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Speaker 1: Good morning. It's Thursday, the fourteenth of September here in London.

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Speaker 1: This is the Bloomberg Day Vacuate podcast. I'm Caroline Hepkin.

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Speaker 2: And I'm Stephen Carroll.

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Speaker 3: Coming up today, Goldban Sacks fires several transaction banking execs

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Speaker 3: for compliance lapses.

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Speaker 1: The former Prime Minister Theresa May tells us that Britain

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Speaker 1: should look for ways to compromise with China.

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Speaker 3: And we take a closer look at the one and

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Speaker 3: a half trillion dollar private credit market and why it's

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Speaker 3: offering a ray of hope to gloomy investment bankers.

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Speaker 1: Let's start with a roundup of our top stories.

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Speaker 3: Goldbn Sachs has fired several transaction banking executives over compliance lapses.

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Speaker 3: With more, here's Bloomberg's Crispece.

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Speaker 4: According to a memo seen by Bloomberg, the Wall Street

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Speaker 4: Giants sacked a number of senior figures who'd communicated on

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Speaker 4: unauthorized channels and failed to comply with an internal review.

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Speaker 4: In a statement, Golden Sachs said they wouldn't comment on

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Speaker 4: individual cases, but that they take communications policy serious and

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Speaker 4: expect all personnel to comply with it. The news comes

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Speaker 4: as financial firms face increasing pressure to police employees interactions

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Speaker 4: following a crackdown on the widespread use of WhatsApp and

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Speaker 4: other unauthorized apps. Last year, several banks, including Goldman, were

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Speaker 4: hit with two hundred million dollar fines over a failure

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Speaker 4: to monitor and archive work related messages. In London. I'm

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Speaker 4: Chris Pitt Bloomberg Radio.

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Speaker 5: Now.

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Speaker 1: Citygroup is preparing for a wave of job cuts as

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Speaker 1: the bank's CEO, Jane Fraser, looks to restructure the Wall

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Speaker 1: Street giant. The company will now operate five main businesses

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Speaker 1: and eliminate the three regional chiefs who oversaw operations in

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Speaker 1: about one hundred and sixty countries. Jane Fraser says that

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Speaker 1: the shakeup will have a big impact on the business.

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Speaker 6: The changes are the most consequential changes to how City

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Speaker 6: will be organized and run that we've made in almost

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Speaker 6: twenty years. And what this move enables me to do

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Speaker 6: it not only flatten the organization, but it also enables

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Speaker 6: me to be much more directly involved in making sure

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Speaker 6: that those businesses are performing.

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Speaker 1: Fraser's decision to reorganize the bank will result in a

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Speaker 1: number of job cuts in back office functions. Sources tell

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Speaker 1: us that it doesn't yet have firm targets for how

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Speaker 1: many jobs will be affected.

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Speaker 3: The chip designer ARM has priced its initial public offering

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Speaker 3: at the top end of its range to raise four

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Speaker 3: point eight seven billion dollars in the largest listing of

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Speaker 3: the year. Bimberg's Charlie Palace reports.

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Speaker 5: It could give a major lift to long suffering equity markets.

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Speaker 5: The chip designer, which is owned by SoftBank Groups, sold

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Speaker 5: ninety five point five million American Depository shares for fifty

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Speaker 5: one dollars a piece. ARM had marketed the shares for

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Speaker 5: forty seven to fifty one dollars each. At the IPO price,

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Speaker 5: ARM is valued at about fifty four point five billion

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Speaker 5: dollars according to Blue News calculations. The shares will begin

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Speaker 5: trading on NESDAK under the symbol ARM in New York.

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Speaker 5: Charlie Pellett Bloomberg Radio.

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Speaker 1: The former Prime Minister Teresa May says that Britain needs

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Speaker 1: to find ways to work with China. She teld Bloomberg.

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Speaker 1: The world's second largest economy can't be ignored.

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Speaker 7: You can't ignore china huge economic presence across the world.

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Speaker 7: Although the Deputy Prime Minister identified it is the number

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Speaker 7: one state based threat to our economic security. But it's

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Speaker 7: a huge presence economically for businesses, but also of course

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Speaker 7: in terms of the way it has reached out across

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Speaker 7: the world, sometimes been able to take a position in

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Speaker 7: countries because the West has not been there. We should

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Speaker 7: learn from that.

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Speaker 1: May's words come as the current Prime Minister, if She Sunak,

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Speaker 1: faces a dilemma over how to respond to allegations of

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Speaker 1: Chinese spying in parliament. Hawks in his own party are

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Speaker 1: pushing for the government to designate the superpower a strategic

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Speaker 1: threat and revoke China's invitation to a key AI summit

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Speaker 1: this autumn.

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Speaker 3: Elon Mosk has called for an artificial intelligence regulator after

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Speaker 3: a closed door send its summit of more than twenty

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Speaker 3: technology and other leaders. Speaking to reporters after the meeting,

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Speaker 3: the billionaire warned of the dangers of the technology.

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Speaker 5: You shoulding in the future as a series of probabilities

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Speaker 5: as opposed to certainties.

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Speaker 2: But there is some chance that above zero that AI

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Speaker 2: will kill us. Well, I think it's low, but it

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Speaker 2: there's some chance.

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Speaker 3: Musk himself, as a prominent AI investor, He was joined

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Speaker 3: at the meeting by organized by Senate Majority leader Chuck Schumer,

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Speaker 3: other major tech CEOs included Mark Zuckerberg and Bill Gates.

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Speaker 1: The European Central Bank will decide later whether or not

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Speaker 1: to deliver a tenth straight interest rate increase. Economists surveyed

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Speaker 1: by Bloomberg are split almost fifty to fifty between a

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Speaker 1: hold and a quarter point hike, whilst markets believe that

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Speaker 1: there's a sixty five percent chance that the the ECB

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Speaker 1: will opt to raise rates. So the decisions due at

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Speaker 1: one fifteen pm London time, with the ECB President Christine

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Speaker 1: Legard due to speak to media half an hour later,

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Speaker 1: and we'll bring that to you live here on Bloomberg.

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Speaker 3: The UK housing market is continuing to slow, with prices

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Speaker 3: in August falling at their fastest rates since two thousand

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Speaker 3: and nine. The Royal Institution of Charted Surveyors says inquiries

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Speaker 3: from new buyers are down and fewer homeowners are putting

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Speaker 3: their properties on the market. Cyberin Rubinson from Ricks says

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Speaker 3: rents are also being pushed up by a gap between

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Speaker 3: demand and supply.

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Speaker 8: When we ask our members up and down the country

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Speaker 8: what they think will happen to rents going forward, they

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Speaker 8: say they're going up. So it's really almost the reverse

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Speaker 8: situation of what we're seeing in the sales market.

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Speaker 3: The survey also highlights the growing toll being taken by

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Speaker 3: the steep rise and interest rates delivered by the Bank

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Speaker 3: of England and its bit to tame inflation.

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Speaker 2: Color.

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Speaker 3: I was about to ask if you're looking for a

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Speaker 3: new job, and I realized how Fastive aggressed that if

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Speaker 3: I said it out loud, let me explain, Let me explain.

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Speaker 3: So we had been Perhaps you may have seen the

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Speaker 3: stories around the set about how Gannett Media Group in

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Speaker 3: the US was recruiting a Taylor Swift reporter.

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Speaker 2: Well, this one, which I thought might be more up

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Speaker 2: your streets.

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Speaker 3: They're also looking for a Beyonce reporter now for USA

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Speaker 3: Today and the Tennessee. And so this is of course

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Speaker 3: part of why these artists are such a massive impact,

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Speaker 3: as we've been talking about on this program on the economy,

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Speaker 3: is their tours, as well as big ticket prices, involve

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Speaker 3: huge spends on things like hotels. People are traveling to

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Speaker 3: see these artists perform as well. They're seen now as

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Speaker 3: being important enough to have their own dedicated reporters from

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Speaker 3: this major US media group as well. So they are

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Speaker 3: two separate jobs. You can't do both. You have to

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Speaker 3: pick whether you want to be a Taylor Swift reporter

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Speaker 3: or a Beyonce reporter.

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Speaker 2: And the pay, they're fully remote jobs.

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Speaker 3: You'll get the chance to travel internationally to follow the stars.

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Speaker 2: I'm saying you again, I'm not trying to get rid

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Speaker 2: of you.

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Speaker 3: Maybe, And the pay is up to so between twenty

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Speaker 3: one dollars an hour. Istion about fifty one dollars an hour,

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Speaker 3: so it could add up to as much as one

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Speaker 3: hundred thousand dollars at the highest end of the range

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Speaker 3: based on a forty hour work week.

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Speaker 1: Look, I'm afraid I have been a journalist for long

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Speaker 1: enough that I remember when you know, being perhaps a

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Speaker 1: fashion writer or being somebody who followed celebrities or pop

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Speaker 1: stars was considered on a lighter end of journalism. But

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Speaker 1: when you look at the data and the number how

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Speaker 1: much money people are spending, you know, to follow that

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Speaker 1: the stars that they love the most, to the tune

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Speaker 1: of five point four billion dollars in the US economy. Actually,

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Speaker 1: you know that this is very very serious business, and

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Speaker 1: rightly so.

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Speaker 3: I look, there are two artists that kind of epitomize

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Speaker 3: how much artists need to be a full business model.

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Speaker 3: Now it's not just about making music, it's everything else

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Speaker 3: that goes with it that manages to make them such

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Speaker 3: a huge impact on the economy as well. So anyway,

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Speaker 3: if you're looking for a new job this morning, sorry Caroline.

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Speaker 1: No, I still love my own program. Tempted as I

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Speaker 1: may be to follow Taylor Swift around the world. Good stuff. Yeah,

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Speaker 1: that's it's a really nice piece that we've got on

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Speaker 1: the Bloomberg terminal for you this morning. Also, though, I

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Speaker 1: want to talk about well, another a woman in a

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Speaker 1: prominent woman, Theresa May, the Britain's second female Prime minister,

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Speaker 1: who took over from David Cameron. She's got a new

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Speaker 1: book out all about her time in Number ten. Of course,

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Speaker 1: May's tenure between twenty sixteen and twenty nineteen it was

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Speaker 1: dominated by battles over how to negotiate the UK's exit

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Speaker 1: from the EU, despite the former Home Secretary having campaigned

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Speaker 1: against leaving. Now Teresa May has been speaking to Blomberg's

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Speaker 1: Farci Laqua. May discussed the hard line polarization of US politics,

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Speaker 1: saying that the Capitol Hill riot by a mob of

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Speaker 1: Donald Trump supporters was a quite wake up call, not

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Speaker 1: just to the US, but also to Western democracies that

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Speaker 1: political stability should not be taken for granted.

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Speaker 7: I think politics across the world has been changing in

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Speaker 7: recent years. I say in the book, I think we

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Speaker 7: live in a more absolutist world, a sense of you're

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Speaker 7: either one hundred percent with me or one hundred percent

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Speaker 7: against me. I think there are some in politics who

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Speaker 7: find it difficult to accept the concept of compromise, whereas

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Speaker 7: we know in politics, in business, in everyday life, sometimes

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Speaker 7: you actually have to compromise. And I think there has

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Speaker 7: been in some senses. If you look at politics today,

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Speaker 7: there's less respect than there has been in the past,

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Speaker 7: perhaps a courser debate. I don't think that's good, and

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Speaker 7: I think sometimes that puts young people off.

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Speaker 9: You were very deliberate and precise in your dealings with China.

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Speaker 9: Should Rushie Sunek have flown to China actually first year

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Speaker 9: in office?

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Speaker 7: I think it's the debate about China is often seems

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Speaker 7: to be in what I described earlier as those absolutist terms,

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Speaker 7: that either you ignored China or you're completely sort of

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Speaker 7: in with China. The answer is, of course, that it's

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Speaker 7: right to be neither of those you can't ignore china

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Speaker 7: huge economic presence across the world, although the Deputy Prime

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Speaker 7: Minister identified it is the number one state based threat

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Speaker 7: to our economic security. But it's a huge presence economically

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Speaker 7: for businesses, but also of course in terms of the

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Speaker 7: way it has reached out across the world, sometimes being

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Speaker 7: able to take a position in countries because the West

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Speaker 7: has not been there. So we should learn from that,

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Speaker 7: I think. But we have to balance there are real

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Speaker 7: human rights issues with China. You know, I'm involved in

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Speaker 7: setting up a Global Commission on Modern Slavery. If you

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Speaker 7: look at the recent Global Slavery Index, it identified solar

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Speaker 7: panels being created in China and labor exploitation behind those.

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Speaker 7: So we have to look very carefully, and businesses can

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Speaker 7: make a huge difference in looking at their supply chains.

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Speaker 9: But at the moment you think we're too hard on China,

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Speaker 9: and is there a danger that if you look at

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Speaker 9: the template of what happened with Russia and the Cold War,

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Speaker 9: we're repeating that with China today.

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Speaker 7: Well, I think what was interesting in if you think

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Speaker 7: about Russia and the Cold is in a sense both

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Speaker 7: sides knew where the dividing lines were and were able

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Speaker 7: to there was an existence that was able to go

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Speaker 7: into the future with people understanding those dividing lines. And

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Speaker 7: I think maybe we haven't quite got to that point

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Speaker 7: with China. And it's very interesting if you look at

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Speaker 7: somebody like Kevin Rudd, former Australian Prime Minister, who's very

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Speaker 7: knowledgeable on China, he sets out that as one of

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Speaker 7: the potential ways.

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Speaker 5: Forward President Trump.

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Speaker 9: President Trump had given you a hard time. Would you

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Speaker 9: think a second presidency if he wins the next election

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Speaker 9: means for the world.

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Speaker 7: Well, I'm not going to speculate on the result of

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Speaker 7: an American presidential election, or indeed on the result of

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Speaker 7: parties candidates and who they choose for candidates. I mean,

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Speaker 7: what I would say is that it was I would say,

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Speaker 7: a presidency like no other when we saw President Trump

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Speaker 7: in his position, and it was a more unpredictable, perhaps

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Speaker 7: and uncertain presidency. I think what we see now, and

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Speaker 7: in a sense the war in Ukraine has helped with

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Speaker 7: this is America again with its Western allies standing up

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Speaker 7: for Western values.

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Speaker 9: But do you see abuse of power in the US.

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Speaker 7: What I worry about in the US is the polarization

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Speaker 7: of politics. What I would say, the very hard line

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Speaker 7: polarization of politics, and I, as many around the world

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Speaker 7: in democracies, were deeply concerned about the mob attack on

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Speaker 7: the Capitol and what that meant for democracy, and in

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Speaker 7: a sense was a wake up call because in recent decades,

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Speaker 7: I think those of us in the West have taken

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Speaker 7: the view that liberal democracies were in the ascendancy, that

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Speaker 7: this was an accepted way forward, and we almost didn't

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Speaker 7: need to worry, became complacent. Actually, we have to fight,

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Speaker 7: We have to work hard to protect democracies and to

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Speaker 7: persuade good generations in our own countries of the importance

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Speaker 7: of democracy.

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Speaker 1: So that was Teresa May. Her book is The Abuse

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Speaker 1: of Power. She was speaking to Bloomberg's France scene Laqua Look.

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Speaker 1: I think the points that she makes around the UK's

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Speaker 1: attitude to China is immensely important and also kind of

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Speaker 1: democratic values. I think it's worth saying the response from China,

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Speaker 1: you know, has been quite pointed in terms of the

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Speaker 1: UK's concerns around spying. For example, you know, if you

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Speaker 1: read the China Daily talking about how the UK media

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Speaker 1: too frequently hypes up concerns around intervening in investments that

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Speaker 1: China is making in the UK or in these kind

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Speaker 1: of claims around spying. The attitude in China is much

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Speaker 1: more dubious.

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Speaker 3: Indeed, and that's interesting to hear Teresa May's view on

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Speaker 3: that as well. Let's turn into a different story now

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Speaker 3: and the boom and private credit markets used to be

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Speaker 3: a niche area, but rising interest rate environment has turned

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Speaker 3: it into a one and a half trillion dollar market

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Speaker 3: and everyone wants a slice of it. That has caused

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Speaker 3: a wave of consolidation in the spaces. Big players are

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Speaker 3: trying to get bigger and smaller firms want to remain

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Speaker 3: in the game. Joining us now to discuss is our

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Speaker 3: asset management reporter Lukia Giftopolu Lukia, good morning to you,

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Speaker 3: m and A.

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Speaker 2: And private credit is a hot market right now?

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Speaker 10: Why well, private credit has become very popular in general

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Speaker 10: because of the rising interest rates. The banks are not

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Speaker 10: lending us much anymore and you can charge very high

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Speaker 10: fees for these products. So a lot of people who

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Speaker 10: are not in the space before want to get in

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Speaker 10: and they're trying to get in by acquisition, by buying

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Speaker 10: other smaller players do the job for them.

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Speaker 1: So who is buying.

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Speaker 10: Well, right now m and A is mainly driven by

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Speaker 10: the big traditional asset managers who had nothing to do

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Speaker 10: with this before. And I'll slightly late to the party.

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Speaker 10: So we see a lot of these a lot of

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Speaker 10: these guys just trying to find kind of a superablel

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Speaker 10: private credit business to buy, and they've been driving acquisitions

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Speaker 10: where you speak to consultants, they say, well, you know,

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Speaker 10: M and A is a private trend game right now,

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Speaker 10: mainly because of them. But then you also have the

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Speaker 10: established players like rs Apollo and Autree, and they would

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Speaker 10: also be looking to buy kind of more high quality

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Speaker 10: staff because they're always on the lookout for for good deals.

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Speaker 10: And there's also a sense that the big guys may

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Speaker 10: want to try and get bigger before the banks decide

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Speaker 10: to come back in and start lending again.

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Speaker 3: And on the other side, why do the smaller private

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Speaker 3: kind of firms want to sell, Well, you know.

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Speaker 10: Several reasons, but mainly they're finding a lot harder to

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Speaker 10: raise money so they can't compete as much with the

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Speaker 10: bigger players. The current environment is kind of favoring the

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Speaker 10: more established players. Investors want to go to the to

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Speaker 10: the to the firms that have a longer track record

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Speaker 10: that have the experience with a downturn and more resources

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Speaker 10: to deal with it. If you know, if very section

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Speaker 10: finally caps, so the small the small firms they can

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Speaker 10: raise as much money and as a result, they can

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Speaker 10: make as many deals and they can pay for top

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Speaker 10: talent as well as it.

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Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

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Speaker 3: stories making news from London to Wall Street and beyond.

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Speaker 1: I'm Caroline Hepka and.

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Speaker 2: I'm Stephen Carroll.

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Speaker 3: Join us again tomorrow morning for all the news you

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Speaker 3: need to start your day right here on Bloomberg Daybreak Europe.