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Speaker 1: This is Bloomberg Daybreak Curepe for this Tuesday, the twenty

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Speaker 1: eighth of March in London. Coming up today. Avoiding that

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Speaker 1: pre crisis high, Bailey suggests the Bank of England won't

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Speaker 1: lift rates to pre two thousand and eight levels. Torn

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Speaker 1: to shreds Israel's neck, and Yahoo announces he is delaying

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Speaker 1: a judicial overhaul to avoid a quote civil war and

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Speaker 1: cracks in a crypto empire. The US regulator accuses by

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Speaker 1: NaNs and its CEO of sham compliance one where puts

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Speaker 1: the London listing on the launch pad, commercial property, shaky foundations.

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Speaker 1: Those other stories we're looking at in today's papers. And

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Speaker 1: I'm Leanne Geron's Plus Worth a special journey. All eight

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Speaker 1: of the UK's three star Michelin restaurants retain their top

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Speaker 1: tier status. That's all straight ahead on Bloomberg Daybreak Europe.

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Speaker 1: The business news you need to start your day in

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Speaker 1: just one fifteen minute podcast on Apples, Spotify, the Bloomberg

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Speaker 1: Business app and everywhere you get your podcasts. Good morning,

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Speaker 1: I'm Caroline Hepke. Here are the stories we're following today.

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Speaker 1: Bank of England Governor Andrew Bailey says that interest rates

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Speaker 1: will probably remain below the highs scene before the financial crisis.

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Speaker 1: In a speech at the London School of Economics, Bailey

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Speaker 1: hinted that the bank is now nearing the end to

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Speaker 1: its quickest series of hikes in three decades. Even as

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Speaker 1: we now respond to rising inflation by raising bank rates,

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Speaker 1: interest rates will not necessarily have to return fully to

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Speaker 1: and remain around the higher levels they once had. Bailey

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Speaker 1: spoke as new data showed that shop price inflation in

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Speaker 1: the UK hit a record high this month. The British

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Speaker 1: Retail Consortium says prices rose by eight point nine percent

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Speaker 1: year on year in March. The trade association also says

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Speaker 1: inflation in the sector is yet to peak. Meanwhile, on

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Speaker 1: the banking crisis, the Bank of England governor warned that

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Speaker 1: the online era is causing light nin quick bank runs.

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Speaker 1: Andrew Bailey says there's a clear lesson for regulators from

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Speaker 1: the collapse of Silicon Valley Bank. In an age of

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Speaker 1: social media, the speed at which runs can take place,

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Speaker 1: and also, of course in an age of digital banking,

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Speaker 1: the speed at which the social media can be translated

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Speaker 1: into US. I mean it is striking, you know that

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Speaker 1: that happened very quickly, and of course you know the

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Speaker 1: word gets around. So this is very different from the

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Speaker 1: Northern Rock style queue outside the branch, so striking, says Bailey. Well,

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Speaker 1: svb's UK unit suffered a rapid withdrawal of deposits earlier

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Speaker 1: this month. Are's concerns grew over the bank's viability that

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Speaker 1: led to HSBC stepping into buy the British unit of

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Speaker 1: the American lender for one pound. Speaking yesterday, Anthony Shaw,

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Speaker 1: HSBC's Australia CEO, said that the acquisition made great sense

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Speaker 1: and had nothing to do with pressure from regulators. Over

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Speaker 1: in the US, a top FED official has described the

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Speaker 1: banking system as sound and resilient. The fed's Vice Chair

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Speaker 1: for Supervision, Michael Barr, made the comments in prepared remarks

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Speaker 1: for a Senate Banking Committee hearing later today. Bar is

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Speaker 1: leading a review of what led to Silicon Valley banks

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Speaker 1: collapse and says that the lenders failure is a quote

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Speaker 1: textbook case of mismanagement. And we'll bring you more on

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Speaker 1: the hearings that begin in the US and the UK

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Speaker 1: today into SVB with our senior Finance editor Stefania Biankee

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Speaker 1: in just a moment. In other news, though Israel's government

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Speaker 1: has now delayed a plan to weaken the judiciary in

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Speaker 1: the face of unprecedented protests. Prime Minister Benjamin net and

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Speaker 1: Yahoo announced the climb down in a televised address in Hebrew.

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Speaker 1: When there's an opportunity to avoid civil war through dialogue,

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Speaker 1: I as Prime Minister, and taking a time out for dialogue,

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Speaker 1: I give a real opportunity for a real dialogue. We

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Speaker 1: insist on the need to bring about the necessary corrections

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Speaker 1: in the legal system, and we are given an opportunity

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Speaker 1: to achieve a broad consensus. This is a very worthy goal.

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Speaker 1: Net Na, who had been planning to give politicians power

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Speaker 1: to choose judges, which opponents say would threaten Israel's democracy.

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Speaker 1: The demonstrations have made history both in their scale and diversity,

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Speaker 1: with CEO's tech entrepreneurs, even members of the military expressing dissent.

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Speaker 1: Binance and it's CEO, Changpeng Zhao are being sued by

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Speaker 1: the Commodity Futures Trading Commission. The US regulator alleges the

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Speaker 1: world's largest crypto exchange routinely broke American derivatives rules. Bloomberg's

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Speaker 1: legal reporter Ava Benny Morrison sets out the case at

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Speaker 1: the heart of this suitr allegations that Finance allowed US

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Speaker 1: customers to trade on the International Exchange when it wasn't

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Speaker 1: registered with the CFTC, and in some cases Leaven encouraged

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Speaker 1: US trading firms to trade through offshore entities to make

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Speaker 1: it look they were actually training from outside of the US.

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Speaker 1: Responding to the allegations, Binance called the CFTC's lawsuit unexpected

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Speaker 1: and disappointing. The CFTC are seeking a permanent injunction against

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Speaker 1: Binance and cz as He's known, which would stop them

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Speaker 1: from ever doing business in the country and here in

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Speaker 1: the UK. Members of the Scottish Parliament will formally elect

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Speaker 1: Scotland's new First Minister later today. Hamsa Yusuf beat Kate

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Speaker 1: Forbes and Ash Reagan by a slim margin in a

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Speaker 1: ballad of Scottish National Party members. Yusuf will become the

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Speaker 1: first Muslim leader of a British nation and says that

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Speaker 1: he will rally everyone around Scottish independence. Over the last

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Speaker 1: five weeks, we may have been competitors or supporters of

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Speaker 1: different candidates. We are no longer team Hamsa or Team

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Speaker 1: Ash or team Kate. We are one team and we

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Speaker 1: will be the team. We will be the generation that

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Speaker 1: delivers independence. First hamsa Yusuf that he succeeds Nicholas Sturgeon

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Speaker 1: as First Minister following her shock decision to step down

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Speaker 1: from the job after eight years in power. Okay, those

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Speaker 1: are a few of our top stories and for you

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Speaker 1: this morning look after contrast two issues, UK shop prices

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Speaker 1: the highest on record. Food prices actually rose by fifteen

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Speaker 1: percent according to the British Retail Consortium and they still

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Speaker 1: haven't Pete calling to Helen Dickinson. So there's a concern

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Speaker 1: around a food prices. But also Michelin starred restaurants. The

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Speaker 1: UK's managed to retain eight of those three star Michelin awards.

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Speaker 1: They were handed out in an event that was live

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Speaker 1: at the Silverston Racetrack, which is unusual obviously given pandemic

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Speaker 1: and Michelin stars have been difficult to hand out in reality.

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Speaker 1: So you've also seen twenty restaurants gain one star status

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Speaker 1: across the UK and Ireland, twenty five now with two stars,

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Speaker 1: but eight that still will have three stars. Wonder how

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Speaker 1: many of you have actually managed to get to a

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Speaker 1: three star Michelin restaurant sketch in London. Absolutely amazing decor

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Speaker 1: and food obviously, but yeah, there's a whole list on

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Speaker 1: the Blueberg terminal if you fancy somewhere delightful to go

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Speaker 1: for dinner. Okay, those are a few of the things

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Speaker 1: that have caught my eye. But obviously we also have

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Speaker 1: to think about the hearings that are taking place in

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Speaker 1: the UK and the United States that begin today two

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Speaker 1: of the largest US bank failures ever, Silicon Valley Bank

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Speaker 1: and Signature Bank. Now the investigations into what went wrong begin.

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Speaker 1: The Governor of the Bank of England, Andrew Bailey, will

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Speaker 1: testify before the Treasury Committee in the UK on svb UK.

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Speaker 1: Then we have the US Senate Banking Committee and the

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Speaker 1: House Financial Services Committee holding hearings in the US on

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Speaker 1: Tuesday and Wednesday. Joining us now to discuss is Bloomberg's

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Speaker 1: senior finance reporter, Stefania Bianche. Thank you so much for

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Speaker 1: being with me, Stefania. Let's start with Andrew Bailey then,

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Speaker 1: and svb UK thought it was quite interesting that he

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Speaker 1: released this letter saying that actually svb UK had been

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Speaker 1: under scrutiny by regulators for eighteen to twenty four months

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Speaker 1: before the collapse, and that those issues were raised with

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Speaker 1: US regulators. It clearly didn't work. That's right, as you say,

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Speaker 1: it's going to be an interesting week. I'm sure to

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Speaker 1: learn a lot more about what went wrong that these

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Speaker 1: two banks. First of all, we have Andrew Bailey raising

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Speaker 1: these concerns. He said in a letter last week that

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Speaker 1: really these concerns came about up to two years ago,

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Speaker 1: and these concerns included concentration risk, the overlap of clients

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Speaker 1: on the asset and liability side of the balance sheet,

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Speaker 1: and all of these areas had already been under under

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Speaker 1: supervision before things as we know now really went wrong

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Speaker 1: for SVB and for the UK unit of SVB. Okay,

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Speaker 1: So that's what's happening with the UK, But obviously the

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Speaker 1: big focus will be also on the US hearings. So

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Speaker 1: you've got three people, the Federal Reserve Vice chair Michael

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Speaker 1: bar vice chair for supervision. You also have got the

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Speaker 1: FDIC chairman Martin Grimberg, and then the Treasury Under Secretary

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Speaker 1: Nellie Liang will be testifying. They're going to get a grilling,

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Speaker 1: aren't they. They are, And we've already got some sense

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Speaker 1: of what might what might be going on in those hearings.

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Speaker 1: So we know now that Michael Barr's we've seen his

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Speaker 1: prepared remarks that he's going to give in the committee

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Speaker 1: in the committee hearing on Tuesday, and he says that

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Speaker 1: they really need to start monitoring things closely in the

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Speaker 1: banking system. And he said as well that they're prepared

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Speaker 1: to use all of the tools for any size institution

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Speaker 1: just to secure I guess the US banking system, but

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Speaker 1: also the banking system at large. So, as you say,

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Speaker 1: I'm sure there are going to be some tough, tough

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Speaker 1: questions in each of these hearings. Yeah, absolutely. I mean

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Speaker 1: does it hint at new regulation then perhaps, I mean

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Speaker 1: it could, It could, It could lead to that. It

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Speaker 1: seems clearly something needs to be done, having so much

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Speaker 1: has happened within short a short space of time, So

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Speaker 1: it could be, as you say, new regulations, new measures

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Speaker 1: for banks to really shore up capital and to make

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Speaker 1: sure that this doesn't happen again and doesn't spread to

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Speaker 1: the wider the wider banking system. Yeah, I think there

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Speaker 1: are concerns about the spillover effect. They seem to have

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Speaker 1: calmed at least today, but there are, um, you know,

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Speaker 1: other concerns Charles Schwab, for example, unrealized losses on a

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Speaker 1: balance sheet that you know has grown a great deal.

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Speaker 1: I mean, there are there are other concerns around other

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Speaker 1: banking institutions, are there there is? I mean, as you've

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Speaker 1: seen you saw in Europe towards the end of last

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Speaker 1: week and yesterday we've we've it seems credit Swiss things

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Speaker 1: have been calmed there for now with the takeover from UBS.

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Speaker 1: But then in recent days we've seen Deutsche Bank there

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Speaker 1: of being a lot of movement in the bonds and

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Speaker 1: the shirts and Deutsche banks. So really, I don't think

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Speaker 1: we can say that we're out of the woods yet.

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Speaker 1: And just lastly, Stefania, how closely do you think that

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Speaker 1: the US hearings are going to be heeded in the

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Speaker 1: short term by markets. I think they're going to be

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Speaker 1: very closely watched. It's difficult to say at this point

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Speaker 1: how much how much action will be taken, but I

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Speaker 1: think I think people are going to be very interested

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Speaker 1: to learn what was known about these banks and perhaps

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Speaker 1: what could have been done to really prevent the most

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Speaker 1: recent crisis in those in those lenders. Yeah, absolutely, Stefania,

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Speaker 1: thank you so much for being with us. Indeed, the

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

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Speaker 1: remarks saying we plan to propose a long term debt

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Speaker 1: requirement for large banks that are not systemically important. He

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Speaker 1: also talks about enhancing the stress testing with multiple scenarios,

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Speaker 1: so making the stress test more tricky, and also exploring

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Speaker 1: changes to liquidity rules. So those were the comments in

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Speaker 1: the prepared remarks from the FED Vice Chair for Supervision

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Speaker 1: at Michael Barr. That was Bloomberg's senior Finance editor Stefania Bianche.

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Speaker 1: So yes, it's hard to understand what's going to flow

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Speaker 1: out of the hearings of the UK and the US,

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Speaker 1: but they surely will be watched very closely in markets

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Speaker 1: coming up. In the next part of Bloomberg Daybreak Europe,

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Speaker 1: one Web puts a London listing on the launch pad,

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Speaker 1: commercial properties, shaky foundations and Americans reevaluate their values. Now

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Speaker 1: the paper review on Bluebird Daybreak Europe the news you

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Speaker 1: need to know from today's papers and joining me this

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Speaker 1: morning is Blomberg's leanne Gerin's The Times has this headline.

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Speaker 1: One Web utael sat on the launch pad for a

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Speaker 1: secondary London listing. This would be a huge story London's

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Speaker 1: beaten down IPO market. Is it really going to happen? Well, Caroline,

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Speaker 1: I feel like you have a really good insight into this,

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Speaker 1: and we're going to get into that a little bit

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Speaker 1: later on in this story. But Caroline, if it does happen,

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Speaker 1: it will be such good news, wouldn't it. As we

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Speaker 1: know that London is facing the risk of losing its

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Speaker 1: appeal for stock market listings. So according to the Times,

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Speaker 1: a combined company of London's one Web and French satellite

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Speaker 1: firm u tell Sad is set to list on the

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Speaker 1: London Stock Exchange this year. The newspaper is reporting, of course,

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Speaker 1: the move could help recover britain status as a real

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Speaker 1: hot spot for these tech listings. Now, the Indian billionaire

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Speaker 1: Telecom's tycoon and chief executive chairman apologies on one Web,

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Speaker 1: has told the newspaper a secondary listing was a commitment

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Speaker 1: negotiated by ministers. So Caroline, that would say, it's got

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Speaker 1: some legs in the game or skin in the game.

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Speaker 1: I know you like to say, but one thing I

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Speaker 1: wanted to talk to you about was earlier this month. Remember,

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Speaker 1: the UK chip designer arm announced its decision to only

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Speaker 1: list in New York, which was really controversial. Yeah, absolutely,

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Speaker 1: I mean this and also we should clarify this is

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Speaker 1: a secondary listing, right because util stat is listed in Paris,

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Speaker 1: so this would be an additional listing. And yet it

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Speaker 1: would be very significant if that happened. I think you're

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Speaker 1: right to point that out. The other story, though, that's intriguing.

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Speaker 1: It sort of flows from all of the conversations that

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Speaker 1: we've had around weakness in the banking sector. The Guardians

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Speaker 1: headline could office blocks be the next big casualty of

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Speaker 1: the banking crisis? Frankly, I think if it's in the

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Speaker 1: Guardian newspaper, yeah, we're definitely concerned, aren't we. Well, Caroline,

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Speaker 1: I think concerns are really growing, and a lot of

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Speaker 1: this comes from, of course, hybrid working and the pandemic

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Speaker 1: and a lot of people not having to travel into

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Speaker 1: officers and really businesses readjusting the way that people work

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Speaker 1: and how often they have to commute. There's been not

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Speaker 1: so different factors, but the Guardian says investors fea a

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Speaker 1: perfect stormers actually bringing in the property sector. So there's

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Speaker 1: things like higher borrowing costs, weaker levels of economic growth

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Speaker 1: and actually fewer people working in offices after the pandemic,

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Speaker 1: and according to the article in the Guardian, it says

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Speaker 1: after the collapse of Silicon Valley Bank and the UBS

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Speaker 1: rescue of credit suites, some city investors are worried the

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Speaker 1: next phase of the crisis could really pile all this

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Speaker 1: pressure on the commercial property market if banks reign and

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Speaker 1: they lending to this part of the industry. So there

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Speaker 1: we are concerns really swelling. And I don't know if

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Speaker 1: you've heard the phrase hotelfication. No, this is a new

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Speaker 1: one on me, hotelification, but I get it right. Yes,

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Speaker 1: it's where the lobby is immensely fancy and maybe there's

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Speaker 1: a port or something, And I don't know if you've

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Speaker 1: seen that, but I think and the journalist really points

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Speaker 1: us out so well in the Guardian this is complete

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Speaker 1: commonplace among executives trying to law us back into the offices.

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Speaker 1: So now there's fancy sofas school commute, yes, of course,

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Speaker 1: and also that point. So this is a real concern.

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Speaker 1: But it seems like business says haven't given up on

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Speaker 1: getting people back into the city. This is Bloomberg Daybreak Europe,

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Speaker 1: your morning brief on the stories making news from London

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Speaker 1: to Wall Street and beyond. Look for us on your

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Speaker 1: podcast feed every morning, on Apple, Spotify, and anywhere else

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Speaker 1: you get your podcasts. You can also listen live each

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Speaker 1: morning on London Dab Radio, the Bloomberg Business app, and

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Speaker 1: Bloomberg dot Com. Our flagship New York station, is also

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Speaker 1: available on your Amazon Alexa device. Just say Alexa play

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Speaker 1: Bloomberg eleven thirty. I'm Caroline Hep. You join us again

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Speaker 1: tomorrow morning for all the news you need to start

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Speaker 1: your day right here on Bloomberg day Break Your up

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Speaker 1: h