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Speaker 1: This is Bloomberg Daybreak you for this Monday, the fifth

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Speaker 1: of June in London.

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Speaker 2: Coming up today, Saudi and demand oil surges as the

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Speaker 2: kingdom goes it alone with a one million barrel supply

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Speaker 2: costs taking it.

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Speaker 3: To the bank.

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Speaker 1: A report suggests that the US could raise capital requirements

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Speaker 1: by twenty percent for large lenders.

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Speaker 2: Still on top of the UK widens its lead as

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Speaker 2: Europe's favorite destination for financial investors.

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Speaker 4: Rivals look to replace the Cpiron Rogue trader Nick Leeson

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Speaker 4: says he'll never stop investing those other stories we're looking

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Speaker 4: at in today's papers. And I'm Leanne Gerren's.

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Speaker 1: Plus I'll quit if you make me come back to

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Speaker 1: the office. Workers tell Bloomberg that ending hybrid working is

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Speaker 1: a deal breaker.

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Speaker 5: That's all straight ahead on Bloomberg Daybreak Europe, The business

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Speaker 5: news you need to start your day in just one

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Speaker 5: fifteen minute podcast on Apple, Spotify, the Bloomberg Business App

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Speaker 5: and everywhere you get your podcast.

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Speaker 2: Yes, good morning, I'm Stephen Carroll.

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Speaker 1: And I'm Caroline Hetger. Here are the stories that we're

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Speaker 1: following today. The price of oil has risen after Saudi

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Speaker 1: Arabia announced that it will can't supply by a million

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Speaker 1: bowls a day from July. The move takes its production

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Speaker 1: to the lowest level for several years, but the Kingdom's

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Speaker 1: Energy Minister, Prince Abdu la Ziz Bin Salman, says that

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Speaker 1: the move is a treat for traders.

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Speaker 6: I would have to call it the Shaoudi lollipop, which

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Speaker 6: is a million barrel of reduction for the first of July,

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Speaker 6: and that million is also extendable.

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Speaker 1: These Saudi Energy Minister's comments come at the end of

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Speaker 1: an OPEC Plus meeting where the rest of the twenty

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Speaker 1: three nation coalition offered no additional action that has left

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Speaker 1: Saudi Arabia sacrificing further market share. To stabilize the markets.

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Speaker 2: US regulators are preparing to force large banks to shore

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Speaker 2: up their financial footing, moves say will help boost the

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Speaker 2: resilience of the system. The Wall Street Journal reports that

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Speaker 2: the changes could raise overall capital requirements by roughly twenty

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Speaker 2: percent at larger lenders. The paper says institutions with large

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Speaker 2: trading businesses will take the biggest hit, while those heavily

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Speaker 2: dependent on fee income could also face significant increases. Banks

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Speaker 2: with at least a one hundred billion dollars in assets

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Speaker 2: may have to adhere to the new requirement, lower than

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Speaker 2: the existing two hundred and fifty billion dollar threshold.

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Speaker 1: Now here in the UK, The country is widening its

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Speaker 1: lead as Europe's top destination for foreign direct investment in

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Speaker 1: financial services. Bloomberg's U and Pots.

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Speaker 7: Reports Britain and his seventy six financial service FDI projects

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Speaker 7: last year up seventeen percent from the previous year, retaining

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Speaker 7: exposition as the most important destination in Europe. According to

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Speaker 7: analysis by EY, the UK secured more than a quarter

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Speaker 7: of all foreign direct investment projects into financial services across Europe.

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Speaker 7: The rise was thanks to an increase in American investment,

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Speaker 7: with twenty one US backed projects in twenty two twenty two. France,

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Speaker 7: the second most important recipient, saw a twenty five percent

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Speaker 7: drop in projects. The positive research comes despite a growing

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Speaker 7: course of executives criticizing the UK's business environment in London

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Speaker 7: Imune Pots of Bloomberg day Break.

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Speaker 5: Europe.

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Speaker 2: UBS says it expects to complete it takeover of Credit

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Speaker 2: Suite as soon as next Monday, the twelfth of June.

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Speaker 2: Shareholders will receive one UBS share per twenty two point

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Speaker 2: four to eight shares in the shot at lender. Separately,

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Speaker 2: Bloomberg has learned that UBS is looking to keep more

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Speaker 2: than one hundred credit suitee investment bankers in Asia.

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Speaker 1: Morgan Stanley believes that a sudden pullback in courtporate earnings

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Speaker 1: will slam the brakes on a US equity rally. Stratches

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Speaker 1: led by Andrew Sheets are predicting a sixteen percent drop

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Speaker 1: in earnings per share at S and P five hundred

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Speaker 1: firms this year. Sheets his team believe that the index

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Speaker 1: will end the year at around three thy nine hundred.

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Speaker 1: That is almost four hundred points below the close on

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Speaker 1: Friday and one of the most bearish forecasts on Wall Street.

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Speaker 2: Beijing has asked former British Trade Secretary Peter Mandelson to

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Speaker 2: lobby foreign business to invest in China. Speaking to Bloomberg,

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Speaker 2: Mandelson says to achieve its goal, the country will need

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Speaker 2: to rebalance away from nationalism.

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Speaker 8: They need to listen very carefully to international companies who

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Speaker 8: are already here or who are planning further in investment.

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Speaker 8: You know, there's a lot of bureaucracy, a lot of frictions,

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Speaker 8: a lot of emphasis on national security and data controls

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Speaker 8: and whatever. And I think the authorities in China have

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Speaker 8: to understand that this language is stop putting.

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Speaker 2: Mandelson's comments comes come after he spent a week in

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Speaker 2: China talking to leading policymakers, including the head of the

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Speaker 2: Communist Party's international department. His visit came as Tesla, JP,

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Speaker 2: Morgan and other foreign businesses were welcomed in China by

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Speaker 2: senior Communist Party officials.

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Speaker 1: And lastly, financial professionals have a warning for their employers,

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Speaker 1: don't ask me to come into the office more often,

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Speaker 1: or I will quit that. In the latest Markets Live

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Speaker 1: Pulse survey, which found that roughly one in two people

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Speaker 1: half of people who work in finance would change jobs

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Speaker 1: or already have changed jobs if their managers require them

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Speaker 1: to spend more time in the workplace. More than half

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Speaker 1: of the one thousand, five hundred and eighty five respondents

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Speaker 1: globally preferred a hybrid arrangement, whilst only about twenty percent

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Speaker 1: favored working entirely from the office. So those are our

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Speaker 1: top stories this morning, Caroline.

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Speaker 2: I'm fascinated by the result of that survey. I think

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Speaker 2: the conversation around hybrid working is kind of entering this

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Speaker 2: new phase now where all of a sudden, people are

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Speaker 2: in the face of increased instruction to return to the

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Speaker 2: office on certain days. The pushback is happening, and I

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Speaker 2: think the tight labor market is helping people as well.

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Speaker 1: Yes, absolutely, But what I want to say is that

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Speaker 1: most financial professionals, I mean, although a whole deluge of

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Speaker 1: people responded to this survey in really big numbers, actually

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Speaker 1: the vast majority of them are already working in the

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Speaker 1: office quite considerably, so you know, this is not necessarily

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Speaker 1: an option that all of them already have in a

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Speaker 1: big way. So it's people seeing the advantage of hybrid working.

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Speaker 2: And across all the regions that the survey covers, there

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Speaker 2: are more people in the office five days a week

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Speaker 2: than there are people fully remote, So most people are

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Speaker 2: in this middle section of working x number of days

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Speaker 2: a week in the office and three being kind of

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Speaker 2: the most common among those as well. I actually was

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Speaker 2: very interested to see that they also talked to ask

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Speaker 2: people about their spending habits during the week to see

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Speaker 2: who was returning to So most people are returning to

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Speaker 2: their post pandemic spending habits that's about half a third,

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Speaker 2: and no packing their lunch, eating office food or going

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Speaker 2: straight home without grabbing afterwork drinks. More often than they

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Speaker 2: used too.

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Speaker 1: Oh that's not good for the hospitality sectors, though I

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Speaker 1: suppose for the make up of our cities anyway, really

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Speaker 1: great survey that we had, the m Live Pulse survey.

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Speaker 2: Well, let's get more now on those reports of the

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Speaker 2: US may impose higher capital requirements on big banks. For more,

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Speaker 2: we can bring in our Asia Investing editor Russell WALLI

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Speaker 2: so great to have you with us on this. We've

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Speaker 2: heard lots of talk about additional regulation after the reasonal

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Speaker 2: banking issues in the United States. This would be a

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Speaker 2: major change though.

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Speaker 9: Yes, I mean the regulation that's taken place since the

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Speaker 9: global financial crisis really focused on the globally systemically important banks,

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Speaker 9: the biggest banks, and so under the proposal, according to

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Speaker 9: the Wall Street Journal, this would be lowered. That would

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Speaker 9: lower the threshold from two hundred and fifty billion banks

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Speaker 9: with assets of that size to banks with at least

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Speaker 9: one hundred billion in assets. So that would encompass a

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Speaker 9: lot more banks and subject those banks to much much

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Speaker 9: higher capital requirements, and of course comes on the heels

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Speaker 9: of the banking crisis that feared up in March.

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Speaker 1: But I thought the idea was that larger lenders are

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Speaker 1: well capitislized.

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Speaker 3: Has there been a shift on that?

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Speaker 9: Yeah, I mean, I think there's sort of a clear

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Speaker 9: understanding that all the regulations really focused on the large banks.

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Speaker 9: Banks do have a lot of enough capital. But then

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Speaker 9: you know, the regional banks, you know, this distress that

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Speaker 9: emerged and they're really sort of exposed a bit of

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Speaker 9: a hole in the regulation. And then you know, according

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Speaker 9: to this report, I think basically we can conclude that,

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Speaker 9: you know, regulators are seeing that they want to fill

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Speaker 9: that hole. They want not not just the biggest banks,

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Speaker 9: but but also the next tier of banks to be

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Speaker 9: you know, to have those capital buffers to to show

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Speaker 9: up the financial system.

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Speaker 2: What sort of effect could this have on the bottom

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Speaker 2: line of the veiggest banks.

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Speaker 9: It's a little bit too really to say really, but

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Speaker 9: you know, we're certainly going to see some sort of

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Speaker 9: a reaction when when the market's open on Monday, you know,

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Speaker 9: later today. But but certainly, you know, there is there

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Speaker 9: is a risk that you know, some banks, people might

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Speaker 9: speculate that some banks will need to raise extra capital,

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Speaker 9: and you know that that that could put it put

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Speaker 9: it in and shareholder value.

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Speaker 1: Yeah, yeah, okay, So then on that I think that

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Speaker 1: issue is really fascinating, and so this is the Wall

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Speaker 1: Street Journal reporting. Also, let's just remember that that lenders

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Speaker 1: in the US could face a twenty percent increase in

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Speaker 1: capital requirements.

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Speaker 3: It would also be for banks with one hundred.

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Speaker 1: Billion dollars in assets, so actually a lower threshold than

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Speaker 1: has existed previously, which is normally two hundred and fifty billions.

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Speaker 3: So that of interest.

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Speaker 1: But then, Russell, whilst we have you, let me just

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Speaker 1: turn our attention to the issue in Europe, which is

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Speaker 1: about UBS completing the merger with Credit Suite. There's also

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Speaker 1: an interesting news line that we've been reporting today about

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Speaker 1: the date of when that happens.

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Speaker 3: So things are moving forwards, that's right.

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Speaker 9: So ub a situative statement a short time ago, which

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Speaker 9: is good news for anyone concerned that the deal might

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Speaker 9: be facing delays. This was initially aimed to be completed

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Speaker 9: by the end of May. Now UBUS has committed to

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Speaker 9: a date or June the twelfth. This is one week

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Speaker 9: away at the earliest, so we can assume that the

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Speaker 9: progress is being made on that. But of course, you know,

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Speaker 9: completion of the deal is just the first step. The

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Speaker 9: real tough worker comes with the integration and it's going

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Speaker 9: to take much much longer.

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Speaker 2: Okay, Russell, our Aga Investing editor, thanks so much for

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Speaker 2: joining us that sort of award. They're speaking to us

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Speaker 2: on those.

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Speaker 3: Stories coming up next.

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Speaker 1: Rivals look to replace the Confederation of British Industry and

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Speaker 1: rogue trader Nick Leeson says he'll never stop investing.

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Speaker 5: Now the paper review on Bluebird Daybreak Europe. The news

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Speaker 5: you need to know from today's papers.

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Speaker 2: Elean Gerins is with us with the details of those stories. Leanne,

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Speaker 2: let's start in the Financial Times. The headline there British

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Speaker 2: Chambers of Commerce creates Business Council to rival troubled CBI.

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Speaker 4: Yes, indeed, Steven and we get this ahead of a

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Speaker 4: key vote that could decide the future of the CBI

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Speaker 4: Business Lobby Group. And we hear that this alternative has

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Speaker 4: now been set up. The British Chambers of Commerce says

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Speaker 4: it's going to be called the Business Council and it

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Speaker 4: claims Heathrow, V and Drax are among the members. The

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Speaker 4: largest corporates are looking for a different kind of representation.

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Speaker 3: Now.

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Speaker 4: That's after the leading a lobby group became plagued with

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Speaker 4: allegations of sexual misconduct. We have been reporting on that,

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Speaker 4: and the Guardian newspaper was the first person to lift

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Speaker 4: the lid on this, and it's more bad news for

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Speaker 4: the future of the CBI, as its rival, the BCC,

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Speaker 4: wants to become the UK's most prominent voice for companies

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Speaker 4: and is really pushing to do this while there's a

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Speaker 4: gap in the market. Leaders of the BCC are going

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Speaker 4: to be meeting in London today and that's before the

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Speaker 4: CBI holds us extraordinary general meeting seeking the backing of

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Speaker 4: its members, and we do know through Bloomberg reporting some

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Speaker 4: of the big businesses which were its members are going

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Speaker 4: to decide to sit out of that key vote.

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Speaker 1: Yeah, that's of interesting the confederation industry, who becomes the

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Speaker 1: kind of main voice for business in the UK in flux?

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Speaker 1: The Times, I mean while says that banks are earning

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Speaker 1: the screws on with a weekend of worse mortgage rate.

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Speaker 4: So it's more bad news really for households that are

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Speaker 4: facing increasing inflation and also food prices. But now the

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Speaker 4: escalating turbulence in Britain's mortgage market is just creating even

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Speaker 4: more uncertainty. So the Times newspaper says more than one

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Speaker 4: hundred thousand households are facing a squeeze on their finances

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Speaker 4: this month, and this comes as lenders are increasing their rates.

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Speaker 4: So Santande made changes over the weekend and TSB withdrew

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Speaker 4: all its ten year fixed rate mortgage deals on Friday,

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Speaker 4: and that was just with a few hours notice. Worse

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Speaker 4: and expected inflation figures are really what is causing this turbulence.

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Speaker 4: So we do know inflation file to eight point seven percent,

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Speaker 4: but it was actually above estimates and above what analysts

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Speaker 4: were hoping for, and this is a driving force behind

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Speaker 4: the rare action the lenders that we are currently seeing.

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Speaker 4: And we also know there'll be thousands of households coming

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Speaker 4: off fixed rate deals this month, which means they'll be

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Speaker 4: just paying more money for a standard variable rate if

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Speaker 4: they cannot get another new rate mortgage. So things are

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Speaker 4: really difficult, especially for first time buyers and households at

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Speaker 4: the moment.

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Speaker 2: Okay, well, let's go to the Telegraph next Leanne for

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Speaker 2: the story from Nick Leeson. I went to jail after

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Speaker 2: losing eight hundred million pounds, but I'll never stop investing,

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Speaker 2: he says.

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Speaker 3: Yes, he does say this.

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Speaker 4: So this is a fascinating insight into the Rogue Trader

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Speaker 4: on life after prison, his stock market investments and also

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Speaker 4: his retirement plans. Now, Nick Leeson is the rogue trader

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Speaker 4: who spent four years and four months in jail in Singapore,

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Speaker 4: and that was fraudulently racking up losses of around eight

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Speaker 4: hundred and thirty million pounds which wiped out Britain's merchant

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Speaker 4: bank bearings. That was back in nineteen ninety five. Now,

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Speaker 4: he did write a book and that did become a

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Speaker 4: film and he was played by Ewan McGregor in the

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Speaker 4: film on his book called Rogue Trader. He lives in

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Speaker 4: Island now with his wife and he travels the world

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Speaker 4: delivering these keynote speeches on his experiences. And he was

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Speaker 4: asked directly, do you still dabble in the markets? That

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Speaker 4: was the question post and the telegraph to him, and

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Speaker 4: he said, I still trade. I saw actively involved, and

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Speaker 4: I have a small pension through which I invest in

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Speaker 4: one or two relatively volatile stocks. But a really interesting read,

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Speaker 4: Caroline on somebody who was involved in scandal, but a

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Speaker 4: lot of different ways. He also explains that he thinks

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Speaker 4: that the bank was disorganized.

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Speaker 2: This is Bloomberg Daybreak Europe You're morning brief on the

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Speaker 2: stories making news from London to Wall Street and beyond.

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