health of the u.s. bankingtor. that's coming up. >>> all right. 5:30 in new york. welcome in. >> here's your headlines from around the world. >> we'll start with switzerland because the swiss franc soaring 40% after they ditch the cap on the euro. >> move sends stocks on a roller coaster ride. european markets swinging between gains and losses. u.s. futures making a u-turn into the red. >> bank of america and citi group reporting before the bell. >> no deal on the line. blackberry shares reverse course after jumping as much as 30% after the phone maker and samsung deny a report of the $7.5 billion deal. >>> you're watching worldwide exchange bringing you business news from around the globe. >> our top story the swiss frank soared rising sharply against the euro. you can see the move is now 13% to the upside for the swiss frank. it had been even further but has just paired some of the gains it's seen. this also has seen the u.s. dollar after the swiss bank dropped the minimum exchange rate with the euro of 120 f

the key decision was the bank of canada. ou look at the fed's import measures, we could actually have euro-dollar below 1.10. i think the fed would be ok with it. [indiscernible] he supports aggressive policy from europe and japan. that is coming from the fed side. what are the three most important currencies? dollar-canada, dollar-mexico, and dollar-china. dollar-cad already well through 1.20, maybe on its way toward 1.30. dollar-china is wavering right now. let's say we get a negative shock. then, dollar-mex goes through 14 15 or 3.17, 18. then, the fed has a problem. don't really think the ecb matters. the surprise decision for them was the bank of canada. the largest bilateral trade relationship in the world. >> to me, that shows a central bank that's actually very aggressive and will fight. what does it mean for the other commodities? if canada cuts off new zealand, do you think they will go next as well? >> the immediate reaction was will australia and new zealand the next? australia is relatively liquid not as much as

a central bank shocker today and it wasn't from the federal reserve or the bank of japan or even the european central bank. instead, it was the swiss national bank stunning currency markets around the world by removing the price ceiling on the swiss bank designed to keep its currency artificially low against the euro. that sent the value of the frank soaring and swiss stocks tumbling. today, the frank at 1 point up about 20% when it was all said and done against the euro. now, the defensive move comes ahead of an expected announcement from the ecb's mario draghi next week of a massive euro zone quantitateive easing plan like one in the u.s. the past few years. that would weaken the euro sending investors flooding into the frank. lisa boyason has more. she's in zurich. >> reporter: a swiss shock. there's simply no other way of describing what took place on the swiss markets. the swiss national bank coming through and surprising everybody by deciding to scrap a cap that's been in place preventing the swiss frank from appreciating above a certain level towards the euro. at the same time

we're getting some details from the bank. lowering the key interest rate to 0.75% and lowering the key interest rates ending the minimum exchange rates will stop >> let's have a look at your us swiss. it is the highest since the swiss national bank ended that and defended its own currency. >> will get those up for you in just a minute. looks like they continuation of the situation in this environment's though we were soon. they are rallying to the highest level since 2011 after we have seen it ending the floor. it is the reaction of the floor being watched. we were seeing a massive move. >> this is capitulating. it is fictitious. we will find more throughout the day and get experts on. as is them saying they cannot defended. >> we will get you a chart and put it into context. we appreciate that this has been in place since mid-2011. it has flatlined since then. we saw a huge move in real volatility. they took the aggressive move and said they are going to defend it aggressively and have ever since. he barely budged in the pair

that helped the italian banks move to the upside. taking a look at treasuries uncertainly over whether the ecb will be able to push through with it's reform with it's quantitative easing despite push back from policy makers. that resulted in system of this rotation out of equities and into treasuries. take a look at the 10 year german trading at .46% and as you can see how bonds in italy and japan are trading. we haven't seen a big move in the yen given what the boj said earlier this morning. 10 year treasury yield in the u.s. below 2%. here's the move in the currency space which is so much of a focal point for investors. we saw the euro break 115 against the u.s. dollar the first time in 11 years. in terms of putting that into perspective the euro lost about 18% against the u.s. dollar since may of 201. but how are we trading ahead of that tomorrow? the euro is holding on to 115 strengthening against the u.s. dollar. the big story really has been in the oil and commodity space. in fact wti crude yesterday closed down by 4.7% hoverin

is it the banks that we should be focusing on? s been a severe erosion in the equity holdings, but as you say, it is the ability to continue to function within the liquidity squeeze that seems to be pivotal. am i misreading that? >> back in may 2012, greek banks had 140 billion in the e .l.a. people think in terms of bank runs. it is a bank marathon. people withdrawing money slowly. you are not going to see queues outside atm's. what we are saying now is that all the cards, financial cards, are in the ecb's hands or the german hands. what we don't know is whether merkel or germany would want to punish the greeks at this stage, or whether they are going to give them six months of breathing space and then see what goes on. the key aspect is whether they are going to allow changes in the program. right now, the program that has been enforced in greece has said that greece has come up with 4.5% of primary surplus to infinity. this is unrealistic by any economic imagination, to have 4.5% primary surplus forever. you want to say immediat

i asked him what he would like to see the central bank do today. >> i think the central bank should bring it down. i don't think it will. or it will be bringing it down very slowly. step by step. by half a percent but not drastically. >> the finance minister said look the volatility around the rouble has subsided. the inflation rate is somewhere around 12 to 13%. there's a huge amount of space for rates to start coming down. why would the central bank be reluctant? >> they're already cautious people normally. i'm not talking about the swiss central bank but they'll be cautious because they're responsible for inflation. they're responsible for rouble exchange rate and economic growth so we shall see but i don't see a reduction of interest rates today. >> what are these headline rates doing to your business in russia? >> well these create a lot of problems for our borrowers and if it stays high too long it will create a lot of problem. we expect already negative gdp growth. i'm quite sure during the year interest rates will go down but i would rather prefer to see it going down quickly rath

and all the banks reporting earnings. le are looking to fixate on a couple of earnings movers in the equities market. >> i will talk to someone who almost went to the fed. jerry siegel will talk to funny other side of the break. on why he is bullish on the markets. we will ask him about the central bank move. the bush administration, they wanted them to join the federal reserve and he will decline. he will discuss the gop agenda. stay with us here in the loop. ♪ >> we have a breaking story here on target. completely closing its canadian operations. julie hyman covers retailers for us. was this unexpected? >> somewhat unexpected. the target can operations have been struggling for some time. scarlett was talking about it a little earlier. a lot of its customers on the border between canada and the u.s. were coming over from canada. they thought, if the canadians were coming here, why not bring them their? really, it has not been successful in canadian operators have gone after targeting aggressively and pricing and it has ha

this was the best -- swiss central bank has been a casualty and the danish and swedish bank will be on as a result. >> -- will be on high alert as a result. >> they say not the benefactor. it is the dollar. does that continue higher and higher? dollar-yen dollar-euro, dollar-swiss? >> i think it is a little disconcerting that the market is so low. it is such a crowded trade. there is a risk here and that is that the fed could be hiking interest rates. what if the fed doesn't? this is interesting because as we look back at the last payrolls thank you -- payrolls data, we have ever journeys. if we look at cpi in the u.s. what do we get? fairly moderate inflation. the dollar has tightened in monetary conditions. maybe u.s. corporate's are going to turn around and say we do not need it. maybe the fed is going to look at inflation data and say the dollar has been tightening doing a lot of these heavy loading in terms of tightening monetary conditions. maybe they won't hike rates until later. we don't think they are going to hike rates until the end of the year the earliest. >> looks like we

so the banks could do the buying rather than the central bank itself. >> how crucial is qe? e small cap world and focused on the u.k. but many of those is this is might be exposed to exporters in the eurozone. how crucial is it? >> it makes a big difference to the economy. we have had a lot of qe in the u.s. and the u.k. so i don't think it affects the economy but it definitely affects stock rises and share prices. whether the market is rising or falling, it makes a big difference and so we take that very seriously. >> dividend growth for big companies slowed last year but dividend growth amongst small caps is excellent. why the disparity? >> small companies have not been disturbing dividends in the past. some of the smaller companies buck the economic trend and can grow when the world is not growing. many of them don't have good balance sheets. you look at the biggest sectors in the ftse 100, you have oil stocks and mineral stocks and companies that are over distributing, perhaps under pressure to cut. the smallest companies have more headroom to grow. >> this whole commodit

of the bank, 94% below the high. -- elf ofalpha bank, 94% below the height.k selloff. >> that is it in numbers. the chair of the european advisory board joined us for an exclusive interview. she told us despite the market turbulence, greek banks are set to survive. let's get to this with hans nichols's. she is confident. she has confidence. the bart chart tells us differently. >> the point of the chart, is to draw people into how dram atic the decline has been. her job is to be reassuring to read while we were talking to her come of that is when it was publicly reported they had 11 billion and outflows in euros in january. she said the banks have done a good job to strengthen their balance sheet. >> the greek banks are facing difficult situation. because of the recent elections. they are pretty strong. they have a lot of good work that has been done to strengthen their balance sheet. i think they will go through this crisis like they did the last one. >> that is a regulator putting on a brave face. she says she is not overly concerned, but there is difficulty

where are the european banks set? >> in terms of total loss, the 30 biggest banks in the world here are the new rules. we want an awful lot more capital, if we get in trouble we can bail him. the hsbc chairman said, 300 billion euros over the next three years that the european banks need to issues. they have got more work to do. obviously, we saw surprise in market with a seven and a half billion capital raise. they were lower. again, it has just made the market think is the regulator asking for more? for the european banks, last year was all about stress tests and capital. this year, is still about capital. it is about figuring out where your business model needs to go because revenues are still tough. we have seen the results from jpmorgan down. >> i just open the story in front of me and you've hit the nail on the head. commodities and currencies which is very important for names like credit suisse, barclays like standard chartered. that has been the worst year since 2000 and 11. this is going to be a bloodletting.

i think the investment bank was better. or their trading revenue. >> it's a bit of a mess of jpmorgan earnings. usually, it's more organized. at the basic idea is that in all the banks, there was a real mystery for pros like you this time around, isn't there? >> the investment banking is where you have the volatility. you tend to have the most unpredictable earnings, and you have a lower multiple in that business, and as why you tend to get surprises one way or another. >> it has been a funny year for the banks. we saw this spike in volatility in the fourth quarter across assets. you might think volatility is an opportunity, but clearly we saw it hurting jpmorgan sciquest the stock down -- hurting jpmorgan. >> the stop is now hurting. greg volatility -- >> volatility creates opportunity, but what is not good is the spikes. we saw these mini spikes in december and those can be bad, just because they can cost profit hits. >> 990 million dollars in legal costs, does that put a cap on liability, or give us some certainty? >> the

you might be surprised what she says about the bank, as well as the obama white house.he is featured in a new "rolling stone" he's -- peace. >> the significance of the story to me is that it talks a lot about the legacy of eric holder. we finally have someone from the inside who is telling us what a lot of people expected all along that the obama administration had enough evidence to proceed against these guilty banks and they just did not do enough of that evidence and those witnesses. we finally have someone like elaine fleischmann who can tell us all about that and what went on. >> all of that and more, coming up. this is democracy now! democracynow.org, the war and peace report. i'm amy goodman. cliff juan gonzalez -- with juan gonzalez. meet the woman jpmorgan chase one of the largest fines in american history to keep from talking. >> one year ago this month the justice department announced that jpmorgan chase would avoid criminal charges by agreeing to pay $13 million to settle claims that they had routinely overstated the quality of the mortgages they were sellin

the smugglers seem to be outwitting the banks. >> the absolutely have. rs have asked banks to crack down. we saw bank of america require photo identification for cash deposits. we saw jp morgan limit the cash deposits as well. who can deposit cash into your account. 10 some random guy do it? -- can some random guy do it? no. they are saying hopefully this will make the banks do more. >> we have less than a minute left. how does this play into the broader debate on reforming u.s. immigration policy? >> in some ways, it doesn't. in the u.s., we've been focused on what happens to undocumented immigrants. what we should do with them once they get here. we are dealing with the problem on the back end. if you stop the financial pipeline at the beginning, you would be able to put a dent in illegal immigration if you can make it so that it's hard to pay the smugglers. this is a ruthless, big violent business. they need the money to continue operating. washington has not really focused on that, stopping it from the beginning before the people get here. >> the stor

handor banks, but the central bank can help. vide liquidity to them. at the moment, what we're seeing is the whole banking regulation is being phased in this a period where europe needs strong banks to lend. at the same time, banks are not focuseon lending. they are focused on reducing lending and raising capitals. >> back to the question, though. that's true and i think a lot of people would agree with what you said. back to the question, does europe need q.e. ? it is the wrong policy at the wrong time for europe? >> i've been skeptical of this policy all the way. i still think that the e.c.b. has not reached with the policies they have done, their objective, doing more of the same just because it hasn't worked so far is not necessarily a good recipe. maybe you should try a banking policy. they need to fix the banking channel. >> why are they doing it? why is the governing council thinking this is the best solution? >> i think the majority think that moving to q.e. and having some of the side effects like a weaker exchange rate

we are pricing about a 7% move on the banks. >> i want to get your take on the swiss national bank. it hit the 52 week high and the low in the same week. >> that is rather unique. we had flagged the fact the peg was at risk because of qe. he was not going to stand there and buy more and more euros. what has been vicious was not the position on swiss stocks. it was more the effect. there was a feeling the snb was going to go negative rates. we know what happened last week. the positioning of swiss equities was high as well. the biggest market was actually switzerland. switzerland is about 21%. france is 20. germany is 19. if you were an american shareholder you make more on the swiss francs then he lost on the swiss stocks. that attributes to the weakness. if you start making money, your reaction will be to go flat. >> a fascinating insight. coming up, we're going to talk about the fallout. details after the break. stay with us for that. >> welcome back. it's time to talk about the fallout after the swiss franc last week. the loss is becoming but it clear over the last couple days. he

and will go on following the probability of the banks. -- the profitability of the banks. >> the profitability is not the immediate concern of the greek banks. image of their stocks were down 27% yesterday. while we were speaking with nouy 11 billion and capital outflows have left greek b anks. at the same time, she said she was not overly concerned. she said they are facing a difficult appear she stressed the banks have done a lot to restore their balance sheet, add capital since the crisis. >> the greek banks are facing a difficult situation right now because of the recent elections but they are pretty strong. they have a lot of good work has been done to fix their balance sheet. i think they got through this crisis like they went to the previous one. >> jon, i'm curious to see how the greek banks response when they open up in 25 minutes. they will get a abounce or is the market going to perceive it as trying to shore up the markets? >> great work. i am not going to ask what they think of greek banks. i will ask the chief investment officer of state street global advisors where he oversees $

the bank that's buying world bank, that's the kind of bank i like. they are good guys. cramer. (everyone) cheers! glad you made it buddy. thanks for inviting me. thanks again my friends. for everything for all your help. through all life's milestones our trusted advisors are with you every step of the way. congratulations! thanks for helping me plan for my retirement. you should come celebrate with us. i'd be honored. plan for your goals with advisors you know and trust. so you can celebrate today and feel confident about tomorrow. chase. so you can. >>> i like to say there's always a bull market somewhere. i try to find it for you here on "mad money. i'm jim cramer, see you monday. >> the following is a cnbc prime original. >> it is both legal and lethal. seven pounds of metal and plastic... that fire a bullet at roughly 3,000 feet per second. it's called the ar-15. [ shell casing clinks ] to some, it is a brilliant piece of engineering, a modern sporting rifle, and a symbol of one of america's most basic freedoms. >> thank god for america! >> all: pass the law! >> to

we'll be talking to the world bank. the president of the world bank right after the break and we'll continue to pick up on some of the crucial issues right now. stay with us. we're back in two. you're watching worldwide exchange. >>> welcome back. let's get you your headlines with just hours to go before the ecb decision sources tell cnbc the central bank is set to unveil a 50 billion euro a month quantitative easing program and a historic day for the indian stock market. posing above 29,000 as the country's finance minister tells cnbc the economy is benefitting from lower oil prices but he sees no end to the subsidies. and ebay readies thousands of job cuts as it prepares to spin off paypal. >> welcome back to davos. we have been talking about the prospect of ecb qe all morning. will mario draghi be able to surprise the markets given what we heard in the last 24 hours. we have been talking to leaders all morning about this just to get a taste of what they have been saying. listen in. >> the commission respect fully the

at the swiss national bank. crazy, crazy day in the currency market sara. >> correct. this is one for the history books, bill no question about it. it starts with the swiss national bank trying to protect itself becoming awfully expensive and difficult to defend this policy they had in place. a peg for the euro versus the swiss franc at 120. they did a complete policy about face and got rid of it. certainly there was a huge reaction. why now? the speculation is the european central banks is gearing up for quantitative easing or stimulus as soon as next week. mario draghi expected to pull the trigger which will weaken the euro lead to more money pouring into the swiss franc. that and it's also been surging lately because of the mass exodus from the russian ruble. all of that would have made it more expensive and difficult for the swiss national bank to keep this peg policy in play. so it said that's it enough without any warning, and that sent the currency up an unprecedented move 30%. it's called down here a litt

bank? >> why, they don't have the regulation. les: regulate them. >> it is terrible, it difficult today for a bank to start up, it is difficult from a size standard to compete because of government regulation. we have been had regulation on regulation laid on the banks, with massive costs, coming to the banks, there are literally tens of millions of dollars a year we're spending today we did not spend 15 years ago, there is amlbsa a simple area that banks are required to respond to and staff to do. we have antimoney laundering staff coming out of our ears, nobody pays us for that. charles: matt, have you been hot on big bank stocks. i am still worried about larger names like citis and the bank of americas, it seems they have a license to make money as smaller banks go out of. you know it feels like they are in the driver's seat. >> when you are in bed with government officials that helps too. i-- they work together. there are so many little divisions, we break those up, those companies are worth a lot of money, valuation ris wise

we think that we are on the central bank's side. we believe we don't want to fight the fed, and so we would rather expose assets to tips which, by the way, i think might do better than the ten-year hitting an all-time low yield as we sit here today. >> all right. >> if you look at the prospect of upside tips, it's a better way to go. >> made the case, scott, appreciate it, tom, you as well. dom, from tom to dom for a market flash. >> remember the story with kb homes, this is lenar, first quarter profit in three years and forecasted a drop in the 2015 forecast. the shares as a result down 6% sending other home builders down as well. kb homes, you see there horton and kb down. back to you. >> another story coming into focus this hour. u.s. taking first steps to ease the embargo against cuba and new rules again tomorrow. michelle has details on that. michelle? >> just released new rules this morning: i'll answer the two questions most after. can i buy cigars? can i travel to cuba? if you're in cuba, you can bring back $100 worth of cuba

the bank of italy. luis from the spanish finances ministry and the german finance minister and he hasn't been a huge fan with many other germans to it will be interesting to get his take on this platform. >> it was fascinating with the policy makers i was speaking to yesterday the number of times independence was used. >> yes that's critical. a lot of people were saying the germans were dragged kicking and screaming but the underlying issue is is this bank independent or not? and the germans i think have to go with the program if they're going to maintain for the market's view the idea that this is an independent central bank for europe. >> ecb will be buying bonds with negative yields and the german's hated that. >> it ain't a great time to be a saver anywhere in europe at the moment. particularly in germany. let's send it back to seema. >> thank you so much. we have been watching equities move higher. second day of gains after ecb announced the massive bond buying program that's expected to kick start

now the idea is this group of banks the popular banks represent about 30% of the italian banking industry and what would change if the decree were to pasta is going to put within the investment compact, which is a set to pass by the tothto 20th of january the popular banks would no longer have one shareholder represented by one vote but closer to what the other 70% of italian banks are like and that is the votes would be representative of the amount of shares you hold. it makes some of these smaller shareholders weaker but it also does it makes them more likely to merge one within the other. what we're seeing this morning is getting a gains on the idea that we may see some merges and acquisitions in the 30% of the banking sector in italy. he said too many banks and bankers not enough lending. with the investment compact has within it all sorts of moves to help sustain the italian economy. so today we're certainly getting a positive move on those banks and the other ones are following along with it. we'll be back. >> better than 12%. that's a big move for an italian bank. claudia, thank yo

the swiss bank shocking investors letting its currency soar. coming up in less than 15 minutes a can't miss interview with imf chief christine lagarde. steve liesman will ask her about the swiss move, health of europe, terror attack in pairs ris and more. it is an exclusive you will only see here on cnbc. so far, the follow through in the u.s. market is mixed. we have a down market across the board with the nasdaq suffering the most losses down by about 0.7% i should say, the s&p and the dow down just a fraction, but keep in mind the real reaction in the currency markets, those reactions sharp and swift. sara joins us with a look at what's moving right now. >> all through lly -- truly historic day. first on the market action the euro swiss has to be your chart of the day, now only down 14%, after being down as much as 30%. a weak euro and a strong swiss franc after what the swiss national bank did, shocking the markets and saying forget it with the peg of the 1.20 that has been the place about 3 1/2 years to keep the swiss franc from getting too

the only problem is this has to be dealt with the national banks. re the germans will be comfortable -- uncomfortable with not getting a figure. do believe the german government will allow that? >> what will drive equity markets forward? >> if it is not going to be blonde yields, it has to be corporate profitability. we have to see positive growth. we haven't seen a lot of profit growth thus far. with two massive tailwinds now. secondly being lower energy costs. commodity prices are on the floor. we have lower costs. i think those two elements should help corporate profit growth. >> part driven by the regulators. 58% of investors say that the shanghai market will be flat or negative in the next six months. parks i pull back and look at the bigger picture -- >> i pull back and look at the bigger picture. the answer is it is still relatively cheap. massively underperformed the index. there is still in a capture mode. i think there is still plenty they could cap shop. what i see them doing is implementing a move that is sensible. a little bit more regul

of italy, the highest authority in our banking system, has described the ior as a foreign bank on our soil. we see the big walls of the vatican as a national border. we cannot intervene in the vatican. >> narrator: nello rossi is a powerful figure in italy. he prosecutes the most difficult cases: the mafia, corrupt politicians and, most recently the vatican bank, which has a long and dark reputation for financial corruption. >> politicians, businessmen were using the vatican bank as an off-shore to hide their money-- to money launder if you will-- or not pay taxes. >> narrator: for years the italian authorities could do nothing. but when tough banking regulations were imposed across europe in the wake of the financial crisis, only the vatican bank resisted. so the italian finance police put the bank under close surveillance. using all the tools at their disposal, they monitored transactions inin and out of the vatican bank. they made their first breakthrough in the summer of 2010. >> (translated): in that case, it happened that an italian bank received a request from the ior to transf

. >> small businesses usually grow with the help of a bank. not in the marijuana business. s refer to that as money laundering. >> it's been a great investment so far but we would be double or triple the size we are now if we had a line of credit. we don't have access to the normal tools that businesses typically have access to, you know, banking, access to loan, capital. this grow would have been started last year. it's taken us over a year to find an investor so we can get the funds to build this portion of our business. we're expanding this kitchen and blowing out the walls so all of chocolate production is now going to be moving into this facility. so we've got a lot of work to do. this is phase two. phase one is getting the garden up and running. first things first, we need to grow marijuana without our product, we're kind of dead in the water. this is historic. this is the end of prohibition. we want to be one of the biggest and best edibles companies in the world and how we make that dream become a reality is pretty cool. >> not going to believe this. we just lost ano

hopefully the bank has better news. $1.1 million bank. the most expensive purchase i've ever made. if we can't open october 1st, it's going to be a huge blow to us. we're going to start paying the mortgage off september 1st without being open. if something comes back and we're not able to open, it's going to be devastating. >> what do you think? save the best for last. >> you think you can do this one when you got back or before so we can put in the permits. >> i might be able to do something on this. >> this is our best chance of being open october 1st. >> yeah. >> at least we have one good location. >> i know. i know. all we need is the license. >> so if we're awarded the license it will be a huge rush to get the demo done, the inventory in here, the staff trained and opened up by october 1st. >>> game day. aurora presentations are on. medicine man is applying for the mexican restaurant location. starbuds lost out on the bank. but is applying for the dentist office and the strip mall. euflora is trying for three licenses, including the

she will be first deputy of the central-bank. t it will not be her was at the helm of policy that will be running the show this year. that does reflect a little bit of disappointment though it has not been overtly said by officials or the russian president here in how things were handled at least in the very first days. >> ryan chilcote live in moscow for us. stay with us for more exclusive interview from russia. we'll be sticking to the russia businessman, the owner of the evening standard. that is that seven 30 a.m. u.k. time. in less than half an hour, will speak to the ceo of one of russia's largest financial groups. -- that is at 7:30 a.m. u.k. time. >> ok, reporting of numbers. one of the biggest luxury brands it is caroline hyde has been pouring over the numbers. the headlines, it is a mix. it really begins to tie up to the story from orion in terms of what people are spending. >> and it ties in with the burglary yesterday. many -- burglary yesterday. -- many of them -- burn very -- and it ties into the burberry yesterday.

history made at the european central bank. coverage include in a conversation with christine lagarde of the imf. distracted by the european central bank, deflation, negative interest rate, all of that in europe. first, let's go back to our world headquarters in new york and brendan greeley and olivia sterns. >> time for our top headlines. we have to start with the ecb. european central bank on the verge of taking its boldest step yet to fight deflation. ecb president mario draghi may announce massive bond buying program that could exceed $1.2 trillion. it is in that boosting consumer prices that are now falling on an annual basis. not everybody is on board. the plan is been criticized as too little, too late. the head of germany's central bank said it is not needed. in eastern ukraine, the balance is getting worse.

[laughter] you should definitely have it in the bank. having said this -- >> what interested will you offer? >> no, i think the issue of monetary policy is critical but we need to look at this as a four-legged chair. your monetary policy, i think of as qe plus. monetary policy, fiscal policy the demand side, and encouraging europe is doing some and we should do more. structural reforms, of course. and the last is transmission mechanism. we need banks to be lending again. everything has to work together. when you think about growth and jobs and aspect we need to think about is what people and communities are asking of us as business leaders and regulators. education, skills, these kind of reforms are incredibly important. governments and banks working together to foster employment. a huge disruption and we had an interesting session yesterday because of technology. deflationary pressures. having these forelegs working together, incredibly important. i could elaborate on the lending transmission of the role of bank of the transmission of mo

that is the blockbuster news. bankgland policymakers martin we'll and mccafferty have dropped their call for an increase. why? plunging oil prices, and they say, the fall in near-term inflation might become more consistent if lowered expectations become self-perpetuating. this is quite an important shift in terms of the dynamics. these are two people on the monetary policy committee that are u-turning. i had a conversation last week here on "countdown," wehhere they said inflation would fall in the united kingdom. wages, let me give you these numbers. jobless numbers falling. the unemployment rate in the united kingdom 5.8%. a little bit less on weekly earnings. that is a big u-turn. >> thank you so much, manus cranny going through the vaeririous minutes. here, we speak to another governor. let's speak to lesetja kganyago. thank you so much for joining us. we will talk about south africa in a second. i want to get your take on qe from the ecb. markets did not like qe from the fed. are they going to like ecb qe even les

you talk about the swiss bank. we're talking about the indian central bank. think a lot of our viewers are driving down the road thinking what do i do about my 401k? sfroo well, look, i think for the long-term you probably are doing what you should be doing all along, which is i think at this level i would still be overweight equities. yes, equities are not cheap, but they're cheaper than bonds, which in more and more cases have negative yields. we've been looking internationally. we see big opportunities. select in asia, and then with fixed income, you got to pick your spots. nothing is cheap within bond land. we have a couple of opportunities. u.s. high yield i touch on, and right now u.s. tax exempt. the long end of the curve. >> i have a ten foot pole with me right now. what is out there i shouldn't be touching with it? >> well, let's see. >> have you to expect more volatility. what's adding to that is that for the first time in nine years, investors are going to have to contend with the fed tightening rather than easing? >> not necessarily, according to s

maybe the central bank could hold the exchange rate because it's always failed. you never had a central bank be able to intervene in perpetuity and you saw them giving up finally after three years of intervention and this is the single biggest surprise. everybody thought it was the market that was going to drive the euro swiss down. the fact that snb just walked away that's where you see this massive dislocation. we had essentially euro swiss going to parody. >> the inflow of money because they knew the swiss franc was undervalued. >> they realized it was impossible to hold the peg after qe. >> this is getting ahead of it. >> they basically said you know what there's no way they'll be able to hold the peg. >> what about the -- just explain to the viewers, i already understand completely but what about the action that the ecb does next week would make it impossible to hold that peg. >> ecb continues to deval it's currency. >> to southwest airlines the euro would go further. >> it kept putting further and further pressure because the point is that ecb was going to l

have central banks lost credibility after the swiss national banks surprise move yesterday? join in the conversation and get in touch with us by e-mail. tweet us at cnbcwx. our personal handles can be seen at the bottom of the screen. >>> let's see what all this means for markets and of course yesterday having sold off initially because of the shock of the decision markets finish pretty strongly in europe and today we have just come off the gains that we saw yesterday down 0.2%. apart from the swiss index markets doing relatively well despite the gravity of that decision yesterday. let's have a quick look at the main indiana state main indies. france basically flat. italy just up in the green. the smi is down 4.65% in the middle of europe today so it continues to suffer today even though it declines sharply yesterday. let's look at bond rates because all the uncertainty and surprise moves by a significant central bank lead to a lot of bond buying particularly in the u.s. look at the 1.73 yield. significant moves from the down side to the upside. for bond as we have seen the b

the central bank is expected to cut rates later today. the government is pressuring the bank to lower rates for the first time since last july. yield versus fallen heavily in the past month on speculation that policy makers will act to spur economic growth. now with central banks stepping up intervention around the world we're asking you dear viewer whether monetary policy makers are doing more harm than good. should markets be left to their own devices. you can get in touch with us. e-mail us at worldwide at cnbc.com. tweet uts a cnbcwx and stewart would love to get your thoughts on what you have to say. >> we're a little bit more old fashioned. we think central banks should do less and not more and clearly in the sort of look at the really good times, they should be leaning a bit against the stronger growth and trying to calm things down and so on and when we see situations like say 2008 central banksadd adding liquidity. >> but you could argue it's one of the reasons the economy has been accelerating. >> but 2% is what can be achieved.

rbs is set to expose most of the bad bank assets. s the scoop and that is one year ahead of the plan. i am looking at the stock prices. we are up a little higher. you and i the taxpayer need to get our money back. >> it is difficult to predict. what is important in the context is that the u.s. dollar plays a bigger role than the euro. >> that was the ceo speaking to bloomberg earlier about the impact of the swiss franc. he is optimistic for next year. revenue and profit will increase. profit missed analyst estimates. i want to bring you in a man who knows a lot about the industry. what did they not give us this morning that the market wanted? >> there is not really something you can go "yes. code -- yes." that is what a stock is weaker. we have had failures. there is not to hang a hat on. companies have reported suffering from currents the exposure. you have u.s. dollar strength. the point is, most say that this is what they expect to have happen and, assuming average interest rates and exchange rates remain, this is what the currency

the world bank cutting it's global growth forecast. analysts saying that's one of the reasons we're seeing a big move to the down side in copper. but let's get back to u.s. futures. they're pointing to a lower open. the dow indicating a lower open by 48 points. the nasdaq down in premarket trade. remember the dow had it's biggest reversal since 2009 in yesterday's trade. the dow closing in the red after being up as much as 1.6%. earnings could be a big focal point for investors. u.s. earning season kicking off with results from a pair of big banks. jp morgan reporting 4th quarter numbers at 7:00 a.m. eastern. forecast to earn $1.41 on revenue and inves tors will be listening for comments on expenses and how much more jp morgan will have to pay to resolve on going government probes. wells fargo also in focus reporting 4th quarter results at 8:00 a.m. eastern. forecasted to earn $1 to a share. jp morgan and wells fargo, up .3% and wells fargo down about .3%. >> let's talk about banks earnings a little more. banking analyst at rbc capital

losers are the banks, financials. bank, we are still digesting the move on the currency as they remove the cap for the swiss franc against the euro. that is a stronger swiss franc. today we come back a little bit more. only emphasize how historic this was. for a major currency to move this much you might have to go back to 1998 to the asian debt crisis. the move of the week does not beat the swiss franc in a matter of minutes. that historic move, let me show you something pretty special. we talk about german farm yields 0.45% near record lows. we talk about the japanif ication of the bond market. forget japan. this is how it's done. a 10 year bond yield with a negative yield -- three basis points negative. learned to switzerland and over 10 years you pay for the privilege -- lend to switzerland over 10 years you pay for the privilege. the first victim it looks like our some of the big fx brokers. it will take a number of days and perhaps months to shake that move out of the market. >> still trying to count the losses.

banks. the greek banks are operating cyprus, and those risks, of course, are much smaller than the figure i had in mind before i left around 7 to $8 billion. there was about $7.5 billion of loans by those bank branchs in greece. and we have already started the process for those banks. >> i want to get your thoughts on confidence level. it was in march in 2013 when two of cyprus' banks were on the verge of a collapse. it had a big impact on the banking system and confidence levels among citizens inside cyprus given there has been the path to recovery. has that improved business sentiment and confidence levels? clearly, again, all the restructuring that happened which was done by the central bank of cyprus has helped to strengthen the banking system and bring back confidence. i saw a link today in the news that the credit underwent a significant amount of restructuring begun to attract deposit into the system. there's been an increase in the deposit which is a reflection of the restructuring that

perhaps you can talk about separating the investment bank from the consumer bank. estment bank said to team up with consumer banks in order to survive. -- banks had to team up with consumer banks in order to survive. when you are selling 62 a product sprint customer -- even's -- six to eight products per customer -- it seems like corporate banking and investment banking, but usually it is an opportunity for asset management. when you put those things together, taking them apart is much tougher. >> on a final note the interest rates are likely to rise this year. is that going to be the major focus for banks this year? bank earnings? >> i think that will be one of the two big focuses, as it has been the last couple of years. one of the reasons i am skeptical is that forecasters have been wrong for a couple of years. here we are with long rates still very low in comparison to where they have been in the past. we have had an inverted yield curve, flat yield curve, low flat rates. the idea that we will get back to a permanent steep curve -- like i said, i'm a little skep