of the world bank. malpass: thank you, david. nice to be with you. ♪ want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at xfinitymobile.com/mysavings. (announcer) back pain hurts. you can spend thousands and still not get relief. now there's aerotrainer by golo. you can stretch and strengthen your core, relieve back pain, and tone your entire body. (man) and you're stretching your lower back on there. there is no better feeling. (announcer) do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me. it works, 100%. (announcer) find out more at aerotrainer.com. that's aerotrainer.com. >> our world is changing. every day, it ch

need to pay back the world bank in order for the world bank to make more grants and loans to other countries. there's a big reflow, therefore, from historical loans. loans made 30 years ago are still paying in to the world bank, and we use that money to make new grants and loans. david: recently, i thought some of the poorest countries in the world are unable to pay some of their outstanding corporate and sovereign debt, and you are helping to get them to be able to do that? is that right? mr. malpass: that's right. there's a distinction. individual countries make loans to other sovereigns. the united states and germany, japan, china make loans to countries in africa. those are called official bilateral credits, and they become a very large burden on the poorest countries, so i have advocated that the countries be given a chance to defer payment on those loans, and for those countries that are most heavily indebted, we need to look for a way for them to actually reduce the outstanding balance, the burden of their debts to richer countries, so that process is going on, and it also extends, yo

the bank wound up failing in 1858. so the question becomes if you are in somewhere like new york city and someone tries to hand you a note like this in the years before the bank failed, what was it really worth? you know it's not going to be worth face value because you are in new york and new york is 700 miles away from knoxville, so you would not be able to easily bring it back to knoxville for a full redemption. the question becomes how do you assess its value? it looks like a regular banknote just as good as another one. one thing you could do is go to a newspaper. a lot of newspapers carried what were called banknote tables, little charts or lists of information that gave you current money market rates, literal money market rates to tell you what different banknotes were trading at in new york at that moment. so if you look at one of the banknote tables in december of 1856, you would see the bank of east tennessee's notes were actually trading at a 75 percent discount, a huge discount. you have to figure what is go

the world bank is aaa credit rated. he previous fiscal year, we issued $95 billion of debt and this year, it will be over that as part of the surge in , financing. so over the history of the world bank, there has been a very good track record, in part because the world bank and the imf work together in a preferred creditor treatment with the borrowing countries, so they need to pay back the world bank in order for the world bank to make more grants and loans to other countries. there's a big reflow, therefore, from historical loans. loans made 30 years ago are still paying into the world bank, and we use that money to make new grants and loans. david: recently, i thought some of the poorest countries in the world are unable to pay some of their outstanding corporate and sovereign debt, and you are helping to get them to be able to do that? is that right? mr. malpass: that's right. there's a distinction. individual countries make loans to other sovereigns. so the united states and germany, japan, china make loans to count

for the banks. they have had record years, and as you saw by the results last quarter for the first quarter, that only points to better times ahead in capital markets and trading activities in first-quarter results as we see them in april. what happens with the longer-term crackdown on how banks use their money? joe: you mentioned politics of this, and that was fed into the decision to sunset the slr exemption. how much does this particular news raise hackles? sonali: listen, remember can we out through ppp program part two, and firms are having trouble getting my, the issues we saw in the first round of the program starting to come up again? the fun of claimant --the unemployment rate very unequal. however, we are also waiting on a rebound potentially of the community reinvestment act, a lot more eyes on how banks lend to low income communities and borrowers that are struggling. we don't know what will happen with the fiction moratorium's post and hold whose to problems, joe -- a whole host of probl

leading the investment bank and the corporate inking unit. -- banking unit. job that he is separating from his role as ceo so that it can be more in the hands of somebody else. they can oversee it and watch the deputies build up and be competitive in the business of trading and investment banking. shery: this is meant to cover kind of renewed razor focus on profitability. what other restructuring means do we expect to see given that we have already had so many job cuts? >> that is exactly right. when focusing on profitability, there are two sides to that coin. in the last couple of years, you see a lot of restructuring and shaping that can get rid of a lot of the non-core assets there. most notably today, a lot of that brokerage business help to them not really get caught up in this debacle that had to deal with this set of margin calls on wall street. so it is a win for deutsche bank to be away from the worst of it. but that second part of profitability and growing that revenue, the deutsche bank fixed income business is one of the biggest on wall street. and

the last part is, public bank has the potential to support community banks and credit unions. north dakota with the public bank was the only state with a public bank and they have more credit unions and community banks than in eye state. in california, it's near the bottom. so what does the ordinance do? it will create a working group, tackle developing a business plan for a municipal corporation within a year, the group will have three banking experts, four community representatives and as well as a rep ten serve from the representative t willapply for . submit a business plan to the california department of business and oversight. business oversight innovation. and financial protection and funding requirement this is accordance with requirements set fourth and the california public bank act. and so we believe these are the key next steps in order to move forward on this visionary and essential task of creating the first municipal banks here in the city in san francisco. in my few months in this working on public bank, i realize it takes a lot of creativity, determination and

maybe they have overexposed now back into investment banking space what is the readout to the banks looking ahead given what we found out in the first quarter >> yes, i would be cautious to say that if overextended themselves most of the guys pulled back from investment banking. i think what's driven the good results out of the franchise is more volatility we have seen in the market over the past 18 months or so which has really led to great efforts from clients and great volumes. we have also seen margins and spreads as the consequence of the volatility you know, i don't think it's a systemic issue once again. i think it is more a question it has been a very good period for investment banking i think, you know, we also cautioned that you should be careful not to extrapolate the revenue we have seen from investment banking into the future >> when it comes to, i guess, revenue forecasting for the european banks moving into the future from an equity investor per s p per perspecture, the market is exposed heavily to financials and value more generally what about the risk that is associated wit

independence even the european central bank in the end it's the most independent central bank there is if the council of ministers spawn the set which sped up with what you're doing you've got to do this rather than that there's no way an unelected bank can you know tell the politicians go to hell well i mean you know showing christine legarde the former i.m.f. was learning running the european central bank do you think the reason i used the word corruption you use the word collusion is that the accusations are leveled the chancellor is he's an ak about corruption whether it be known domiciles status he denies all wrongdoing of course why do you think he he well small businesses say attacked businesses the head of the c.b.i. saying that hacking a small business is that right rises in business tax and left amazon facebook the massive beneficiaries of the current a virus pandemic relatively untouched as regards tax well i think they haven't decided on a policy a proper policy towards the big that forms and they don't have a policy this is not to be international. i mean the

in the bangs in the banks where's the value still? >> in the banks? >> yeah. where is it? >> you've got a steepening yield curve. you're going to have earnings continue to go up. it doesn't matter -- it matters somewhat if rates are -- if the ten-year is at 2 % if it's a flat yield curve at 2% it doesn't matter for the banks but the curve is steepening. that's where they make their money in the margin. >> the stocks are up -- >> that's going do continue. >> the stocks are up a ton goldman sacs is up 76 % in six months at some point the banks have moved. >> they were down a ton, but they anticipated a higher move in rates they've continued to anticipate that, i mean, how much is already in the stocks, pete? right? that's what you have to ask yourself how much is already in when i tell you the gains, 51% for bank of america, and jpmorgan is 55 morgan stanley is 65 >> well, let's go back and look at how long it was that people said oh, you don't want to be in the banks. they do nothing. we heard that story for years. so yeah, they just did not perform. they lagged for a really

get to important stuff let's check in with stacey maxwell we have a headline here suggesting that the bank of america analysts are ready to take on the widow maker and that is betting against u.s. government bonds which have been in a bull market over what 45 years something like that a long time many decades so bank of america we believe we are at a secular turning point for both inflation and interest rates with quote new central bank mandates excess fiscal stimulus including u.b.i. less globalization fading deflation from disruption and demographics the 40 year bull market in bonds is over they say they say it's over max and he is there to start looking at that top dark blue line is deflation assets and how they have performed over the past few decades and they outperform the inflation assets we've been having deflation they say and they count inflation assets which they predict will outperform the next 10 years commodities real estate tips e.a.a. f e us banks value and cash which is where to put cash of course in inflation asset. is europe a strong australia a. far east deflation asset

the reputation is an issue. clearly trust is an issue. for a bank with wealth management at the core of strategy, these are very serious issues. it is obvious reputation is lost very quickly, but that takes a long time to rebuild. clearly, i think this is something which they have to do obviously. but i think this really needs a lot of work and time to do. guy: the banks on both sides of the atlantic have had a really strong run. sx7p is the code i always type into look at the banking sector and how it is moving, and it has done really well. i wonder whether this starts to undermine people's perception of this bank rally we have seen. do you think there will be concern amongst some investors, yes, this is their reopening trade, this is a sector that should benefit other economies reemerge? financial stability is something that can undermine these moves very quickly, and i am just wondering whether investors are paying enough attention to it. andreas: i think investors might differentiate even more between banks which they believe are past the right

we are ending in the bank of japan. g we did not know was what they were going to do with etf's. they are only going to buy etf's that track the topics. csi 300, extending losses past 2.5%. 10 year yields, we are below 1.7%. we saw investors dumping bonds and yields rising. brent crude, down 1%, below $63 a barrel. wti falling 7% yesterday. investors worried about inflation, higher dollar, that is taking a bite out of commodities as well. some parts of the world are going into lockdown. the inflation debate, also rumbling in around the world, whether or not the boj or the fed. take a listen to what ray dalio told us yesterday. >> there are two types of inflation. we are use to one type, which is when the economy is too hot. there is a capacity constraint. when demand presses up against existing capacity, prices rise. the big risk is of the monetary inflation which would come because there would be more sellers of bonds than buyers. annmarie: ray dalio there. we also caught up with paul krugman. he rejects the threat of i

for them to step in if the banks are doinu a? ~ , for them to step in if the banks are doinu a? ng to understand here is the concept of _ doing a? the key thing to understand here is the concept of the _ doing a? the key thing to understand here is the concept of the green - here is the concept of the green premium. the idea that as we develop more and more sustainable energy technologies that a zero carbon there is a gap between the current cost of fossil —based energy sources and renewable energy sources that we have to bring down essentially to zero and even below zero. so the role that banks can play and pivoting away from fossil fuels is they send a signal to the market. as a pool of available capital dries up, become smaller, fossilfuels companies must work harder to raise the capital that they need to expand. beth then obviously drives up expand. beth then obviously drives up the cost of their operations. that helps to reduce the green premium and incentivize the development of sustainable technologies. which governments around the world as well as the us here with the bid

when the big bank won't do it. help out a lot of people across the board and especially small businesses and we think this will help out a lot and affordable housing, that's where a lot of people, we need to keep telling you, values they say rents are down in san francisco you about rents being done in san francisco when you went from $3,500 to $2,700, it's still $2,700 a month. which to me is nuts. and i think this will help a lot of those working class people stay in the city. and that is so so important right now because as we heard from our last commission meeting with people leaving the bay area, this will help so, i really like everything i've heard tonight from all three of our guests. i got excited here. >> that's amazing and i love that you are excited about it. one last question and this is really for all three of you and i appreciate your patience in helping me understand how all of these pieces fit together. with respect to the existing community bank cdfi environment, are there any holes, areas where we

bank america, as you know, is the second largest bank in the country. was a bank that was crippled in the last financial downturn in 2008 and 2009. it has completely reformed itself, completely changed under the leadership of brian moynihan. the stock trades at a discount to the industry leader, the stalwart, jpmorgan chase. we don't think it should trade as much of a discount to that company, and as it narrows that gap, outperformance is what we should see over the next 12-24 months as the u.s. economy comes roaring bank. bank of america gets 90% of its revenue, and i think you'll see that show up. maria: it's also instituting a lot of technology there as well. gerard, it's great to have you this weekend, thanks so much. >> you're welcome, maria. thank you. maria: gerard cassidy from rbc capital markets. president biden signing his $1.9 trillion covid relief bill into law without any republican support. we'll get reaction from this isn't just freight. these aren't just shipments. they're promises. big promises. small promises. cuddly shaped promises. e

and watched bills maturities rise in value because the central bank has been instrumental in assisting in this bull market in bonds by purchasing a lot of these paper to keep interest rates artificially low and that's the story of the past 40 years if bank of america is correct and the bull market of bonds is over and interest rates are going to start going up that means that pretty much 90 percent of the american economy in the global economy will start to become insolvent so they're basically identifying trends that you and i have pointed out here for the last few years and increasingly making a focal like the globalization they're now seeing that and that's because of the city's trap america doesn't like to see china overtaking it but it is overtaking us so we will withdraw from the world we'll try to make sure that nobody else can trade with china will introduce tariffs on china as we have done and biden has yet to remove the tariffs that trump introduced on many of the goods coming out of china we've introduced tariffs on on goods from canada and europe so i'm not sure if biden ha

and the challengesfo we face going forward. in particular, non- bank financial oria an bfi these are only a portion of the comprehensive workplan but their priority areas that have significant impact on the financial landscape going forward. soen since the crisis of 2008, the non- bank sector has grown considerably. it counts now as you know for almost half of all global assets. and did so the start of the covid event. with this growth has come greater interconnectedness thete complexity in change. even before the market turmoil last march the need to understand the vulnerabilities arising from the non- banking sector as well as those from the banking sector as well as those who have moved outside of the banking system was viewed as critical of achieving financial stability. the march market turmoil help focus our turmoil on non- bank financed and pushed to give further priorities to work in this area. because of the weight this diverse scepter is structured, developing and an bfi perspective requires bringing together regulatory, supervisory and marke

fsb and at the fed, how do you view central banksstepping into this realm? >> i think that, but me speak about this mostly from the fed point of view. that is my position as a governor. i think that is something that technological developers or something should be on top of. we certainly should be looking at that at the fed. i think we have to be clear in doing so that we have framed the issue we are trying to address with central bank digital currency. i do think that a lot of the efforts globally, to look into this issue that fundamental question of what are we trying to do with this? that is not clearly answered. the benefits in countries like the united states, they certainly, they may exist. and we should be actively looking into them. but i do not see an emergent flaw in our system that a central banker digital currency, central bank digital currency would fix. spin make them just going to pressure a little bit my own personal views are similar to what you just said. there is a concern which your colleagues, landau and harold j

the regulators summoning banks. as investors weigh the risk from the block shop with rapid progress with the u.s. vaccine rollout. and on the move again. the suez canal has opened again after the ship is freed. good morning, everybody. 30 seconds or so until the start of the trading session. futures are positioning with a rise at the start of the european trading session. thinking about what the rising yield environment does and does not mean for risk assets. when we saw yields go up at this be come a you might've thought that would be bad for risk assets and we saw that earlier this year but now it does not seem to be the case. that said, u.s. nasdaq futures are pointing to the downside. that may not hold for tech stocks which could still come under pressure. on to the gmm, european equity markets. the spanish ibex up 0.6%. the ftse 100, up 0.5%. making modest rains to the upside. strength in the dollar. that is where we want the conversation to go next. the rising yield environment in u.s. treasury. that is having

the total hit for banks could reach $10 billion. point lower in the last session of the quarter as investors await president biden's massive spending plan. strong data out of china is not enough to stop shares from sinking. don't mise -- miss our exquisite conversation with christine lagarde. sitting down with francine lacqua. very good morning to you. 90 minutes until the start of european trading. this morning, it's all about risk. are these banks taking on too much risk? at the center of that is credit suisse. credits -- s&p is down lighting their outgrowth -- outlook. at one point, they described it as a dream client. turbulent times ahead for the bank. manus: yes. if your goal is a bank, your job is to grow the books, grow the leverage. who drove that proclivity for risk? we are seeing the names out. they build up a number of years of risk appetite within the institution. is it the lady who was promoted by gob steam into the lead position on risk? either way, the market is looking across the spectrum of names. buybacks at risk.

the bank of england still sees it as transitory and are watching. ore evidence than usual for them to actually tighten policy this time around. s really this battle between the markets and central banks that continues on both sides of the atlantic. anna: thanks very much, laura cooper, bloomberg markets live macrostrategist. that's it for the european market equity open. they're moving broadly to the upside, up by .4% on the stock 600 now. the sector breakdown, auto parts seem to be doing well, porsche and b.w. all doing well. the energy names are dragging and we have a considerably weaker price for oil by the barrel and perhaps that's not so much of a surprise. that it as i say for the european market open. "surveillance" early edition is up next. they'll take you through you the action especially on u.s. futures. this is bloomberg. ♪ ♪ pres. biden: we are going to have to stay on top of every dollar spent through the american rescue plan. that's what we will do. >> continuing to do quite well. -- to think about where revenue can come from? >> consu

right the most powerful of the member central bank banks in america part of the federal reserve system he's finally after 12 years of receiving this content here he finally has come around to what the kaiser report has told you over and over and this applies to every country in the world that is printing money williams says there is some evidence that low interest rates can move off asset prices disproportionately held by wealthy households we've talked about this is the can tell in a fact they just describe it can tell an effect which we've talked about on this show many times the money printing causes the wealth and income gaps this guy down there at the new york fed is just catching on to the facts of the situation now kudos to him for now living in denial for not following the crowd of mainstream economists who absolutely deny any connection between money printing that can tell an effect and why this small group of people would have been made billionaires in a last 3 years without actually doing anything other than clipping coupons supplied to them for free from the central

on the kbw bank index. that that is expiring means the banks are going to have to offload some treasuries, leading to some selling in the treasury markets as the 10 year yield is off session highs. we are up a little more than a basis point, sitting at 1.70%. in addition to all of that news on this friday, it is also triple witching. options, futures on different equities and index fees are expiring. that means elevated volume, elevated volatility usually, though we are seeing the vix come in a bit. we have been swinging between gains and losses. at the moment, wti is moving to the upside to the tune of about 2%, but it is a story changing very quickly. guy: absolutely. minutes ago i said it was down. it is starting to move back up again, as i speak. let's find out what is going on. joining us from paris is bloomberg's carrion: -- bloomberg's carrion conan. we have a german decision coming up, a number of other different countries facing lockdowns. can you give us a sense of the acceleration that we are see

the bank shares lower in the session as a u.s. ntral bank denies a request from wall street to extend release of the slr, the sub lament three leverage ratio. s&p and the nasdaq 100 snapped back. and we had quadruple witching which i am told is triple witching, but we will call it quadruple witching for reasons that i am not quite clear. joe: i don't know why it is witching, because it is never that weird. it is literally the quietest day all week. a dramatic weak overall with volatility especially the last couple of days in the wake of the fed and we do seem to see this phenomenon by and large i've tech that had been leading really moving inversely to treasuries over the last several days and we decide to more this week and i think this will be the key dynamic. romaine: that is quite the charts, mean reversion. joe: there you go. let's bring in bloomberg's katie greifeld. is this going to be the thing that we are watching, just how long the 10 year is in control? katie: is there anything else to watch? it seems to be controlling e

business, the natwest bank offers. we are certainly supporting customers through that transition, but early days yet to comment on an ongoing transaction. anna: i appreciate the limits you can say. would you have competition concerns if you saw aib taking the loan book? do you have concerns about where these assets end up? francesca: if we look at flow as opposed to stock, we would have over 50% market share of irish sme lending for each of the last seven years. we feel very confident about our position and the relationships we have with irish corporate. anna: does this say and the negative about the irish banking environment, that natwest has made this decision? francesca: the entire european banking sector is challenged, muted credit formation,ineang cn i.t. and transform. in ireland, because of the history of banking in ireland, there are particular challenges. there is commentary about irish banks, bankers, but i don't think it is difficult -- it is difficult for me to comment on how that fits into natwest's decisio