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Speaker 1: This is Bloomberg Daybreak here for this Wednesday, the twenty

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Speaker 1: ninth of March in London. Coming up today, Back to

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Speaker 1: the future, UBS brings in former CEO Sergio and Marty

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Speaker 1: to take on the top job banking on an overhaul.

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Speaker 1: Financial officials outlined plans for our after regulatory changes and

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Speaker 1: raided French banks could face more than a billion dollars

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Speaker 1: in fines in a tax forward probe, a UK green tax,

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Speaker 1: putting the brake on a combustion engine ban, and the

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Speaker 1: job's most at risk from chat GPT. Those are the

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Speaker 1: stories we're looking at in today's papers. And I'm Leanne

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Speaker 1: Geron's plus the five million euro Deutsche Bank trade that

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Speaker 1: may have triggered Friday's global rout. That's all straight ahead

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Speaker 1: on Bloomberg Daybreak Europe. The business news you need to

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Speaker 1: start your day in just one fifteen minute podcast on Apple, Spotify,

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Speaker 1: the Bloomberg Business App and everywhere you get your podcasts.

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Speaker 1: Good morning, I'm Caroline Hetger. Here are the stories we're

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Speaker 1: following today. UBS has named Sergio Amotti as its new CEO.

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Speaker 1: The news comes a week after the bank stepped in

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Speaker 1: to buy troubled lender Credit Suez for three point three

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Speaker 1: billion dollars. Bloomberg's finance reporter Stefania Bianche reacted to the

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Speaker 1: news that the current CEO, Ralph Hammers, will step down.

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Speaker 1: I think this is this is a surprise. We know

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Speaker 1: now that Ralph Hammers will stay on. He will be

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Speaker 1: working alongside Amotti and he will be consulting, so he

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Speaker 1: will still be there, but at the end of the

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Speaker 1: day it will be Amotti in charge. Bloombog's financial reporters

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Speaker 1: Stefania Bianche well A Marti previously held the top job

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Speaker 1: at the bank for nine years and repositioned the lender

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Speaker 1: away from riskier trading and towards managing money. Following the

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Speaker 1: global financial crisis. In terms of the banking industry more broadly, though,

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Speaker 1: top US financial officials have outlined major plans to of

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Speaker 1: all regulations in the banking sector. Answering questions from the

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Speaker 1: US lawmakers, the FED Vice Chair for Supervision Michael Barr

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Speaker 1: suggested that capital and liquidity standards would need to be strengthened.

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Speaker 1: The Democratic Senator Elizabeth Warren quized officials have a listen

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Speaker 1: to this telling. Exchange Vice Chair bar let me start

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Speaker 1: with you, do you believe we should strengthen our financial

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Speaker 1: rules going forward. Yes, I do, Senator Chairman Gruenberg. What

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Speaker 1: about you? Do you agree with President Biden that we

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Speaker 1: need to strengthen our banking rules. I do agree, Senator

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Speaker 1: Under Secretary Liang? Do you agree with the President on this?

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Speaker 1: Senator I agree that we do need to prevent these

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Speaker 1: types of bank failures. Well, I'm asking you, of course,

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Speaker 1: we need to prevent them by supervision. But that's not

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Speaker 1: by simply wishing it. It's by stronger regulation. Is that right?

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Speaker 1: I agree? Senator Okay, good, Senator Warren there speaking to

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Speaker 1: the FED Vice Chair for Supervision Michael Barr, FDIC Chair

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Speaker 1: motto In Greenberg, and the Treasury Under Secretary for Domestic

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Speaker 1: Finance Neddie Liang. Now any proposals, though, will be met

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Speaker 1: with stiff opposition from Republicans who say that regulators fail

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Speaker 1: to oversee foresee the dangers of high inflation and rising

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Speaker 1: interest rates. Meanwhile, the UK's Chief Secretary to the Treasury

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Speaker 1: has once again sought to reassure markets over the stability

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Speaker 1: of this country's banking sector. Speaking to Bloomberg, John Glenn

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Speaker 1: says that it's not wrong to assume that the challenges

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Speaker 1: facing the US banking sector also apply to Britain. The

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Speaker 1: structure is very different. We've got a small number of

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Speaker 1: very large banks and their capital requirements are very rigorously

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Speaker 1: enforced by our regulators, who obviously had a step change

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Speaker 1: after the financial crisis fifteen years ago. So I don't

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Speaker 1: want to be complacent, but I do think that that

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Speaker 1: means that we're in good shape. But obviously we've got

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Speaker 1: to keep aware of all the challenges in different banks,

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Speaker 1: and the different profile of concentration of customers, the different

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Speaker 1: liquidity challenges and issues that they all face in different ways.

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Speaker 1: John Glen there speaking to Bloomberg's and Marie Hordern in Washington.

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Speaker 1: This as US bets against European banks have hit a

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Speaker 1: seven year high and reflecting on those trades, the Bank

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Speaker 1: of England Governor Andrew Bailey yesterday told MPs that markets

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Speaker 1: are testing the sector for any signs of trouble. But

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Speaker 1: very strong for you with the UK banking system is

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Speaker 1: that it is in a strong position. But capital and

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Speaker 1: liquidity wise, I think there are moves and markets if

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Speaker 1: you like, test out firms. I would not want to

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Speaker 1: say that those, in my estimation are based on identified

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Speaker 1: weaknesses more than testing out. I mean there is quite

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Speaker 1: a bit of testing outgoing on at the moment. I

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Speaker 1: Speaking to the UK's Treasury Committee, Bailey also echoed John

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Speaker 1: Glenn's view of the UK banking system, saying that it

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Speaker 1: remains in a very strong position. He also described the

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Speaker 1: collapse of Silicon Valley Bank as the fastest passage from

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Speaker 1: health to death since Bearings Now. Regulators believe that it

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Speaker 1: is a single five million euro bet on Deutsche Bank

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Speaker 1: credit default swaps that triggered Friday's global market route. The

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Speaker 1: trade launched a sell off that wiped one point six

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Speaker 1: billion euros off Deutsche Bank's market cap and more than

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Speaker 1: thirty billion euros off European banking stocks. Overall, it's unclear

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Speaker 1: who placed the relevant bet. There's no evidence so far

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Speaker 1: of anything nefarious about that trade. And just lastly, French

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Speaker 1: banks including BNP, Parry Beat and Socit General are facing

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Speaker 1: fines totaling more than one billion euros after an investigation

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Speaker 1: into tax fraud and money laundering. It follows raids relating

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Speaker 1: to a dividend strategy where shareholders transferred stock from a

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Speaker 1: short period two investors based abroad. All of that in

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Speaker 1: order to avoid a dividend tax. Now Bloomberg has approached

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Speaker 1: the five banks named full comment, no comment just as yet,

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Speaker 1: but a very interesting story around that issue of dividend

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Speaker 1: tax and how to avoid it in terms of those

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Speaker 1: top stories. That's it. But another really great story on

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Speaker 1: the terminal that caught my eye away from all of

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Speaker 1: the banking news, which we'll bring you more details of

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Speaker 1: in a moment with Francy Lakua and Nabila Ahmed. Is

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Speaker 1: this one hands up anyone who has lost a yacht.

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Speaker 1: There is a mystery surrounding a yot that is docked

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Speaker 1: in Antigua and Barbuda. It's been there for a year

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Speaker 1: with a five person crew. Bloomberg reports that it's racked

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Speaker 1: up a bill of half a million dollars. But now

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Speaker 1: the authorities in Antigo and Barbudo are saying they're going

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Speaker 1: to sell off the yacht because the person who people

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Speaker 1: thought it was owned by a Russian billionaire, Andrei Guriev, says,

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Speaker 1: according to his lawyers, that he doesn't own the vessel.

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Speaker 1: He only used it from time to time leased it

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Speaker 1: and so now Antigo and Barbudo are going to sell

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Speaker 1: off this yacht. So it's the Alpha Narrow is the

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Speaker 1: name of It's going to be apparently a put up

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Speaker 1: for auction after the thirty first of March. A look

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Speaker 1: at this on the Bloomberg terminal. Sounds like an amazing yacht.

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Speaker 1: It's got an infinity pool as well. But look, seriously,

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Speaker 1: this is the kind of issue with the fallout of sanctions.

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Speaker 1: It would seem potentially, although we don't know the owner

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Speaker 1: of the yacht, but it seems like that maybe the

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Speaker 1: issue that story on the terminal. Okay, back to matters

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Speaker 1: more serious. Sitting down with me now is Bloomberg's editor

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Speaker 1: at large facing lackwork to see you nice and early,

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Speaker 1: Fran said, good morning. So surprise announcement that UBS has

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Speaker 1: named Sergio and Morty as new CEO, replacing Ralph Harmers.

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Speaker 1: So this is the return of someone that we're very

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Speaker 1: familiar with. Of course, it's a very big move two

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Speaker 1: weeks after the deal to buy Credit Spees it is

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Speaker 1: and I think it means that they just mean business.

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Speaker 1: So we had heard that they wanted someone who was

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Speaker 1: very capable. We know that Serger and Mardy is also

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Speaker 1: considered one of the most capable, brightest bankers of his generation.

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Speaker 1: By some he's really considered all sort of shirt because

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Speaker 1: he gets straight to business and does dilly dally. The

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Speaker 1: fact that he was brought in less than two weeks

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Speaker 1: is actually quite incredible. But if you look at the

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Speaker 1: task that UBS has, I would say it's twofold. First

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Speaker 1: of all, what do they keep? How do they manage

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Speaker 1: this mega merger? We know that what we know that

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Speaker 1: their complications possibly with the Investment Bank in terms of

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Speaker 1: of winding some of the things there. We know what

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Speaker 1: they want to do with the Swiss Universal Bank. We

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Speaker 1: don't really know what they do with leverage in markets

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Speaker 1: and things like that. The other question is he needs

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Speaker 1: to preserve Sir Jermadi what Ubs has been right Ubs,

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Speaker 1: if you speak to shareholders, they liked it because look,

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Speaker 1: as a Swiss boring wealth manager, they had some risk,

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Speaker 1: was definitely not as much risk as Kretti Sweeze, and

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Speaker 1: they gave back to shareholders via dividends and share buy bank.

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Speaker 1: So he's also going to have the task to make

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Speaker 1: sure that he, you know, he goes back to those

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Speaker 1: glory days. And remember he not only knows Ubs for

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Speaker 1: nine years, he also tried to beat Kretti sweee for

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Speaker 1: those nine years, every day of his life. So it

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Speaker 1: does give him a massive competitors advantage. Yeah, I mean

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Speaker 1: the long time especially can't have ended up buying credit swee.

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Speaker 1: So this is certainly a huge change. I mean, Ralph

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Speaker 1: Thomas is going to stay on an advisory role. But yeah,

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Speaker 1: the big challenge is for Matty, isn't it. Yeah, it's

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Speaker 1: a Marty that I think will set the strategy with

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Speaker 1: the chairman who also when you speak to people that

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Speaker 1: have worked with him at Morgan Stanley say, look, he

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Speaker 1: takes no prisoners. He's aggressive in his thinking and again

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Speaker 1: he doesn't cut any corners. I think you need at

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Speaker 1: this point really the a team to try and see

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Speaker 1: who they can sell to things quickly and carve out

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Speaker 1: really you know what's good and what's nut. What will

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Speaker 1: you be as keep Again many questions on leverage finance,

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Speaker 1: a couple of things that they maybe want to sell

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Speaker 1: to Apollo. The broader question is really some of the

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Speaker 1: ugly stuff that's in the investment bank. And then we

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Speaker 1: hear not confirmed that there's a couple of things, for example,

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Speaker 1: in the algorithm trading platforms that they would like to

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Speaker 1: keep that could be very surprising, but so again, if

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Speaker 1: you need, if you know someone who knows both companies intimately,

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Speaker 1: then they're going to make the right decisions because they

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Speaker 1: don't they don't have a lot of time to get

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Speaker 1: this done. Caroline, No, absolutely, I think it's going to

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Speaker 1: be so interesting. We have to see what happens with

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Speaker 1: the chef ice this morning in terms of how investors

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Speaker 1: react to it. Thank you so much for coming in studio,

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Speaker 1: Franci lack Waplan Bog's editor at large. They're giving us

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Speaker 1: some well initial thoughts really around this surprise announcement for

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Speaker 1: UBS bringing back surgery and what she obviously an old town,

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Speaker 1: very familiar to Bloomberg and to investors. But the pressure

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Speaker 1: will be on in terms of how ubs, amalgamates and

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Speaker 1: managers credit Swie going forwards. But of course the regulatory

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Speaker 1: backdrop worldwide in terms of banking may alter also quite

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Speaker 1: significantly incoming years. Capital rules boiled down the hearings about

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Speaker 1: the collapse of Silicon Valley Bank in the US and

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Speaker 1: in the UK on Tuesday. More US hearings have come today,

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Speaker 1: of course, and so far the op shot is whether

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Speaker 1: there will be more stringent rules around bank liquidity and

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Speaker 1: capital requirements, but that didn't mean that regulators avoided criticism

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Speaker 1: and a lot of questions about whether they were really

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Speaker 1: paying enough attention when it came to the collapse of

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Speaker 1: SVB and indeed credit swees after that. Joining me now

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Speaker 1: to discuss this as were put in Abila armored Nabila,

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Speaker 1: good morning. Thank you so much for being back with me.

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Speaker 1: Just on the hearings. First of all, what were the

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Speaker 1: key points in your view? We had a little bit

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Speaker 1: from Elizabeth while and there was quite a lot of questions,

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Speaker 1: quite testy exchanges. Yes, it was all very strongly worded.

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Speaker 1: Wasn't a Caroline So we heard words throwing around like hubris, entitlement.

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Speaker 1: Agreed that there was a textbook case of mismanagement. There

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Speaker 1: was a lot of finger pointing. You had the Republicans

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Speaker 1: say that it was not their decision to water down

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Speaker 1: some of the post crisis era rules that led to this.

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Speaker 1: The Democrats obviously disagree. Some of the things that came

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Speaker 1: out of it. Really was there's a big push on

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Speaker 1: to try to understand exactly what went wrong. I'm not

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Speaker 1: sure that we're that much closer to understanding that as

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Speaker 1: of yet, but that is something that the lawmakers are

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Speaker 1: trying to hone in on and then what needs to

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Speaker 1: happen next to prevent this happening again. Yeah, absolutely so

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Speaker 1: in terms of the collapse of SVB, will banks now

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Speaker 1: options on the table, and will they really have political support? Certainly,

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Speaker 1: the regulators that were before Congress yesterday have said that

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Speaker 1: they do anticipate the need to strengthen capital and liquidity standards.

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Speaker 1: For example, banks are facing some tougher regulations. Again, some

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Speaker 1: watered down under the Trump era, so there's calls to

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Speaker 1: reinstate some of that. We can understand. We understand that,

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Speaker 1: you know, we can expect the stress testing of banks,

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Speaker 1: for example, will be strengthened because at the moment they

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Speaker 1: weren't really stress testing for what happens in an interest

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Speaker 1: rate rising scenario, and this is what brought down SVB.

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Speaker 1: They're also proposing liquidity rules to be explored to improve resiliency.

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Speaker 1: They're talking about a long term debt requirement for big

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Speaker 1: banks that aren't designated as global systemically important, so that

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Speaker 1: they have a cushion of loss absorbing resources. We're talking

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Speaker 1: about more regulation for bags that have more than one

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Speaker 1: hundred billion dollars worth of assets, and SVB, you'll remember,

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Speaker 1: had about two hundred and nine billion dollars worth of

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Speaker 1: assets as of last year. Okay, And this, I suppose

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Speaker 1: is where it's important to sort of separate and separate

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Speaker 1: out the US versus the UK. So Andrew Bailey saying

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Speaker 1: that svb's collapse was the fastest passage from health to

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Speaker 1: death since Bearings, which was back in nineteen ninety five,

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Speaker 1: and that was also in a matter of days. But

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Speaker 1: then John Glenn and Bailey saying that the UK is

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Speaker 1: a very different environment but underlying tougher the rules are

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Speaker 1: here in the UK exactly, and they're saying that the

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Speaker 1: UK banking six to sector is very very strong. But

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Speaker 1: they do say that the markets are really testing out

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Speaker 1: what's you know, testing out lenders and seeing looking for weaknesses.

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Speaker 1: But even having said that, they think that we're nowhere

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Speaker 1: near where we were before the two thousand and eight crisis,

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Speaker 1: for example. And they're talking about the issues around SVB

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Speaker 1: being very idiosyncratic, and you know, finance find global finance

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Speaker 1: is very very interconnected right now, but tougher regulations obviously

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Speaker 1: do help. And the UK is a much smaller system

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Speaker 1: and the banking system there is much much smaller than

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Speaker 1: the US two which probably also helps. Okay, there are

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Speaker 1: two other issues though that I'd love to get your

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Speaker 1: comment on though, the concern around the speed of withdrawals

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Speaker 1: from SVB, and we got some numbers on just how

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Speaker 1: spet it ports which are eyewatering, but then also throw

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Speaker 1: into that climate goals. There's a bit of criticism around

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Speaker 1: that perhaps the regulators were not fully focused on the banks,

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Speaker 1: that's the accusation anyway, because they're thinking about kind of

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Speaker 1: climate change green issues. That's exactly right. Look, that's not

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Speaker 1: a new accusation towards the regulators. And you know, we're

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Speaker 1: looking at a situation where inflation has rocketed in more

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Speaker 1: than five times the Bank of England's target of two percent.

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Speaker 1: So there are questions about why this has happened. But

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Speaker 1: the Bank of England has already said that they planned

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Speaker 1: to cut spending on climate change work. A lot of

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Speaker 1: that was driven by Mark Karney, remember when he was

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Speaker 1: about stress testing commercial lenders to ensure that they were

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Speaker 1: taking the long term impact of rising global temperatures into account,

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Speaker 1: for example, and he really kindly did put climate related

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Speaker 1: risks to the economy at the heart of Bowe's financial

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Speaker 1: stability mandate. And the questions that are being asked now

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Speaker 1: is that was too much work done on that and

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Speaker 1: inflation and budget tree pressures etc. And whether that some

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Speaker 1: of that money would be diverted. But as I say,

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Speaker 1: Bank of England already earlier this month Bloomberg reported that

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Speaker 1: were redirecting some of that money to call functions because

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Speaker 1: of the rising pressures on its costs and its budget

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Speaker 1: as well. But why you can't do both, I'm not sure. Yes,

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Speaker 1: good questions, Okay, I think that's the good points on

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Speaker 1: which Nabila thank you so much for being with us,

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Speaker 1: our finance reporter, Nobila Armed then just kind of digesting

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Speaker 1: and thinking about those US hearings UK testimony into the

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Speaker 1: collapse of Silicon Valley Bank. There are of course more

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Speaker 1: US hearings to come today now up next a UK

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Speaker 1: green tax, putting the brakes on a combustion engine ban

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Speaker 1: and the jobs most at risk from chat GPT now

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Speaker 1: the paper review on blue Bird Day Break Europe. The

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Speaker 1: news you need to know from today's papers and Journey

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Speaker 1: this morning has been based to leanne Gerin so the

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Speaker 1: time's headline lean the UK to impose a green tax

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Speaker 1: on imports from polluting factories. Yes, indeed, caroline and in

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Speaker 1: the energy industry is actually bracing for the UK's Green

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Speaker 1: Day which is happening tomorrow, and grant shaps have courses.

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Speaker 1: The Energy Secretary is announcing new climate measures and this

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Speaker 1: will all be part of a package of proposals that

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Speaker 1: will be unveiled tomorrow. As I said on Energy Security Day, now,

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Speaker 1: under new government plans, it's all to hit net zero

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Speaker 1: by twenty fifty. Caroline, which we've been hearing about cheap

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Speaker 1: imported products made in polluting factories overseas could face these

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Speaker 1: new green import taxes. And another shift is that middle

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Speaker 1: income families will be given grants to make their homes

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Speaker 1: and more energy efficient. Those grants have been available to

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Speaker 1: lower income families, so there will be the shift and

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Speaker 1: the scheme is basically going to mirror a really similar

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Speaker 1: plan which has been implemented at the moment by the

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Speaker 1: European Union, Okay, And what it's saying is that countries

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Speaker 1: with lacks environmental rules will be prevented from undercutting UK

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Speaker 1: producers who now have to comply with these increasingly stringent

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Speaker 1: environmental regulations that are in place. Only questions on this, Yeah,

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Speaker 1: surely that is inflationary. Surely you can't do that because

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Speaker 1: of WTO rules if you slap kind of imports tariffs

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Speaker 1: onto other countries. And also, I mean I do think

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Speaker 1: there'll be attention if individual households get some money to

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Speaker 1: try to kind of climate proof their homes. But the

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Speaker 1: government's had two goals that it failed miserably, and there's

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Speaker 1: been loads of criticism. For example, just today from the

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Speaker 1: Independent Climate Change Committee, they published their semi annual report.

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Speaker 1: I mean, they're totally damning on the government's failures to

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Speaker 1: prepare for extreme weather. So I've got lots of questions

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Speaker 1: on this story. And Caroline, you're absolutely right. This report

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Speaker 1: says Britain is strikingly unprepared for a changing climate and

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Speaker 1: could face disruptions to energy, food supply, transport communications if

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Speaker 1: it fails to adapt quickly. So I guess what they're

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Speaker 1: saying when it comes to making homes more energy efficient.

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Speaker 1: That will help save on those end bills that we've

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Speaker 1: seen increased so dramatically. And also, remember, Caroline, we were

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Speaker 1: burning through electric weren't we last year when it was

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Speaker 1: forty degrees in this country? Can remember? I think Caroline

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Speaker 1: bought full disclosure. Don't say that that is terrible, that's

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Speaker 1: not part of my environmentally friendly attude. Well, let's look

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Speaker 1: at the Telegraph Net zero ban on petrol cars in

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Speaker 1: chaos after the Brussels climbed up. There's a UK angle

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Speaker 1: to this, there is, indeed, And look, Caroline, we've just

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Speaker 1: been talking about energy and how contentious it is and

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Speaker 1: how difficult it is to bring in these climate measures,

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Speaker 1: haven't we. And this is just maybe another blow for

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Speaker 1: grant shaps ahead of tomorrow. So a looming British ban

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Speaker 1: on the sale of new petrol and diesel cars could

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Speaker 1: actually really be under threat now, Caroline. This comes after

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Speaker 1: Brussels watered down its own restrictions, and this comes amid

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Speaker 1: such a stiff opposition from the German auto industry. We

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Speaker 1: know it's absolutely massive, brings so much to the economy.

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Speaker 1: Experts and politicians here in the UK are now warning

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Speaker 1: that it's untenable following this climb down for US to

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Speaker 1: ban these combustion engines by twenty thirty. They're just saying

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Speaker 1: it's not not possible. If Europe doesn't do it, we

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Speaker 1: can't do it either. I think that's interesting The Wall

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Speaker 1: Street Journal headline, the job's most exposed to chat GPT, Well,

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Speaker 1: I do think one thing you tell me about chat GDP, like,

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Speaker 1: you got some really interesting information only because a friend

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Speaker 1: of mine yesterday plugged in, you know, to chat GPT

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Speaker 1: a question about who I was, and so it sent

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Speaker 1: me a little blurb It was Yeah, I was reasonably pleased.

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Speaker 1: Actually that was. But that's as an aside. Which sectors

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Speaker 1: might be for the chop then with chat? Yeah, Caroline,

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Speaker 1: quite a few sectors actually. So. A new study finds

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Speaker 1: at AI tools could more quickly handle at least half

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Speaker 1: of the task that auditors, interpreters, and writers do now.

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Speaker 1: But accountants are apparently the professionals who are most exposed

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Speaker 1: to the capabilities of artificial intelligence. And this is all

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Speaker 1: according to new research. If found at least half of

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Speaker 1: accountancy task could be completed much faster with technology. And

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Speaker 1: I want to tell you some jobs that aren't affected

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Speaker 1: by the technology sector, short order cooks, and the motorcycle mechanics.

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Speaker 1: This is Bloomberg Daybreak. You up your morning brief on

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Speaker 1: the stories making news from London to Wall Street and beyond.

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Speaker 1: listen live each morning on London Dab Radio, the Bloomberg

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Speaker 1: say Alexa Play Bloomberg eleven thirty. I'm Carolyn Hebka. Join

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