he will stay and continue his changes that he has done. he has more to do, but that is really going to be the timeframe. i'm sure that the bank of italy, the european central bank and i hope that the european union will have some flexibility and letting the italians solve their problem. one of the reasons they left brexit is that england was tired of the european union telling them what to do. i think they should have their own liberty to do certain things and not be dictated by the gods of the european union. guy: on

bringing with it all the italian banks. of course the idea we did area some positive comments saying also that he is thinking that a solution for the italian banks is within reach is helping, but unicredit jump here is expected to do a lot for unicredit going forward in terms of cost reductions and in terms of strengthening capital and improving the risk discipline overall and the sell of assets and moving to help strengthen a core tear one rh owe. one of those things happened yesterday. discount,ount. you are seeing fin co-bank on the index performing as the worst performer. down and leveling up at that level. also the asset management group who has been in talks with santander. that could be very helpful also for unny credit. first board meeting yesterday seems to have overall positive. we're looking at a good day after many days of negative for the italian banks. i would say that so far so good today. back to you louisa. >> claudia, thank you very much. joining us live there from mi n milan. robert smithson still with us

italian banks recouping some of their losses today.o make clear, it is inappropriate to talk to david folkerts-landau about his bank. down, deutsche bank, and the recent rollover here. last hour you say it is about italian banks with some real contagion across the eu system as well. we are thrilled with the current account flows front and center for the united kingdom, to bring you david folkerts-landau of deutsche bank. in the next section we will get to his research with michael dooley and peter garber about how money moves around our international system, but we must speak now with david folkerts-landau of deutsche bank on these markets. there a rhyme or reason, a correlation to these markets, or can you go with the idea that it is just about brexit? there is always an underlying course that is driving this nothing is purely accidental. , andis particular case your next guest will probably have more to say about that, there is a fundamental dislike, inefficiency in the way division -- in the way decisions are being made. if you take

they are worried about italian banks.is bloomberg. ♪ get ready for the rio olympic games by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. pulsene: welcome to "the ," live from the european headquarters in london. we had some data trading all day for the month of may and we are just getting that u.k. services pmi for the month of june. it is a touch below expectations, 53.2 and set of 53.8. the u.k. composite overall a little bit better than i expected, services worse, composite better. it is pretty brexit because this is june. australia's central bank has held interest rates. governor and his board left the cash rate at 1.75%. that was forecast by every economist surveyed. they see inflation remaining low for quite some time. saudi arabia has been hit b

what is the this -- are italian banks.tor a more likely candidate to get bailed out then other banking sectors? i think they have done less over the last few years, and this is not a universal indictment. they have done less to rebuild capital, to get their leverage ratios into a comfortable position. they have done less to do with the persistent and underlying and huge nonperforming loan problem. this is weighing heavily. a number of the italian banks, including unicredit, spread their wings a decade ago throughout central europe. many of these are weighing on the profitability of credit. i do not want to single out this , because there is strong and capable leadership. but the fact is, there needs to be a recapitalization, and it is simply not going to be done through the private sector alone. this is part of a broader problem, where regulators have come out of the crisis in 2007 and 2008 and decided that we must at all costs project -- protect the taxpayer. this is shortsighted. it is not protecting the taxpayer. it is

italian banks are worried to some.still trying to understand who will become the next prime minister in the u.k. and how that impacts the dollar- pound and the triggering of article 50 in on the ongoing negotiation is with a e.u. "surveillance" is upnext. tom keene will join me from new york. we will bring you all of the analysis. at 11:00, we speak with the citigroup economist. ♪ francine: 11 police officers protests were being held over the fatal shooting of two black men. three people have been arrested and a fourth person has killed himself. job stay in the usa. leftn today's job numbers the brexit market gloom? party theresaive may and andrea leadsom battle it out.

matt: italian banks struggle for stability. >> italian banking shares have been clobbered. >> it might be too big to fail and to make the bailout. it could spin out of control. matt: and the best business minds from around the globe try to place all of this volatility in perspective. >> we see is a flight to quality. >> we are in for a very long negotiation. that is what the markets are afraid of. matt: "bloomberg best" is straight ahead. ♪ matt: hello and welcome. i'm matt miller. this is "bloomberg best," your weekly review of the most important business news, analysis and interviews from bloomberg television around the world. let's begin with a day by day look at the top headlines. monday sought more potential -- monday sought more potential -- saw more potential fallout from britain's vote to leave the european union. >> a little over a week after the u.k. voted to leave, francis -- france is pushing ahead with the claim for the city of london's euro clearing business. they have laid out why he thinks paris is the new natural home for the operation. >> you have france in terms of o

i am an italian on cheaper nor but at this in time -- an italian entrepreneur but at the same time i'mning a global company. 7%, so italy less than it is a small fraction. yoox before the merger has been growing in italy always in the past did except for one quarter -- in the past. except for one quarter. the world economic -- use is at is jewel for italians. .ou is a jewel for italians it will continue to grow. francine: thank you so much for coming on. -- let's gethetti straight to the bloomberg first word news with nejra cehic. nejra: of the federal reserve is losing confidence in his need to tighten anytime soon. minutes of the fmo sees meeting the month held before britons referendum shows officials facing rising uncertainty. posted makers want proof that job creation has resumed at a healthy pace. inflation will eventually hit target. for more u.k. -- have frozen withdrawals as investors look to dump real estate holdings in the aftermath of britain's brexit vote. they have trading and 5.7 billion pounds of asset -- by -- so that investors who are you asked for the money back have

it's already been bailed out twice by the italian government.ions now are centering on potentially a third bailout. >> italy is systemically important. it is not like greece. there is a real issue if italy needs help because it might be too big to fail and too big to bailout. it is by definition a major issue for europe as a whole. and on the banking side and political side, tempers are rising. >> deutsche bank had a really interesting turnout over the weekend that shows banks claims on italy. france's claim is about $300 billion, meaning is not an isolated event. all of europe needs italy to stabilize. >> and if we compare italy to the u.k., and the u.k. his strong financial links, eurozone countries are more tightly integrated with each other on the trade side and the financial side. any major issue italy has is undoubtedly going to spill over to many of the other countries. >> i don't understand why it's so difficult to fix the italian banking system. is a problem they don't actually understand some of the nonperforming loans? is it the polit

how do you deal with the us -- with the italian banks?g to be really complex and i think by the end of the day mr. lindsey is going to have to make a tough's -- tough decision. he may choose to bail out his banks and take the consequences because the rest of europe knows it is important to have a robust banking system and if he does not choose that it will have implications. on the other hand it will blast through the rules put on bail ins as opposed to bail outs. that has quite major implications. francine: are you expecting a run on the banks or is this something that we talked about and we know that one way or another we will have a solution? chris: they will definitely have a solution, there is no doubt about that. talk of more asset sales, and that is not going to be the solution but part of the solution to make sure this important institution is able to operate effectively and normally. tom: i compare it to deutsche bank. linked together, the real economy issues of italy with deutsche bank, they are linked at the hip, aren't they? a

we are getting a price on the italian banking, the full spectrum of the italian banking industry. do you look at the banks? an you put risk in, buy italian bank and put it with hsbc? how do you invest in a sector if you need to put money to work? do you avoid the banking sector completely, or how do you do it? >> we have been underway to thanks for as long as i can remember and i have been in the industry for quite some time. we find them not completely un-investable, but we just don't see the growth. in this world where there is a scarcity of growth, we tend to follow the companies that can grow. banks are bobbing on the economic waves while a large part of their destiny is controlled by an economy like italy, which has grown by 0% since the interruption of the euro. it is hardly a compelling story. us, its not enough for has to be a growth story, and we are still struggling with the banking industry to see where growth is coming from. caroline: talking about looking cheap, 1.4% lower for credit suisse, trading at the lowest priced since all the way back to 1989. you can check it

italian or german? >> maurizio: just italian. >> anthony: just italian.as far as i'm concerned. give me a good spaghetti with white clam sauce and i don't need much more. maybe some wine. everybody here says the same thing, "we are open minded. we try to be fair to everybody. we're welcoming. we're proud of that. that will never change." do you think that the refugees who are coming here, that they will be integrated into german society as efficiently and as gracefully as your family was? >> maurizio: i'm not sure because times are so different to the '80s. >> anthony: but, look, germans are organized. >> maurizio: organization is just one fact. you need to control, to handle this, but um -- >> anthony: look, all the people who were involved on new year's eve, do you think that if they get work, that if people are kind to them, if they're given housing, do you think eventually germany will figure it out? >> maurizio: i'm not that optimistic to be honest, because i'm convinced that it's not a german problem. >> anthony: right. >> maurizio: it's a world pro

we need to focus on italian banks.nd 75% and the italian government is considering injecting the bank with additional capital ahead of the stress test results according to a person with knowledge of the plan. moved totnuzzi has london and with us still is kamal sharma. thank you so much for joining us . i guess what people are really concerned is that this gets so ugly in italian banks that we see a run on the banks. elisa: we have certainly seen an acceleration and the discussions have become more focused. what we do know is that last week before brexit there was discussions with the european commission which allow them to us -- install this extra liquidity line of emergency funds that banks can tap. this should tide them over in these difficult times. is there the problem are bailing rules. can the italian government work around these or does that mean they may not be able to fully support the banks? elisa: the discussions are centered on how much flexibility italy has and how much string that comes attached with. in

personally, i am not convinced this is an italian problem, per se.is a european wide banking issue that has not been resolved yet adequately since the 2008 crisis duties ecb only became a regulator recently. hopefully this will speed things forward to an look more solid european banking system. francine: you think it will be solved in six months? six months goes very quickly. what does it mean for the european economy? -- marie: need banks we do need banks to make sure things happen in the economy. it is inconceivable that we can survive without a solution to this issue. regulatorulty is the has tried to do a lot of good , buts with good intention it has made life harder for the banks. not saying it is the regulator's fault. the bank should of done these things earlier. intent was being compounded -- was being -- was making the -- a more fragmented system than we had before. that is clear and the aching profitability is being increased density banking profitability is being increased. you can respond to that by running your bank better. the sweetest

anna: we talk about the future of italian banks. that is next.his is bloomberg. ♪ anna: welcome back to bloomberg "surveillance." i'm anna edwards in london. independence day in the united states. some italian banks are falling. a finance minister for bloomberg in london. on the italian banking sector, they seem to be getting to a head. we are seeing some real weakness, some italian bank stocks, some of them down more than 8%. >> that's right. what you're seeing is renewed concerns about the financial strength of the banks. we saw the shares tumbling dramatically after brexit. more so than some u.k. banks. the tension was renewed after a merchant the european central bank asked them to review it's bad debt. what that's doing is highlighted concern that if it needs to do this, and made into raise capital. and who gives the capital for it? after last week, we heard the italian prime minister speaking, trying to find someone within the european law to allow governments to provide some of that capital. anna: there is also to talk about whether there

why are banks, and italian banks, so frail? how much does it have to do with brexit, and how much does it have to do with the china authorities not doing -- italian attorneys not doing enough? derek: it is both. when you have brexit which is implications with how banks operate, that has significant applications. just at the point where the ecb were starting to bang the drum in terms of quantitative easing is working, now we have this in terms of a hit to banking stocks. if that is not rectified quickly, there could be implications for the real economy. francine: do you think it will get uglier? we also had a couple days where markets were not believing if article 50 would be triggered. trying to become political analysts. does it get smoother or does he get harsher? derek: we always said that the fact that absolutely nothing changes for perhaps at least 2.5 years is certainly a reassuring element and all that. but -- in all that. when you have such a big shock that is centralized and focused on by everybody, a larger than usual

steven, did you expect italian banks to be this much in focus post-brexit?ven: you could not have addicted this pdf dressing thing is only a few months ago we were talking about bailing in? and now we are talking about bailing out. the brexit vote caused this flight to quality risk off. it exposed the italian banks as another example is how the -- example of how the global economy is working. .uy: up next, the market open it looks like we are going to open up a little bit softer. that is with the futures are telling us. the opening is next. this is bloomberg. ♪ guy:. welcome i'm alongside caroline hyde in berlin. we are moments away from the start of european trading. caroline has a brief. caroline: i do. two snipers are shot 11 police officers, killing four at a protest in dallas. the demonstration was being held over the fatal police shootings of two black men. the markets remain mixed as you can political chaos gain some clarity. so data dependent. it's john's day in the usa, but can any number convinced the fomc to hike? is a down day otherwise in future

that's an italian problem to solve. what we don't see is the fact there's nothing stopping the italian's setting up some kind of compensation scheme if retail investors in those bonds are hit. they're kind of in a pencil movement here. they waited too long to tackling the issue. now the bail in rules are in place. if you look across the euro zone and compare them to the likes of france and spain, for example. spral banks and governments have used between 8 and 15% of gdp to sort out the mess in the banking sector and italy is no different. the question is how do they go about doing it. these are not questions the ecb can answer and he's not going to want to preempt the stress test. >> a lot of people suggesting perhaps brussels won't make any decisions until the stress test results come. do you think italy is going to get approval for capitalizing the banks. >> the capitalization position is very clear. and the italian government has already accepted it. it's very little space to capitalize and other bank without bailin

big crisis. -- and the italian bank crisis. can the company lift returns? i want to get back to the banking story with the senior adviser at credit suisse, bob parker. on my screen, i have the rankings from the stoxx 600. not one bank is falling. in fact, every single bank is rallying at the moment. it used to be the peripheral lenders on the high side, but not one is in the red. >> i think the first point to make is if you look at most european banks, particularly relative to american banks, price to book ratios are exceptionally cheap, europe versus the states. and also, european price to book ratios relative to the historical values. that means the european banking sector has now reached a point where it is sensitive to go od news and less sensitive to bad news. so, i think the valuation here is providing support for the banking sector. obviously, i think there are a number of themes in the banking sector, particularly with italy. we will have to see what happens with the restructuring of the italian banks. the nonperforming

really the italian banking , it has muchh more broader consequences.y, the studies it has done, italy is taking a long time to resolve these issues, issues i have known about for quite some time. we need to get a move on because the markets are moving against them here. >> tell me how sicilian mortgages show how difficult it is to rescue italian banks? you have written a great story on bloomberg today talking about this. english, packaging of loans that have gone bad, where people have not paid, they have been put into bonds and sold to investors. that is part of italy's rescue plan. i have been looking back at some of the deals and they have gone bad and they have not worked out well. one of the deals that caught my eye was called island refinancing from 2007. securitization of nonperforming mortgages in sicily mainly that have gone bad . the story there is it has taken a very long time for the loans to be worked through. 2001, a 2007 deal, from that had loans in it from 1998 and now 22016, a longtime of unresolved -- to otheraly compared countries? >

guy: going back to the italian banking story. an italian official is denying mr. renzi's challenge.believe that? >> absolutely not. mr. renzi recognizes the gravity of the situation. and il continue to argue am confident he will return to the eu challenge again. europe obviously has attention and a conflict of interest but mr. renzi must ultimately do what is right for the italian people. guy: a silver lining to the brexit story. investors seek haven assets of following the brexit vote. is where we stand on gold silver at the moment. silver trading just high of the 21 that we got to earlier. i want to show you this chart as well. the gold-silver ratio and what this shows you is that people are now buying more silver than gold. interesting trade. fantastic head and shoulders we have over here. take on where we should go with our precious metals holding. do you have gold in your portfolio? >> no. i regard gold as speculation. i worry that commodities generally are now overpriced. at the stories running on china at the moment. that china'sear policymakers have become reactive. policy t

let's talk about the italian banking sector., itrexit rolls seems that weakness that was already in the system, extra spotlight is being dshown on them now. david: nonperforming loans have stabilized at a very low level. the cam dome down exceptionally sharply. the situation is that italy has hardly recovered. we were hoping there would be some solution before the brexit vote. obviously, that would have been the sensible thing to do, but it being europe, that did not happen. everything is washing out from you know, what we saw in the u.k. only a few days ago. and the risk of the bank failing is very high. anna: the bad loans and capital reserves, illustrating the size of the problem, well above 100% for some of the banks. david: unfortunately, the is where things at the moment seemed to be going. a lot of these recent investors are tempted to buy bonds because they are yielding more than their own government bonds. but the banks themselves are not in a safe space. manus: that is the real cultural difference, that in italy there

what does the italian bank -- what is the italian bank solution if politically the european union cannotm of agreement? chris: the solution is new capital, not just debt equity swaps. it has to come from the states. -- germans have to remember we were willing to bailout lehman brothers. we were willing to bailout aig and citigroup. had we not done that, we would be in the 1930's. i think the germans need to take a lesson and realize there are times when you must nationalize and monetize. they need to do that now. if they do not, we will have a surprise one morning. ellen, thank you so much. she will continue with us on radio. robert doll, thank you so much. whalen, we will see you in doubt 20,000. 20,000.w this is bloomberg. ♪ jonathan: goldman due to report earnings within the hour. viewedconnection loss shares of netflix plunging after subscribership felt away three-year low, fueling concerns about their future growth. alix: veronica trump -- melania trump tells the world about her husband but did she use her own words? jonathan: for our viewers worldwide, from new york city, i am jona

vragling says he does not see a threat from italian banks.y to recapitalize but i don't think it's a moment to give up the framework we created over the last few years. the banking union is a major achievement for monetary union. the ecb has done a tremendous operational and an important part of that is the so-called drid and our states. this is important to make it possible to have a common supervisor for the 130 systemically important banks in the euro area and have a common framework. it's very important to protect this framework. the framework also allows many ways out even in a situation like we see today. is inalian government dialogue with the european commission how to apply the framework to these specific circumstances. i am confident they will find a think it's ad not moment to give up the framework that was not easy to create and which is, in principle, very useful to have. be drivingld it investors? to run the banks? >> that is part of our new system. that has to be a mandatory bil-in before public funds can be used in that's part

. >>> the italian prime minster renzi has hit back at critics. speaking during a meeting with sweden's prime minster. said derivative problems were 100 times more risky than italy's nonperforming issues. when looking at the italian banks and they've sold off a lot the last couple of sessions. he has a point. it's not just the italian banking sector that deserves scrutiny. there's more than one issue. >> doesn't make that issue less of a problem though. >> of course not. >> the amount they spent to recapitalize the bank. it's around 18% of gdp. something needs to be done. >> do we need to relook and dig a bit deeper into our european banking health issues. >> bill: i've been saying it for years. i'm not a particular fan of european banks simply because they never went through the capitalization that the u.s. banks had, which has made the u.s. banks a lot more healthy. we just seem to think it's wasn't an anglo sax son problem, not a european problem. that's not the case. the markets are currently telling regulators and governments they need to hav

angry italians.ld be tough. >>> joining us now with more from washington is former secretary tim adams, the president and ceo of international finance. why don't we start on the european banks. i'm curious, it's ten days after brexit, here we are, it's certainly unclear what the future holds in terms of the impact of that. what is your take on its significance for the european banking systems? >> thanks and good morning. thanks for having us on. what an exciting and interesting time to be in the banking business. obviously it just creates industrial uncertainty for an industry that's been buffeted by a whole risk of factors. crushing regulatory changes and a cost of capitol, which is really pretty high. the industry is going through some tough times. it's being reinvested if you will, to a new business model, which is what regulators say they want. it's not clear what those new business models are going to look like. >> it's not clear what a lot of things will look like. we'll ask all of our guests a

you do italian banks, i look at treasuries. just because we saw record lows today, i have the 30 yee yield on treasuries, this is the 10-year in blue, and then the five-year. if you listen, these records are pointing to a slower economic growth ahead. so let's kick it off with markets, bonds, yields in the u.s. and u.k. and also japan today, touching record lows. that's after reassuring remarks from the bank of england, governor mark carney, that he can do more. we also have a bloomberg scoop saying that the e.c.b. is said to be considering looser rules in the aftermath of brexit. he will join us for the hour. he is the federal reserve bank of st. louis, president james bullard, and thank you so much, jim. we are seeing more and more record low yields, and they just keep on going lower and lower. is this pointing to the fact that we don't really know what the end game is, that lower growth is they're stay for a much longer time than we think? jim: well, i've got it at 2%, and actually the growth rate for the whole post-2007 and

what are your thoughts on the italian banking sector?ark: in this current environment with a lot of focus on fragmentation of the eu, eventually practice will win through and the banks will get more capital. >> are you expecting that to be from the public sector from the taxpayer? or will it be managed from extreme circumstance rule? article i think they will do -- mark: i think they will do that absolutely. they clearly runs the risk of uncertainty. that is something the authorities do not want. nor do they want a banking crisis which they will get if the italian banks one capital. the unity that we see from the eu authorities will be undermined by that. anna: do you think the italian banking crisis has the potential to become a eurozone banking crisis? he was suggesting that this is something that would spell out into the rest of the eurozone. mark: the financial system is interconnected. relationships across the region -- an italian banking crisis could spread more broadly. low interest rates and this environment is crippling to bank

if the debt of an italian bank is 4% but the interest rate that the italian bank in charge is much lowerat, then it tells me that is still in a deal of trouble. that is a large part of it. the fact that bond yields would is notrecord low of debt because the eu referendum came out with the market from the result. -- innd side of the story every market around the world, it tells a different tale from the story of growth in equities. case,ense, in italy's equities tell you what is going on. alix: we are having a probability issue. is the debt saying we are not having a solvency issue was the debt talking about how investors want yield in general? and investors want yield the concerns about the individual bits of the funding of the banks have not yet exploded into genuine fear that people are not going to get paid coupon and principal back on time with debt. jonathan: the message from the equity right now is that the mps is trading at 0.09 of book. bloomberg intelligence crunched the numbers. one third of uncovered bad loans. for anyone watching this program today in the fx market, there use

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but look at italian banks.appens they need to bail in creditors and cannot use subsidies. would it be worse than brexit? the final nail in the coffin for the eu? >> i think it is striking that the european market has fallen more than the u.k., fallen about the same as the domestically oriented index in the u.k., the 50 to 50. and that is because of concerns around european banking, particularly italian banks. you had a warning sign last year when you had a bail-in of retail investors who are not really thought they were taken on any kind of risk investment, but there are just putting money into a savings account. they got bailed in to support an italian bank then. so we think we know there are risks that come from the kind of things the european commission is suggesting the titans will have to do as part of their support for a tyra banks. has put pressure on that decision and highlighted their support for italian banks. i think italy has always been sort of the massive mover in this if you really question it eu

so it's not just an italian story. it's a european story. i think that this is going to recover, financial markets are recovering and they have absorbed quite well the short term impact of brexit. this, of course, was within a legacy of a recession as i said, as far as the italian economy and others are concerned. >> how vulnerable are italy's banks now because of the brexit uncertain sni. >> they're not more vulnerable. they've been strengthening over time. the larger cooperative banks have turned into joint stock companies. they have completed a number of successful capital increased operations. merger operations. so if i would encourage observers to look at italian banking system as a system that's strengthening and not weakening. as i said, in all cases and all countries, in many countries, there are individual cases which require particular attention. but as i said, markets are dealing with it. >> the eu is going to be releasing the results of the bank stress test later this week. what are you expecting it to reveal? >> i'm expecting to

not only at the italian level but at the european level. >> mr.odogno, appreciate the time joining us from london. >> i would not agree with that last bit that brexit caused and italian banking crisis. the italian banking system has been the slowest, maybe even worse than greece, in cleaning up their issues, and they didn't just pop out of thin air last thursday. what's actually going on in italy is that 17% of lornes are impaired or non-performing, loans, at the debit it's of the lehman crisis we went through and it's aftermath. we were not even like 5%. to suggest this has been brought about by a referendum in the uk is false. it's an issue lingering a long time and everyone's pretending it hasn't. why it's coming to the fore, scott in october a constitutional referendum, not about banking at all, but that's going to be dragged into this, and you're facing down italy's version of what we just saw with england, and unlike england, it is in the you'eurozone, could b threat to the currently and the union. >> can you buy any of these stocks? >> no.

the majority of the victims were japanese and italian citizen. i also think it's point to note when looking precise will at who the attackers were, it turns out that it's emerging that they all were in their late scenes, early 20s and apparently all products of bangladesh's elite, many attended some of the top english private schools, universities both in the country, outside of the country. among them the son of a former city leader from the prime minister's own fwofrning party. so it if you look at some of the news flow coming out and some of the reaction from the bangladeshi people, they are completely failing to understand how this could happen given the profiles of the people who consider twere the attackers. >>> still to come here, as george osborne unveils tax cuts to create a super competitive economy, our next guest says mark car any wney was the only with a plan. we'll tell why you. that was invigorating! you're probably wondering why i've just carved a giant wooden tiger. well, the answer is that a real one would maul me. i've crafted

how italian lenders are faring. >> we will hear from the ceos of 2 italian banks.the european banks are recovering from brexit-induced volatility. we are halfway through the u.s. trading day. let's go to julie hyman. she is tracking the moves.

, italian. that's probably more relatable to racial divisions than what i grew up with. >> let me go to dr. keith harrison. are we making tremendous progress in the world of race and sterotypes? >> i think the better things get -- things are better than they were. i'm one generation removed from parents who grew up in segregated texas but raised me in urban and suburban los angeles. we're not there yet. we still have a long way to go. i think the visualization of tokenism has gotten better. when i grew up, barker host "let's make a deal." when you told me a brother would be hosting "family feud," we used to watch it and my parents would say "cheer for the black family." and now a black man is hosting the show. we have images of color and tokens of color that we haven't seen before, ie, president obama. >> what often goes unspoken here, especially in the south, you talk about the divisions between blacks and whites in the country, but we don't talk about the fierce bonds between the two that exis

we got a lot of folks on the italian banking sector and the problem there.re you in the banking sector? is it another when you stay away from? robert: broadening your question out to financials, clearly over the last few weeks, they have been hard hit. they are the part of the market since is just to the economic numbers. it is not a powerful market -- a -- we try toarket stay away from the this is interesting we look at the link between the ftse 100 and the 250. as we know the ftse 100 is an international index. companies.g global that explains the outperformance we seen in the 1100 relative to the 250. matt -- anna: robert parkes, think you for joining us. america that does it for today. on the move is next. --a: we will continue to focusing on the move of the japanese markets. but the u.k. can learn from germany. markets look a little weaker. ♪ anna: welcome to "on the move." it is 7:30 in london. we are counting you down to the european open. i am anna edwards alongside caroline hyde. here is what we are watching. brexit means brexit. the message from th

. >> another major concern among the g-20 leaders is the health of the italian banks. the european commission has been negotiating with the italian government over some sort of rescue plan, i talked with all of the players in the european commission, the italian central bank governor as well as the italian finance minister and all of them had a similar necessary and that is that they believe that the fears among investors were exaggerated and they were working closely in order to try to come eu is going to be rele its bank stress test results on friday. for nightly business report, beijing. >> still ahead, when an e-mail from your boss isn't what it seems and could cost your co >>> surging demand for air travel will increase the need for pie lotz. nearly 1.5 million pilots and technicians by 2035. the asia pacific region will account for about 40% of total new hires mostly because of china's growing travel market. >>> there's not only growing demand for air travel, but for electric vehicles and that means there's an increased need for lithium. which is one of the key c

, the rnc and the italian banking system.loomberg. ♪ joe: what's get back to our conversation on the italian economy with the associate professor at the london school of economics to joins us now from london. you mentioned a gap between what italy would like to do or what it needs to do and what it would be allowed to do. domestic it mean for policies if the government is seen as being stymied by brussels or germany and what does it do to the country's belief in the euro? guest: it is clearly not going to help. the main forces of opposition, the parties of the opposition looking strongest at the moment are anti-european parties, the five-star union -- five-star movement and the northern league are hostile to the european union generally. smacks of being on able to protect the italian economy and retail investors because of your pm pressure -- european pressure is going to be bad for the banks. turn to theto brexit. after the vote, there was a lot of concern that it wasn't so much financial mid -- financial risk that was the m

italian banks have fallen more than 30% and year to date, down 50%. the italian banking system has long been troubled and they need more capital. the world was reminded of this yesterday when the world's oldest bank informed the market that the ecb was demanding they do more clean up their ambulance sheets, so their stocks and bonds have fallen further. italian banks have an estimated 360 billion euros of nonper foming loans. no one disputes the banks need the capital. what there is a dispute about is how the banks n prime minister d however, new rules that went into effect on january 1st prohibit a government from using taxpayer money to bail out a bank unless they first punish the shareholders and bondholders and in italy, just so happens a lot of retailer enver to hold bos that d potentially get wiped out or suffer severe losses in the event of a bailout. prime minister ramsey wants an exception and he says brexit justifies that. so far, the germanses and other members disagree, however, there are growing concerns that if investors believe they've

a focus on italian banks.ll have plenty more checks through the day. ♪ tom: francine lacqua and london, i'm tom keene in new york. let's monitor over to the bloomberg terminal. here is deutsche bank, down down down. the critical news is that deutsche bank has rolled over. h'so back to mr. gundlac comments late in the week. trend is there this morning. oh, francine, please. francine: deutsche bank is probably the most important chart. it goes back to brexit and the volatility. keep an eye on that story. right now, to our first word news. >> british home secretary theresa may is laying out a different kind of conservatism as he tries -- she tries to become the u.k. prime minister. she promised to put workers first and make shareholder votes on executive pay binding. she also says that monetary policy has helped homeowners at the expense of those who can't afford to buy. more than a thousand british lawyers say the government must consult parliament before there leave theision to european union. they say last mon

also obviously the italian banks did not manage it in the u.s.the enterprises of a number of occasions where they could have capitalized massively, much easily, probably. so now we are in a situation where we probably need some sort of intervention by the state, kickediously it has just in, and it is difficult in the details, especially. in thewaiting to see front line, and we expect, obviously tonight, and negative review. what is the resolution in this? are we going to have -- at the end of the day, it is up to germany, i guess, are the italian banks going to be sorted, or are we going to see something other than systemic? jacopo: i think in the end animal they will find a solution -- theyo: i think in the end, will find a solution. we will get some sort of or some sort of waiver from the state or some agency. in the end, i think they will sort out things. the problem is not huge if we european, to the economic size. repercussionsle of a negative solution could be much, much worse. i think in the end, they will get a solution. as usual, the det

haxie: many of them were italian nationals. an article in an italian daily focuses on the identities of the attackers, as the piece explains that far from the traditional image you might have of would-be fundamentalists being recruited from poor neighborhoods, young men with little to no education, these men in fact were highly educated. they all lived in a very wealthy kactor -- a wealthy dha neighborhood. one was the son of a wealthy politician. being called the sons of the elite turning to terrorism. cyril: islamic state has claimed responsibility for the attack, with the government is denying islamic state is behind it. all the attacks you mentioned during the month of ramadan. >> there is a very unsettling and interesting article in "the new york times," that reminds us that as ramadan was approaching jihadist propagandists, it is widely believed that rewards for noble acts are rated during the two of robert. ramadan.ert and -- of that is what this article is arguing, and we have seen so very many devastating atrocities in