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Speaker 1: This has benom big day baquet for this Thursday, the

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Speaker 1: thirtieth of March in London. Coming up today, The Price

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Speaker 1: of being too Big to Fail. The US considers forcing

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Speaker 1: large lenders to pay billions of dollars to cover the

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Speaker 1: cost of recent bank failures. Go with the Flow. Barclays

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Speaker 1: predicts a second wave of deposits will be pulled from

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Speaker 1: banks and underwhelming. The UK unveils new energy plans but

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Speaker 1: offers few carrots to compete with the US. Britain gets

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Speaker 1: set to sign a new trade deal, off Gem threats

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Speaker 1: and wealthy savers delay retirement. Those other stories we're looking

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Speaker 1: at in today's papers, and I'm Leanne Gerns plus playing

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Speaker 1: catch up. The city stumbles in its own finance center rankings.

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Speaker 1: That's all straight ahead on Bloomberg Daybreak Europe. The business

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Speaker 1: news you need to start your day in just one

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Speaker 1: fifteen minute podcast on Apple, Spotify, The Bloomberg Business, Apple

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Speaker 1: and everywhere you get your podcasts. Good morning, I'm Caroline Hepke.

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Speaker 1: Here are the stories we're following today. Bloomberg understands the

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Speaker 1: regulator that ensures US deposits may ask big lenders to

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Speaker 1: pay extra to cover the cost of recent bank fads.

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Speaker 1: The FDIC expects to pay close to twenty three billion

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Speaker 1: dollars to cover deposits lost when Siticon Valley Bank and

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Speaker 1: Signature failed. Bloomberg's Banking Regulation reporter Katanga Johnson has the

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Speaker 1: details of the scoop. So what we understand is that

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Speaker 1: the FDIC is really considering boosting the reserves in the

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Speaker 1: Deposit Insurance Fund by charging larger banks a new read assessment.

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Speaker 1: We understand from Martin Broomberg's the FDC cheer during his

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Speaker 1: conversations with lawmakers today that truly he wants to protect

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Speaker 1: community bankers and regional bankers from having to pay a

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Speaker 1: larger share. Katana Johnson says the FDRC has the power

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Speaker 1: to speed up the process of refilling its coffers after

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Speaker 1: a big payout, and it can tailor how it sets

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Speaker 1: those rates well. Barkley says that another wave of deposit

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Speaker 1: outflows is on the cards as customers wake up to

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Speaker 1: higher interest rates available in money market funds. The bank

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Speaker 1: strategist Joseph Abate says that depositors may also feel that

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Speaker 1: money markets offer a high perceived level of safety than banks. However,

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Speaker 1: European Central Bank Executive board member Isabel Schnabel says the

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Speaker 1: move seems more of a US problem. We have seen

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Speaker 1: some shifts from overnight deposits into time deposits, but we

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Speaker 1: have not seen a general deposit outflows of the bank.

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Speaker 1: So what we've seen here that there was a shift

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Speaker 1: into money market funds, so that we have not seen

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Speaker 1: and so for now the banking sector looks rather resilient.

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Speaker 1: Schnabel was speaking at an event in Washington. Although she

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Speaker 1: thinks that the outflows would be disinflationary, she's unsure how

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Speaker 1: large any move would actually be, and the Federal Reserve

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Speaker 1: Chair Jerome Powell has told Republicans to study the dot

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Speaker 1: plot if they want to know how much further interest

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Speaker 1: rates would rise this year. In a private meeting with lawmakers,

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Speaker 1: the Fed chief pointed to the policy guide when asked

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Speaker 1: about the rate path. The dot plot currently predicts one

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Speaker 1: more twenty five basis point hike this year. It has

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Speaker 1: emerged that Swiss regulators actively encouraged UBS to bring back

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Speaker 1: Sir Joe O. Motty, who is Swiss as CEO, following

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Speaker 1: the takeover of Credit Swiss. Speaking after the surprise announcement yesterday,

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Speaker 1: a Motty sought to reassure the public that the combined

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Speaker 1: bank will be a success. Scale in size is not

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Speaker 1: a problem if he's focused and well managed. I always

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Speaker 1: say that for me, the debate in nowadays is not

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Speaker 1: too big to fail, is rather too small to survive,

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Speaker 1: and we want to be a winner. A Marshy van

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Speaker 1: ubs from A twenty eleven to twenty twenty and takes

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Speaker 1: over from the curren CEO Ralph Harmer's on the fifth

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Speaker 1: of April. Here in the UK, the government is expected

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Speaker 1: to announce its response to the US Inflation Reduction Act

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Speaker 1: later today, but a draft document seen by Bloomberg News

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Speaker 1: suggests little in the way of new spending. Yesterday, the Chancellor,

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Speaker 1: Jeremy Hunter responded to criticism that Britain doesn't seem to

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Speaker 1: have a counter offer to America's bumper green subsidies. It's

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Speaker 1: a good thing that the United States is taking climate

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Speaker 1: seriously and there's a lot of cats up in what

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Speaker 1: they are proposing to do because we are, even after

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Speaker 1: the Inflation Reduction Act, we are spending a higher proportion

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Speaker 1: of our GDP on the clean energy transition than the

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Speaker 1: United States. Isnt New plans include a home energy efficiency program,

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Speaker 1: and also steps to speed up planning applications for renewable power. Well,

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Speaker 1: there are plenty of warriors in the City of London

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Speaker 1: that other financial centers are catching up. Now its own

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Speaker 1: league table appears to confirm those fears, as Bloomberg's un

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Speaker 1: Potts reports now New York now shares the top spot

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Speaker 1: with London as the world's leading financial hub. But according

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Speaker 1: to the City of London Corporation's own research, other centers,

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Speaker 1: including Frankfurt and Paris, have boosted their attractiveness at a

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Speaker 1: faster pace. The survey benchmarks the competitiveness of financial centers

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Speaker 1: across ninety five metrics. London scores sixty, with Frankfurt on

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Speaker 1: forty six the biggest gainer last year, and Paris on

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Speaker 1: forty three. The city is calling for the government to

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Speaker 1: investigate how to convince high growth industries to start stay

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Speaker 1: and scale in the UK. Still in London, I'm you

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Speaker 1: and Pots Bloomberg Day Break Europe. Okay, So in Pots

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Speaker 1: they're reporting on the city's own metrics from right here

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Speaker 1: in the capital. So today Green Day as build by

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Speaker 1: government officials, but it does already look like it may disappoint.

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Speaker 1: Perhaps both the renewable power industry and the fossil fuel

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Speaker 1: industry at the same time. Look, the measures are meant

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Speaker 1: to counteract or help the UK keep up with massive

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Speaker 1: investment not just from the US but also from the EU.

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Speaker 1: But a lot of the critics say and are wondering

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Speaker 1: whether they'll be funding for home insulation which is a

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Speaker 1: huge issue, whether they'll be onshore renewable power as perhaps

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Speaker 1: easier through planning rules, that doesn't look likely. And also

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Speaker 1: we do have carbon capture and storage the government pinning

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Speaker 1: a lot of hopes on that it would seem from

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Speaker 1: this plan, and that kind of has been criticized by

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Speaker 1: some is not something that you can build up to scale.

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Speaker 1: So lots of question marks about Green Day. But then

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Speaker 1: there's also a very interesting piece by my colleague Phil

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Speaker 1: Audric on the terminal. Have we learned the lessons from

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Speaker 1: the pandemic? No way not. When it comes to fraud.

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Speaker 1: The National Audit Office says that fraud against UK taxpayers

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Speaker 1: most quadrupled during the two years of the pandemic twenty

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Speaker 1: one billion pounds, and that we're most unlikely to actually

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Speaker 1: be able to recover that. That's according to the watchdog,

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Speaker 1: Despite the efforts of HMRC, which looked to be limited.

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Speaker 1: A couple of the figures that struck me. The COVID

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Speaker 1: support scheme accounted for seven point three billion pounds of fraud,

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Speaker 1: and benefit fraud was the biggest seven point nine billion

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Speaker 1: pounds over those twenty four months of the pandemic. Have

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Speaker 1: a read of that story on the Blue Beg terminal.

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Speaker 1: Let's send our attention now to the US. The span

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Speaker 1: of eleven days in the US saw the collapse of

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Speaker 1: three regional banks and then also one giant global one.

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Speaker 1: Of course, here a credit sweetes. Now the fdi C,

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Speaker 1: the agency that stepped in, wants to spread the twenty

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Speaker 1: three billion dollars in costs from the demise of these businesses.

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Speaker 1: Blue Begs Markets for report of valery title joins me. Now,

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Speaker 1: so the idacy at the big banks to pay then, well,

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Speaker 1: that seems like to be the politically palpable option right now.

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Speaker 1: From what we've heard from the week of testimonies about

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Speaker 1: svb's collapse, you know that the politicians in Washington are

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Speaker 1: really seeing that the big banks in the US have

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Speaker 1: benefited benefited from these deposit inflows. As people pull deposits

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Speaker 1: from the smaller banks and put them into the more

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Speaker 1: implicitly backed government too big to fail banks, as we

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Speaker 1: should say, So the idea would be too in some

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Speaker 1: way put more of the burden onto the large banks

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Speaker 1: in order to pay or I guess I should say,

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Speaker 1: rebuff the FDIC's fund. Yeah, absolutely, rebuild it. You know,

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Speaker 1: the deposit insurance funds absolutely essential to the sort of

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Speaker 1: working the backstop. What precedent is there for this and

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Speaker 1: how would it actually work? Well? The FDIC really has

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Speaker 1: full discretion on how they raise this fund. And the

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Speaker 1: thing that's funny though, is that how they currently raise

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Speaker 1: the fund is there is four or five five different

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Speaker 1: risk categories they put a put banks into, and they

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Speaker 1: charge the riskier banks more in an insurance premium to

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Speaker 1: add to the fund. So this would in some way

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Speaker 1: be flipping it on its head. They would be charging

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Speaker 1: the safer, larger institutions more money than the smaller, riskier

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Speaker 1: institutions in their eyes. But they have full discretion to

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Speaker 1: do that, and they did that very similarly in two

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Speaker 1: thousand and nine when they needed to raise five and

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Speaker 1: a half billion, A lot of the burden went on

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Speaker 1: to the big banks. JP Morgan ended up paying a

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Speaker 1: decent fee, I should say, to rebuild the fund then, okay,

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Speaker 1: a good proportion. What about the issue then in Washington,

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Speaker 1: as you say, it's been hot topic. What's the kind

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Speaker 1: of politics abound this? Look? They have been very clear

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Speaker 1: about their concerns that the US is now entering into

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Speaker 1: a two tier banking system. You have the four massive

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Speaker 1: institutions and then you have all the smaller regional banks.

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Speaker 1: And the issue that Yelling and other lawmakers made clear

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Speaker 1: is that the smaller community banks are less likely to

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Speaker 1: get the same treatment that SVB did. There are less

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Speaker 1: likely to get a bail out of uninsured depositors because

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Speaker 1: they aren't systemically important, and lawmakers are not happy about that. So,

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Speaker 1: you know what, the what we've heard from the FDIC

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Speaker 1: does seem to tilt in the direction of charging the

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Speaker 1: larger banks more as they have benefited from this banking crisis. Okay, Fali,

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Speaker 1: thank you so much for coming in and explaining the

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Speaker 1: details of that story. Then how to fund the banks

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Speaker 1: after the demise of a number of regional banks in

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Speaker 1: the US. That is our Boomberg's Markets report at Valerie

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Speaker 1: titel Up. Next, Britain gets ready to sign a new

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Speaker 1: trade deal off GEM threats and wealthy savers delay retirements.

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Speaker 1: Now the paper review on Bluebird day Break Europe, the

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

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Speaker 1: me this morning's Boomberg's Leanne guns are with a look

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Speaker 1: at the newspaper stories. Then let's start with this Telegraph

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Speaker 1: headline Britain is poised to sign Indo Pacific trade deal

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Speaker 1: in Brexit victory. That's how the Telegraph describes it. Lean Yes, indeed, Caroline,

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Speaker 1: good morning tas so post Brexit Britain, Caroline, what is

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Speaker 1: it going to look like? Okay, let me tell you.

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Speaker 1: So it's on the brink of joining an India Indo

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Speaker 1: Pacific trade pack and that's with eleven other countries. And

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Speaker 1: the newspaper basically says this will unlock access to a

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Speaker 1: ten trillion dollar market. So let's break it down tomorrow.

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Speaker 1: The UK is actually expected to become the first non

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Speaker 1: founding member of the CPPP, very catchy name. That the

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Speaker 1: deal will highlight determination and I think this is to

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Speaker 1: play a role on the global stage, especially when it

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Speaker 1: comes to the Indo Pacific Because Caroline, do you remember

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Speaker 1: the Orchest defense pack with the US and Australia is

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Speaker 1: also in the making and to be signed. So this

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Speaker 1: is something that I think that are looking at in

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Speaker 1: a world of post Brexit. But you made up a

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Speaker 1: really good point earlier to me. Basically, these countries in

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Speaker 1: these eleven member pack are so far away and it's

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Speaker 1: little Australia, Canada, Japan, Malaysia perusing a puviet now. I

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Speaker 1: mean the issue is that you tend to trade more

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Speaker 1: with people who are closer to in these countries are

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Speaker 1: all far away, but they do make up like thirteen

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Speaker 1: percent of the global economy. Yes they are important, Yeah,

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Speaker 1: thirteen percent of global domestic product and fifteen percent of

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Speaker 1: global trade. So it is important and the UK is

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Speaker 1: hoping that this will really spur they trade on a

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Speaker 1: platform globally. And Jared Lyons, a former adviser to Boris

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Speaker 1: Johnson who is now an economist at net Wealth Investment Services,

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Speaker 1: He's been speaking to the paper and he says this

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Speaker 1: is something that would not have been possible if we

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Speaker 1: were still in the EU. And America was actually previously

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Speaker 1: a member of the Transpacific Partnership. And I don't know

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Speaker 1: if you remember this, but I remember working with you

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Speaker 1: on the very day when Donald Trump withdrew from that

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Speaker 1: partnership in twenty seventeen. But Britain already has bilateral ties

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Speaker 1: with more than half of the eleven members. We've just

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Speaker 1: outlined their caroline and that's all according to Bloomberg reporting.

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Speaker 1: But a lot of this is seen as something that

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Speaker 1: the UK is trying to build as we do see

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Speaker 1: a post brexit error. Yeah, I mean there's also real

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Speaker 1: concerns about what it means for food standards, for pesticides, etc.

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Speaker 1: But yeah, very very interesting to remember the TPP moment

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Speaker 1: with Donald Trump. Okay, let's talk about off JEM. The

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Speaker 1: Times has this headline off Gem threatens the Times over

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Speaker 1: prepaid meters expose. We talked about that Times reporting, didn't

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Speaker 1: we about, you know, when energy bills were going wild? Yeah,

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Speaker 1: we absolutely spoke about it, and it all seemed a

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Speaker 1: little bit unreal at the time. So now we've had

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Speaker 1: a little bit of time to break it down and

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Speaker 1: I'm going to explain to you what's really going on.

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Speaker 1: And we do know that The Times did that big

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Speaker 1: expose on what exactly was going on. But now the

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Speaker 1: energy regulator off JEM is actually threatening the Times newspaper

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Speaker 1: and one of its journalists with criminal sanctions over what

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Speaker 1: they did expose when energy bills were just rocketing. The

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Speaker 1: regulators apparently sent the legal threats after the newspaper disclosed

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Speaker 1: at their agents working for British Gas were being sent

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Speaker 1: to break into homes and remember Caroline, they were forced

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Speaker 1: fitting these pre payment meters, which charge a lot more

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Speaker 1: for electricity, even when customers were known to have extreme

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Speaker 1: vulnerabilities and just couldn't pay their bills. And letters have

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Speaker 1: been sent to Paul Morgan Bentley, he's head of investigations

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Speaker 1: at the newspaper, and the newspaper itself saying they will

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Speaker 1: face fines if they o handover all of the reporters

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Speaker 1: relevant materials and the undercover footage that they did take.

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Speaker 1: But the Times it's just refusing to comply because obviously

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Speaker 1: they saying we have to protect journalistic material in a

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Speaker 1: democratic society. I listen, it seems like an odd fight

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Speaker 1: to wage with the newspaper, but yeah, I think it's

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Speaker 1: also important to highlight at the time that this was happening,

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Speaker 1: it wasn't illegal. What right the companies were No, no,

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Speaker 1: no companies, It wasn't illegal. They could get a warrant.

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Speaker 1: But I think things have now definitely solidified in light

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Speaker 1: of this, and different laws have been put into place,

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Speaker 1: and that could be the argument. But I mean, reporters

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Speaker 1: relevant materials is not something that's going to be handed over,

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Speaker 1: you know, without a massive fight. Yes, yeah, no, I

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Speaker 1: think it's interesting. I think also the reporting around it

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Speaker 1: was was very Yeah, it made a lot of waves,

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Speaker 1: didn't it, in the way that it was reported by

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Speaker 1: the Times. But anyway, the FT Wealth the UK savers

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Speaker 1: delay reed tarment in wake of the pension's shake up.

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Speaker 1: Is this actual evidence that the budget worked the world? Carolina?

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Speaker 1: Maybe it is evidence of keeping people in work. So

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Speaker 1: people with large pension pots are delaying retirement until the

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Speaker 1: new financial year and this is really to avoid the

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Speaker 1: hefty tax chargers. And this is according to advisors speaking

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Speaker 1: to the FT on the subject. And as you remember,

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Speaker 1: Caroline was here reporting on the budget late into the

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Speaker 1: day and measures were announced to remove tax charges of

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Speaker 1: up to fifty five percent on savers accessing pension pots

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Speaker 1: over a million pounds of the lifetime limit. And you know,

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Speaker 1: this was an unexpected scrapping. We had the budget leaked

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Speaker 1: for weeks, didn't we And it seems to have spurred

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Speaker 1: people into action. This is Bloomberg Daybreak. You up your

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

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