run the bank. but he fell in love with an american banking family daughter nina lowe. they got married around 1899-1900 and paul and nina first settled in germany but she wasn't too happy living away from more folks and long story short they relocated to new york. very quickly after he got to new york he realized how different the system in an adopted country was. in europe, all of the banks had their reserves in this central reserve. in america, each bank kept its own reserve. when i say reserve i mean rainy day money and extra money. when i say kept their own they would keep it nathaniel philbrick vault or a bigger bank down the block. a bank in tacoma might have kept some reserves in a bank in seattle and a bank in seattle might have kept their reserves in a bank in san francisco. but the bank in tacoma would call in the bank to seattle and the bank in seattle would go to san francisco and you willed you would sometimes get a panic. this would happen every fall whether the harvest season came in

with the tasks remain national center banks. etary policy tasks including managing the national center banks remaining foreign reserves, including gold. after the transfer of foreign reserves to the ecb. policy portfolios, including those related to employees, or providing services to national governments. hold portfolios not related to monetary policy as part of their national task, these portfolios are financed either by central-bank money provided by the ncb, or by no monetary liabilities. this does not interfere with monetary policy as long as it is limited to less than the amount of england's needed by the public. -- bank loans needed by the public. this ensures that they will have to borrow from the system at rate set by the council. limit the sizeto of the national center banks, no monetary policy for almost -- portfolios, and sure the system they will implement monetary policy. of course, when performing national tasks, the national center banks with complying with the treating of including the prohibition of monetary fin

one of the most successful of the early black-owned banks was the alabama penny loan and savings bank. others included mechanics and farmers in durham, north carolina, which is still in existence today. which is still in existence today. citizens and southern philadelphia, pennsylvania, the st. luke's penny savings bank of richmond, virginia, whose founder was madam cj walker, the first woman president in the united states. [applause] alden mcdonald: from 1888 to 1934, african-americans owned more than 130 financial institutions. during that same period of time the number of black-owned , businesses rose from 4000 to 50,000 businesses. african-american banks in our communities, in our country, do make a difference. we help to grow the economy, and we help to build jobs. this has been history, and we continue to do it today. i and other new orleans citizens founded the liberty bank in 1972, followed what i like to call the second civil war, the civil rights movement of the 1960's. historic men and women like my leanian,nd fellow new or ambassador young, who fought and won battles for b

and the bank going forward. and that is luck when you publish. >> host: what has francis said publicly? anything? >> guest: he said all the right things but that did not convince me he was the real deal when it came to the vatican bank because every other pope had the right things when they became pope about reforming the bank and failed to do so but when he became pope in 2013 and set i will reform the bank, i more or less said oh sure, i heard that before but changed my mind in the following way. first of all, whoever is pope today they would have to be reforming the bank, it is a quirk of finances but italy decided to go with the euro and when it did the vatican was in a quandary because they use the italian hero for their own currencies so had decided they wanted to bring their own currency or go with the euro. they didn't know when they went with the euro that brussels wanted oversight on the central reserve vatican bank. as a result of that, the vatican attached their first-ever law against financing of ter

risk is something we have in the context of deutsche bank. >> when was theast time that you saw them send a statement? torch paper ofa balance risk and this is comparing a raft of banks. of insuringhe cost against defaults. >> indeed. you have $102 billion worth of bank debt making investors nervous around the market. we will get more context on that number and show you how it compares to others. we talked about weakness coming through and you can see some of the risk aversion coming with a strengthening in the yen and a stronger negative rate weakening the currency and a distant memory, it would seem, now. the bonds are negative for the first time ever. >> we have gone from negative rates in japan and the yields percent+++oints to >> that was the yield. we want to remind you that we started this year at 3.2%. they seem more worried about the global picture. >> we have gold on the screen for the eighth day in the row -- and a row. -- in a row. you have money flying and it is definitely a risk. >> we have the news now. >> deutsche bank has become the largest

banks. is this team differeime differe? >> the central banks at this point i think are as confused as anybody else. i don't think they will be of great help right now. how will this end? it will end in whwhethe when it. suddenly there's an end to the selling, it has reached a tsunami-like ending. and it turns around. it happens when it happens. i wish i could be more succincs. the margin clerkinsclerks, when take control, they really don't care what the bids are, what the offers are, all they care about is gaining liquidity. >> thank you very much for joining us many the stocks are down. >> september 2013, that's the low where we're at. 17% for the year almost in bear market territory. >> ftse hitting a low. this is the generic drugmaker's third attempt to buy the condition. you can see share prices down about 10%. a programming note. don't miss the ceo on squawk box. >>> cisco reporting a better than expected second quarter helped by demand for its security products and routers, adding $15 billion to its share buy-back program an

the big banks shut it down in the small banks shut it down. you see walmart is a powerful institution. sure of the lobbying system. the way to get the banks to get them on board. that is the current proposal. once you get the banks the only valid opposition is the payday lending sector. i don't want this to pass because of that. the banks are invested in the payday lenders. i think looking at the debate, it's fascinating. it could happen today. we don't want the government involved. that's cool. you have to do some trade-offs. the other trade-off: the can get the banks on board, they currently have the investment assignment. really rich area. you also can't exclude poor people. we didn't like that. and so personally i would be willing to give up. i don't know. >> hi. >> the growing demand of online banking. >> i think if you did have banking it would have to look like any other bank. and on one function. you could have your online checking account they have to give a servicing options. a lot of low income folks live in a cash economy. they don'

i'm hoping that the u.s. banks to show some strength again because i keep coming back to the fact that jpmorgan -- i think he will make $24 billion this year. and i'm thinking, how much can we dent that? it could be hurt but will it be 10% or 20%? i doubt it. it doesn't seem quite right and i think it is the same for a lot of the big banks. christopher wheeler, thank you so much for joining us on short notice. tomorrow, we will probably not mention european ranking directly. we have testimony at 10:00 a.m. to a fractured house. el-erianay, mohamed will join us extensively on bloomberg radio on european banking and deutsche bank. and on his celebrated new book as well. stay with us on bloomberg surveillance. ♪ tom: in a bloomberg surveillance, most of the people listening to bruno mars and beyonce -- there are seven people on 7th avenue listening to coldplay this morning. we will discuss the super bowl halftime report today. -- is back after trying to convince peyton manning to not recover. football doesn't translat

the move might be overdone. banks are trading at a substantial discount to the market and earnings have been rather healthy. not only that, we are still hoping the fed will be hiking interest rates further in 2016, which will improve profitability. an interestingot call on goldman sachs. should they be cutting investment banking fast? you wonder whether or not there is a danger that the answer coming into muscle -- cutting into bitse, cutting of the business that can proffer -- that can generate profit. >> the ones last to stay in the business will see good profitability. a specialisth of to be commenting on this. guy: your expectations of the volatility, the light at the end of the tunnel, it feels like a long way away. >> the market is very unsettled. china and oil prices are very critical. when you look at china, with the has abi floating, asia growth,are of global 30%. it is right when we have uncertainty about the growth pattern in china that we should be worried. oil prices, we have hopes there. in the second ha

at the moment, the banks are taking the brunt of that. lly, low interest rate, there's a number of implications. one is, an indication of a very low growth outlook and for banks in particular, it also reduces earnings prospects. with a very flat yield curve, the margins get pressurized, of course. jon: in the u.s., we were hoping for a steeper yield curve. that is not materialized. i think what is really interesting is the selloff. the banks index is down 20% year-to-date. if you bring up a long chart, stoxx 600 banking index over five years, go back to 2012. the whatever it takes speech from mario draghi. we have had several years of verbal and quantitative stimulus since 2012 and we rolled over and he raced almost all of the gains. is it justified? the knee-jerk reaction is to say no. pl's, are talking about n what that means is yes. they've boosted risk appetite. the fundamentals are still week for european banks. would you agree with that otto:? otto: i'm not sure if i fully agree with that. thanks have done a lot on the capital side,

and the bank going forward. and that is luck when you publish. >> host: what has francis said publicly? anything? >> guest: he said all the right things but that did not convince me he was the real deal when it came to the vatican bank because every other pope had the right things when they became pope about reforming the bank and failed to do so but when he became pope in 2013 and set i will reform the bank, i more or less said oh sure, i heard that before but changed my mind in the following way. first of all, whoever is pope today they would have to be reforming the bank, it is a quirk of finances but italy decided to go with the euro and when it did the vatican was in a quandary because they use the italian hero for their own currencies so had decided they wanted to bring their own currency or go with the euro. they didn't know when they went with the euro that brussels wanted oversight on the central reserve vatican bank. as a result of that, the vatican attached their first-ever law against financing of ter

it is important that the banks are still that's the markets are still differentiating between the banks are in a situation where we have a much better handle of the balance sheet. but that doesn't stop people from having that fear factor. >> i do not have concerns about the bank. bank, one institution raising that level of concern that you get the german finance minister to weigh in, to shore up confidence. i haven't seen this since some bankers told me they were solvent in 2007-2008. >> we have the latest on deutsche bank. a public vote of confidence in deutsche bank. it also gives you a sense about how little confidence there is out there in the market. but we have is a potential plan to buy back some senior debt. ample cash to make such a purchase. earlier, the financial times reported on tuesday that day -- they debt. -- they could potentially be buying some senior debt, buying back senior debt. this crucially would not include those convertible bonds that have been the center of the story the last 48 hours. >> you and i have seen this train wreck before. we have seen this theater.

the banks can't at the moment. if you look at the u.s. economic shocks, for a very large part, are buffered by private investors and capital markets. we don't have that in europe and that is still very vulnerable. we need to develop that. technological elements can be helpful here. if you are worried about the role that banks play, i would say they need to be challenged even more. we need alternatives, and technology can help. john: you can fight back. min: over big banks like brian was saying, the capital requirement, the liquidity requirements, the last resort, capacity building, extra surcharges. the reason we see the big banking system is it is stronger and safer. that is also very important to understand. this is the backbone for the global financial system. this is very important. banking withdrawing from certain markets. commodity market is one. currency is one, we need to understand the impact on the global risk, on global market and liquidity situation and a few other issues. a regulation reform agenda, other proposals. looking f

we were talking about the european banks. left the lancer reality on thursday, when you went off into the distance, the stoxx 600 has stalled by -- has fallen i 6%. 6% decline since thursday night. we are down to the lowest level -- octoberer 2014. we haven't risen. hasek resources, and -- basic resources, it has not made a difference to the european banking industry. the euro is the haven of choice, along with the yen. mr. kuroda and mr. draghi are finding it difficult to the base their currency. is the difference between the italian and german 10-year yield. the spread is the highest since july of last year. we have yields rising in the periphery. many are saying, will we have a replay of the 2012 european crisis? we will speak to our guests of that -- about that. betty: what is coming up in the london close? mark: the head of ciba will talk euro and yen. ministeran finance talks to john nichols. he expect the italian debt to decline and there will be a turnaround for the big market. and they fear that is spreading around th

this is the aphids banks index. this is the gain of the big banks and greece. this tells you everything you need to know about the greek banking industry. since the highs and 2007, this index has fallen by 99 .97%. was worth $83 billion. right now, it is worth $5 billion. talk about destruction of value. quite incredible. betty: it is. flat lining toward the most recent moment. think so much. mark. we will be back with you in a moment. i want to get into the trade in the u.s.. 90 minutes into the session. julie hyman has marked the market desk. that little attempt at a recovery that we saw a little earlier in the session read all three major averages are now turning lower here. indeed infected in part by what is going on in europe with the banks. look at the bloomberg for the imap here to look at what sectors are on the move and what is weighing on things are now. telecom down the most. it is not that heavily weighted. energy financials, consumer discretionary that are causing the biggest declines today. shares were lower, even when oil prices were higher. now,

look at the u.s. banking sector. we're pricing in global recession. >> i think it's a good time to buy back. >> is it? >> yes. because really, the world would have to come to an ends. first of all, because of global banks, the important banks, there's $4 trillion of capital. we're completely in a different place. there's no scenario where banking blows up today. those are kind of doomsday scenarios. they're not justified. there's an overemphasis on the oil sector. there's a big -- two theories of what's going on out there. we as a house think it's completely a supply problem. people are scaring themselves about china. the slowdown in china is by design. >> but people are concerned about a broader depreciation of the currency and the spillover effects in asia. you think it's a complete overreaction? >> of course these are real worries, but i think there's an overstatement. it's difficult to manage. it's a difficult transition, but the consumer is really reacting well. the oil prices is very good for the u.s. consumer,

the bank has ample cash to make the purchases. what a three-day move in deutsche bank's share price. check out some of the other big moving shares. hermes was lower. the french luxury handbag maker says that they may miss their medium-term goal showing how china slowing economy is weighing on even the most exclusive brands. revenue could rise by less than its goal of 8%. also reported its lowest sales growth in six years today, as november's paris attacks led to a drop in tourist spending. maersk.ap muller shares down by 6.3% today. reported an 84% plunge in profit last year. by lowerunit was hit energy prices. its container division got squeezed between trade growth and overcapacity. million net income includes a right down by two point $6 billion and underlying profit this year will be significantly below last year's $3.1 billion. 3.1%.erg share up by heineken forecast higher profit fueled by market such as the u.s. and asia. even as they prepare to face a inbev'sllenge from ab purchase of sab miller. beer prices in china, russia

is it the european central bank? if you have directors on board it, are you going to have the regulators and other shareholders on board as well? there are so many complexities and difficulties with pushing banks in a particular direction that for now they are staying away. alix: can you compare the activism in u.s. banks versus european banks? lionel: i think there is more activism in the u.s. in general. i think that again, the european issues are far more complex. we have a lot of countries involved, a lot of different national regulators, and a lot of strategic issues that have not been worked out with the same aggressiveness. we have balance sheets that need to be cleaned up, business lines that need to be sorted out, and again, even though you would think this would attract aggressive investors, there are so many unknowns and so many future losses that could hit these banks that activists are, in europe, staying away. alix: part of what we hear when european banks are at risk is "oh, no worries, mario draghi ha

and the confidence in central bankshat have been relied on from 2008 post-financial crisis. that's not working. >> all three of the major central banks facing their own demons. debt in europe, equity in the states and japan. janet yellen had to deal with testimony this week. there's the opening bell and the s&p at the bottom of the screen. at the big board, the u.s. coast guard reserve celebrating its 75th anniversary. at the nasdaq, scholastic corporation, and clifford the big red dog celebrating valentine's day. we're not done with data. michigan sentiment coming up in a half hour, and dudley taking some questions at a press conference might be interesting. >> might be soothing. >> yeah. >> he often has that effect. of all the central bank presidents, he's important because he's part of the core of the fed but he has paid close attention to the economic data. in fact, it was him who brought up the confidence read as an important signal which is why we're looking for that at 10:00 a.m. it can often be a realtime read o

we hated that we had to bail out the banks. across the political spectrum hated that as well. we see the anger of the american people still today. none of us want to be in that situation again. so dodd-frank was passed very quickly because -- which i supported. but the more transformational measures were taken off the table. things like breaking up the banks or putting so much capital into the big banks that you turn them into utilities, so they virtually cannot fail. there are a number of other options. here we are six or seven years later, and in my view, we have done some good. the banks are safer, they have more capital, deeper liquidity but we have not taken the risk of a bailout off of the table. if a number of banks run into trouble at the same time, policy makers will have to bail them out. stephanie: you never take risk out of the system. maybe you take it out of banks' hands, but somebody will be left holding the bag. it is those investors who have risky assets. it's insurance companies, 401k's, so it is not evaporati

the banks are out of powder. arket is saying no interest rates in the coming year. that is 100 months of effectively at zero money market cost. that will destroy a financial system on eight years of zero cost money. person afterd person after person come in with a very different picture. in fact -- came on and said there is a 25% chance or less of a recession. what do you see that none of them see? >> i see that out of the last seven recessions, wall street and goldman sachs in particular, have predicted none of this. >> i don't like we are headed into a recession at all. -- people's behavior is driven by what they hear and read. fear is dominating the market. the market is irrational. i do agree with you. the market doesn't have a mind. it can't associate with people the way you and i can do. it is a collective reaction. >> the market is seeing something that economists are missing or the market is concerned for the sake of being concerned. all sorts of things to be concerned about. we could be concerned about a

the bank of england will have the right decision and the inflationary report. re, we will dig into it with deutsche bank's u.k. economist, and still with us is the jeupiter asset fund manager. you are a phd holder in economics.talk to us about the economic ramifications of what we are seeing in the market. low oil price, concerns about market. how much will be here from the monetary policy committee about the effect of this on the u.k. economy? >> i think mr. carney and his team will sound very dovish when they give that press conference. the only thing we have to bear in mind is what does the fallen oil prices relative to the last inflation report? what does the market report, the fall in sterling? not over the next year -- we know that will be revised down -- but what does it do to inflation forecast two years ahead in three years ahead? that really gives the signal to the markets as to whether they believe the current profile for interest rates. caroline: we're expecting it to overshoot inflation, to get above that 2% target rate. but this disconnect they are

the banks over there are suffering. 'll talk about that with some of our guests coming up here and the impact that's having on our markets as well. >> it started in the overnight session today and it looks like the worst of it happened just as markets were testing that 1812 level and falling through it and this news out of opec, the u.s. benchmark has moved up more than $3 off the lows of 30 minutes ago. we'll get more insight from former leaders in the financial space over the next two hours about what's happening across the financial complex here. peter sands is joining us and citigroup vice chair bruce rhodes and former wells fargo ceo. >> not just the banks. look at boeing. biggest drag on the dow today, it was down 11%. we have details on the probe into boeing's accounting coming up. stay tuned for that important story. >> as that 10-year keeps dropping, we have a few high paying dividends with strong balance sheets maybe that could provide a little safety amid the sell-off. >> so much to get to. i don't know how we

so he is buying into the bank. he italian government, separate to this, has brought in a number of measures allowing bad loans to move into securities for sale. this happening as the prime minister matteo renzi vowed to, quote, do everything needed to resolve the problem of nonperforming loans. italian banks have lost some 40% of their value over this past year. joining us is enrico letta, the dean of the paris school of international affairs and the former prime minister of italy, as well. welcome, enrico. good to have you with us. >> thank you. >> and julia is joining us from brussels. good to have you with us again, as well. let's talk about what we're seeing in the markets at the moment and what the signal seemed to be. we have this massive sell-off taking place from within banks. some are saying it's being led by italian banks. what do you see? >> i think what the government did yesterday, it was in the right direction. but we need decisions that ever important today. we need to complete the banking union, in m

in the big banks? when you say we are protecting consumers -- >> while at the same time differentiating the regulations between the community banks in the big guys. >> consumer protection is an important part of our supervision. cfpd examines the larger banks in terms of their consumer compliance. is now withbility the smaller banks and community banks where we have consumer protection enforcement. we try to tailor our examinations, our consumer exams of the community banks so that they are not burdensome and they are focused on real risk. >> do you feel you have been successful in that tailoring? >> we are very focused on regulatory burden on community banks. we are trying to do both in the safety and soundness side and on the consumer compliance side, everything we can to reduce burden while still making sure that banks abide by consumer protection. quickly, we are seeing consolidation in banks in montana the rapidly. is that true throughout the country and are you concerned? >> there has been consol

the banks can't at the moment.you look at the u.s., economic shocks, for a very large part, are buffered by private investors and capital markets. we don't have that in europe and we need to develop that. that makes it very vulnerable. technological elements can be helpful here. if you are worried about the role that banks play, i would say they need to be challenged even more. we need alternatives, and i think technology can help. john: you can fight back. ,> after the financial crisis it dramatically enhanced over big banks with liquidity and the last ability for capacity building. i think that is the reason we see the whole banking system much of stronger. important.lly the commodity market is the one, currency is the one, and the banking becomes smaller. we need to understand the impact on the global risk, on global market and liquidity situation and a few other issues. regulation reform agenda, other proposals. looking forward see whether when , the banking sector withdraws bonds, what is left to the market. b

it gives you an option on the central bank. i think the central bank system will break down. head of the bank of japan is going to a negative interest rate. david: there you have it. go first.harper, christine: -- said bringing back qe this year. it was nice that mohamed el-erian reminded us that the markets are working, even just for now. so even though there is gloom and doom, it is functioning. stephanie: for me, david stockton is a critical guide that across the board and the messages for him was scary. david: for me, it was mohamed el-erian saying we cannot keep going that way and he doesn't think janet yellen understands that. stephanie: there you have it. today's bloomberg oh, what a day. we will see you tomorrow. former morgan stanley ceo. ♪ >> it is 10:00 a.m. in new york, 11:00 p.m. in hong kong. welcome to bloomberg "markets." ♪ betty: from bloomberg world headquarters in new york, i am betty liu. we are half it hour into the trading session. stocks are trying to make it back into the green as global equities near a bear market with volatility near a seven-year hig

bank. we will talk to the ceo later today. what is happening to a commercial bank because of negative rates? >> did that stop the ecb? they do not understand how banking works. i think not. do you think that drag has a good understandinghi? >> there are as many negative numbers as positive numbers. you can cut from zero to minus infinity. the reason they were bullish is because they think profits stop at zero. there is a negative world out there. do not worry. they are going nowhere. .p next, do not blame the fed that is the message from janet yellen about the recent market volatility. we will discuss that on this program. that is next ahead of the open. ♪ jonathan: hello. welcome back to "on the move." good morning to you waking up in the city of london. good afternoon if you are in asia. .6%.futures up by about the message from janet yellen, do not blame the fed. that is what she said yesterday. she told congress the central bank was not at fault for market turmoil. >> around the turn of the year, we began to see more volatil

the risk reward ratio. i think what you saw at credit suisse and deutsche bank was, let's preserve the investment bank. ets did not like that. saw that go by the boards and never have new ceo's in place who are going to make these deep cuts. the market is looking at, this is restructuring mark to and mark three. guy: can we look to the atlantic and say those guys are the models that we need to use? or if the operating market different? >> they look across the atlantic with envy. john cryan talks about but to be fair it is much tidier in the united states because you have one federal government and the states must comply. the rules get implemented, the banks have to cope and they took all their losses early. here you have different countries with different cultures and banking regimes that must be sorted out. that was not until 2012 that the banking union came into to address problems in banks in member countries. it just takes longer because there are different countries. the big debate that is taking place between the u.k. and brussels and france at the moment is what happens to london next. how pivota

hardest to get in the door of a pnc bank in zebulon. he didn't get in thanks to the actions of a brave bank employee who was trying to protect his staff and customers....wral' s amanda lamb tells us....it's something you've just got to see for yourself. it was a typical morning at the pnc bank on arendell avenue in zebulon... chief tim hayworth/zebulon police: the manager of the bank happened to be standing in the lobbying looking out the door. the manager sees a man dressed in all black running across the parking lot wards the door of the bank. chief: the manager grabs the door and enters a little game of tug-of-war... the door opens a little, but the manager holds on. chief tim hayworth/zebulon police: the suspect produces a small black semi-automatic handgun and begins to strike the window and the manager doesn't give up. the suspect does give up. chief: he runs off without ever making it into the bank. bank employees had already alarm button, and police were there in under a minute to find people inside e bank frazzled, but safe. chi

risk by the large banks? mr. kashkari: when you look at the savings-and-loan crisis, you have a thousand small loan sales. i was devastating for communities. that was a bad thing. but there was no broader risk of economic contagion or broader collapse. if we can get the financial system -- system where we can take on major shocks with out requiring -- without triggering downturn, that could be our goal. >> there was a recession, and the recession was prolonged, and d by the was dampe credit restrictions that occurred after that. so i guess, if you took a big bank that was systemically important, and broke it up into eight smaller banks, but each had the same balance sheet, and the same strategy, you wouldn't be doing anything. mr. kashkari: agreed. if you break it up and there is no change in behavior or model, but when you have corporate governance with different ceos and boards, with different geographies, i will probably not be the situation we will end up in. i'm not saying breaking up the banks is one of

richard: the european banks are clearly going to have the biggest challenge, the likes of , withhe bankcularly the ecb potential move to negative rates. that is negative for the europeans. lowhe u k, we have record interest rates from the bank of england. that takes money out of their pockets. it is something that if the rate was to rise, they could earn more on the deposits they have. it is something they are struggling to cope with. the only answer in this environment is to cut costs further. the profitability measures are really being driven by those cost cuts. here's a question mark as to how far and how quickly these banks can go to deliver those improvements in this low rate environment. it is a difficult time for the banking industry across europe. guy: just to update you on what is happening, rbs down 11%, the most since 2012 after another banking loss. let me take you to the issue of the oil sector and drag that in. nice piece this morning talking about the fact that the banking sector in the u.s. has been much more upfront about its exposure to the oil sector. ultimately, a sm

we have the bank of japan and ecb pushing us into negative rates. i think that's what setting alarm bells ringing within the market. i think investors are getting worried about the outright level of yields and taking some profits but also the volatility that's being exacerbated by these central banks. i think it will continue for our little longer. >> exacerbated perhaps by the central banks. we also have to keep in perspective when we talk about the moves we saw in the japanese market today, thin trading there due to the holiday. concerns over volatility there as well. but overall, i think this gets to the point if the safe haven trade continues, where should investors go? >> absolutely. we've seen the chinese are on holiday this week. we'll see what happens when they come back. obviously the china story is a big concern for the global markets as a whole, as is oil. if you're looking for safe haven, if you're looking to part your cash, i think u.s. ten-year treasuries offer relatively good value. we're going to get janet yellen talking on wednesday.

the reserve banks are under the dominion of the federal reserve and play divdeneds to the private banks. but the federal reserve is an organization and its leadership is every bit a public agency. >> it is appropriate to engage in a fundamentally political discussion. >> this is going to be it was we have getting into a debate but anything that any political body does is political. the people on the federal reserve were appointed by one president or another. the same way people in any agency were appointed by people at the fcc or whoever you want to name. the reason we have an agency structure is to create a level between them and the people running for office so you don't have congressmen running for office and people with cheap interest rates and money as way to get elected. in 1913, we didn't have public agencies. so the idea of subjecting a private industry to public super vision was very radical. the first draft of the federal reserve act it bankers in the federal reserve board chosen by bankers and william james brian who really had gotten wilson his nomination and was secretary o

what does that signal about where the bank is? take a step back, do you think they will see the number called alm down? down, but from a year ago it is significantly higher. they're obviously trying to solidify the bank, because it is going to be a bit of a rocky time period with emerging markets the way they are. if i could jump in and take you back to your old stomping ground in new york. we have this remarkable weather out, making his apology. what do you make of it, and what you make of the delay? why is he speaking out now, and what will the implication be in new york? michael: i have to imagine the delay is due to a lot of legal and regulatory issues, and there have certainly been a number of cases that were brought out of the london whale incident. as far as his letter saying -- lot of the e-mails show that it was not a rogue trader, that it was a bank trading strategy that went wrong. sayingon't think he is anything particularly controversial there. you saw there was a lot of discussion of the strategy at the highest level

the u.s. banks will perform better much cerner -- much sooner than the european banks. y: we will talk about the fed. if you want to find these charts on what is happening on the book value of these banks go to the website. minutes away now from the open. we are going to look at the potential corporate move gold.ing the minor, rand minors areke the going to outperform the fair value calculation of the bloomberg .85 higher. decent performance coming through. that is what is coming up next. the market open. ♪ guy: 7:54 a.m., london. we are into the countdown for the market open. let us get you some of those stocks you need to be watching. caroline: i am kicking off with one of the best performers in the entirety of europe. randgold. they have more good news. gold has climbed 9% this year. seeing the results living up to expectations as well. a record amount of gold production. they are digging more out of the ground. it shows you how the share price is phenomenally exceeding where analysts expected the stock to go. this is your overall average price target. it is well belo

do you want me to give the bank money to the-- to the police, and the bank robbers to the bank, or the other way around? the other way around. yes, master. immediately. [chuckles] right. [sighs] [rustling paper] [mouths words] master? mm? which shall i do first? get the bank robbers to the police, and the bank-- here, i've written it out for you. oh. ha-ha. that's clever. [both chuckle] i only wanted to do it right. go! you know-- one for you... and one for me. and one for you. one for me. and one for you. one for me. and one for you. and one for me. i gotta hand it to you, milton. that was one sweet plan. and one sweet little pigeon. don't you forget that. oh, boy, money. one, two, three, four. milton. the pigeon just flew in. please get your things ready. my master has instructed me to take you to the police. the police?! why, ma'am, what on earth for? because you tricked me. thank you. [groans] [crash] now, i'm going to take this money back to the bank. to the bank? of course. that's where it came from. oh, but ma'am, the bank is closed. oh, that does not matter. i can get in. you c

and the european banks. and the continued selling, day after day after day is eye-opening for certain. do you think that it could be choice three, if you will, on your list, and it's something we're not taking into consideration yet, that could end up being contagious, systemic, or words that bring up things like '08? >> well, personally speaking, i find it quite hard to see exactly what that big thing, that nasty thing in the woodshed, if you like, could actually be right now. because the reality is that the u.s. banks have really increased their capital reserves since 2008. if you're talking about the energy shock, and you look at the big banks, yes, you're going to see some losses and write-offs from the shale sector, but for the most part, the u.s. banks have got big reserves. and even in europe, there is certainly much thicker capital cushions today than there were back in 2008. now, if there was a much wider meltdown, say, of the chinese economy or something like that, that would certainly be very painf

have two.s up, i what the banks. the stoxx 600 22% decline year to date for european banks. you would've thought it would've been the energy stocks that that the big hit. given what we've seen, even sent i went to speak to deutsche last week the stock has been continually falling and falling. there were some big name seeing big drops. jonathan: deutsche bank losing a third of its value in under a month. we used to talk about volatility being good for banks. but that is challenging market conditions. less favorable market conditions for pretty much every single division. this is the kind of volatility they want, is it? i think the fault of the market was described as brutal. ita capital market business, is sure for asset managers as well, there's a high operational gearing to the value of the asset in the marketplace. just as there is will companies. challengesundamental for investment banks. the newish management and deutsche it's acknowledging that. and they are squaring up to that in the sense. jonathan: is a quick enough? the benefit of hindsight, how fast can you go and

across the economy, then banks just look to cheap. how does the markets he lloyd's versus barclays? it is really hard to understand as a business, lloyd's is much smaller in so many ways. when you read the analysts notes and compare and contrast, what easy? richard: i think you summed it up perfectly with that barclays is a more complicated stock. the africa operations, the u.s. operations, and the investment banks. they are trying to rationalize the size of that investment. the costs are too high, return it equity isn't good enough. it is much more straightforward. investors are paying for that at the moment. around 95% correlated the u.k. economy. that is a good story as well. >> i'm not really sure what barclays wants to be at the moment. we haven't seen strong leadership there, where they going? >> we hoping have an update on the third of march. the new chairman, john mcfarland, they will set out to their vision for the banks. we have had some exclusive reporting that they're considering what to do. if they sell that, that could br

it is the same thing. what bankso when they haven't got enough capital is stretch the time period out. what happened last year was that they closed the funding gap to zero for the first time. now, the banks can't be tipped over by a liquidity crisis. move the can kind of recognition front and center. we are getting this bigger appearance of losses. cryanhould guys like john go out and raise money? he's resisting the temptation. should that be the logical thing? -- theou can raise money problem with banks raising money is that it is almost impossible when you need to raise money. the traditional way is through retained earnings. if you want to look at the state of the banking system, you could look at pre-provision earnings. what the banks have to do is use most of these, or retain most of these earnings, to absorb the losses. guy: they are going to miss out on opportunities. on the broader sense, we are heading to a capital markets union in europe. you look at deutsche's trading numbers, they've got a bond that is co