So that is pretty evenly split, actually. Theres certainly quite a lot of recognition that Central Banks need to think about new toolkits. We are going to go to some questions now, but if you want. O use the platform to submit i think larry gave an excellent description of what the core problem is that the developed world faces, that there is a glut of saving and a , and it of investment really means that we have to have fiscal policy, structural policy, and things other than. Ust relying on Central Banks i think Central Banks need to do what can come about they can. Adopting a system called flexible average inflation targeting, i think this is an appropriate change. Somewhat improve the scope of Monetary Policy to show that shortterm Interest Rates are often constrained by the effect of lower bound. I think it is helpful in preventing a cycle of falling inflation feeding falling inflation expectations, but i strongly believe Central Banks need to be independent and need to do everything they can. The changes they have made, they are not a game changer from the point of view of secular stagnation, and bottom line, i agree with larry on what is required. Theres a lot about the importance of fiscal policy at this moment. I have to ask you, would you like to be more closely involved in that as a treasury secretary for the new administration . I dont have anything for you on that, im sorry. [laughter] do you think you would be a good treasury secretary . I could probably ask the rest of the panel that. That is for other people to decide, i think. Be a great treasury secretary. But let me talk about another issue which is related to larrys secular stagnation idea. In some sense, the hope for the world was that fastgrowing emerging markets in developing countries would provide that demand, which seems lacking at the aggregate level. One of the big concerns we should have with this pandemic is how much scarring has gone on in those economies because they havent had the ability to provide the kind of fiscal, as well as credit support, that industrial countries have. My worry is apart from the north asian economies which seem to have come out quite well from this crisis, many countries in latin america, africa, south asia are going to suffer some diminishing Growth Potential going forward, coupled with some of the impediments we see. I think this is a cause for concern for the Global Economy. It is something that we should work very hard on over the next few years to try and reverse, and that is where larrys call is of hugeleadership importance. Thatd where should leadership come from, if we dont think that Central Banks should be solving all of these problems alone . Right now it seems there is likely to be change in washington. Historically it has been the United States which has been the leadership. Whoas gordon brown essentially corralled the g20 into doing some important actions larry talked about, but we need somebody to actually take leadership now and corral countries into doing more, giving direction to the imf and the world bank, as well as perhaps getting some centralbank action into this, if necessary. World central bankers should be calling for urgent action in the communiques of the financial g20, which ultimately should leaders g20. The world needs the kind of g20 meeting that took place in london three months into president obamas term to set a strong global response. This doesnt involve any significant burden on taxpayers in the United States or other industrial countries. Fdrs more aggressive Financial Engineering from the world bank. The imf has twice as much gold by value as it did a decade ago because of the appreciation in the price of gold. Theres no reason why it cant be back to help support doing more for the poorest countries. The private sector has not inaged in any serious way debt restructuring for emerging markets. We all talk about cooperating with china on the most important global issues. There needs to be cooperation with china on the whole set of issues around support for emerging markets. Explainal banks could not that they could do it, but ultimately the Financial Stability of all the institutions they are responsible for, the Financial Stability of their economies depends much more urgently on achieving successful Global Cooperation then it does on anything else. If they could make that case, they would be making a much greater contribution to the current global moment than they currently are. Is much more difficult than that. In 2010, the issue was to bring countries together and allow them to do what we all wanted to do individually anyway, which was to ease policy, and to deal with the rather narrow problem in the collapse of the Banking Sector. The issue we have now is much broader than that. The problems of emerging market economies or low income economies are one thing, where Global Cooperation could help. Dealing with the underlying Strategic Issues is something rather different. And the problem is not the mandate of Central Banks. It is not the toolkit of Central Banks. It is understanding the forces that are leading the economy to grow very slowly. Understanding what is going on is far more important at present than the mandate of a policy framework. That i think is what needs to change, and it isnt just expansionary fiscal policy because Interest Rates are close to zero. It is much wider than that to deal with this problem of excess saving in the world as a whole, lower saving rates in some countries, higher saving rates and others. Go ahead. I was just going to say, i but i thinkervyn, the world looks to the central Banking Community to explain the nature of the macroeconomic challenges before it, even if the Central Banks themselves lack the tools to deal with it. If the central Banking Community can explain as janet just did, as i tried to a little bit and talking about the absorption of savings problems, if that problem can be laid out clearly, that is the first step. It doesnt solve it to lay it out clearly, but is a crucial step toward a whole range of measures, and your absolute right that it involves a million Different Things that are necessary to resolve it. But first we need to find that problem, and that is something Central Banks can surely do. I totally agree, and i think the destruction that moving to other policy issues is taking centrals away from what they should be doing is explaining the Central Global challenge. We can have this conversation all afternoon. I would really enjoy it. It has been a fantastic conversation. But we must move to the next session now. So thank you very much. Alix youve been listening to a panel with former fed chair janet yellen, as well as mervyn king and larry summers. Really interesting conversation at the Bloomberg Economy for them. You can continue to watch on neweconomyom and forum. Com. All of this taking place with rising virus counts, the questions of whether we will see this cool stimulus from the u. S. And when, and recovery questions and europe as well, and emerging really leading the way. Paulson hank paulson is also speaking right now. Lets listen to what he has to say. I am delighted to join this for a minutes third year, and i am pleased to see how it has grown and thrived. It is worth recalling that when we gathered for our first the outlines of our stormy present were already apparent. I remarked that we had arrived at a moment of change, challenge, and potentially even crisis. I warned that the prospect of a crisis between the United States and china was leading to the risk of an economic iron curtain. Fastforward two years. It gives me no joy to report that those warnings have been borne out. The u. S. China relationship has become more fraught. We have seen more tariffs, thehtened restrictions in flow of technology, disruption of supply chains, more restrictions on investment, and fewer capital flows in fewer sectors. Exchanges, fewer students and scholars are heading in either direction. Journalists have been expelled, consulates have been closed, proposed acquisitions and investments have been denied. Political rhetoric has become more inflammatory. It has given us a taste of how debilitating strategic turbulence can be. The pandemic has made the situation worse. Need to workchina jointly and with others to end this crisis, and soon. President elect joe biden has a generational opportunity to plot a course for america that allows us to compete and to thrive. I have known joe biden for many years. He is a unifier and a patriot. Administration is about to change, but the clock will not simply be rewound. Wastrump administration responding to real concerns of American People about china, and real failures of china to act as a responsible global citizen. The question is how we respond to these legitimate issues. One perverts benefit of the tensions that have characterized the last few years one perverse benefit of the egyptians that have characterized benefit of the tensions that have characterized the last few years, even those who did not agree with every policy choice in washington or beijing have come to understand that while new leaders can bring new policies, competition between big powers, especially between two big powers with rival ideologies, very different political systems, is mostly structural. Competition is now baked into this relationship. A competitive approach to china was inevitable. But keeping it healthy and not pernicious is vitally important, and that wont be easy. To compete effectively, president elect biden will need to get the dimensions of competition with china right. So what does that mean . For many americans, the goal of china policy has come to be one thing, achieving reciprocity. For most people, that means we will do with china only what china does with us. We will punish china when china harms us. The Ongoing Administration made this idea of reciprocity the very foundation of a strategy to work china. The strategy declared that the u. S. Would welcome economic relationships rooted in reciprocity, and playing that america would shun any and all american relationships that lack it. This vision was welcomed by many at home, and even some allies. At one level, this is unsurprising. It speaks to an american fundamental sense of fair play. It is simply unreasonable for beijing to expect the rest of the world to keep its markets open to china unless china continues to open its markets to the world. I have long made this argument myself, but this cannot be the end of the story. Here is the big challenge. America has an open economy, which is our greatest competitive strength. Contrast, has an economy that is closed in many areas. But whenever an open economy mirrors the action of a closed economy, the open when in evitable he starts to close itself off open one inevitably starts to close itself off. If achieving reciprocity makes the american system more like chinas, america will ultimately be the loser. We cant remain competitive if we become more like china with its closed status model, which i believe isnt going to stand the test of time. So it is time to adapt our principal desire for reciprocity to the evolving and realworld needs of american workers, farmers, ranchers, and businesses both small and big. It is time to move from reflexive reciprocity that responds fiercely and that ially to a policy call targeted reciprocity. We need reciprocity targeted to changing needs of the american worker. We need reciprocity targeted to keep american businesses competitive. We need reciprocity targeted to ensure that job creating capital continues to flow to the United States. We need reciprocity targeted to ensure that best in Class Companies want to remain headquartered in the United States. We need reciprocity targeted not anything and everything china does. Instead, the u. S. Should aim its demands for reciprocity at sectors and areas where america is the strongest and most competitive. Reciprocitye need targeted so that america doesnt become less american in the bargain. We must shift from reflexive reciprocity to targeted reciprocity that holds chinas feet to the fire without making it harder for americans to thrive. Targeted reciprocity would shift our strategy from reactive to proactive. It would leverage what is best about america without losing sight of what is most competitive about america. But the path to success begins at home, and the first step is to reinvest in the policies and values that have made america thrive. Many people fret that there will be a military crisis between the United States and china, and with good reason. But this is an economic competition, not a military one. Is the foundation of military power. Economic power made america the worlds Growth Engine, and economic power enabled china to become a Growth Engine more recently. So if americans want to compete with china over the longterm, we must reenergize a system that has made our country the in the of the world for generations. We must prove our economic model is better than authoritarian state capitalism. Our success or failure here will be the key to American Global leadership, to what china does. We need to look to the future and design an Economic Recovery Program that bolsters our competitiveness. That means supporting innovation , upgrading our social safety net while maintaining incentives to work, investing strategically in infrastructure, reforming immigration policy, and importantly, addressing our structural fiscal deficit. Targeted reciprocity is the best means to execute this agenda, and that brings us back to china policy. Be First Priority must rebuilding the Global Economy in the wake of covid19 and creating Job Opportunities for americans while reducing economic disparity. The two largest economies as the two largest economies, it is in the interest of americans, chinese, and the world that the u. S. And china find a way to globalbal, growth economic growth. Relentless competition where the two governments seek to curtail all trade, investment, and technology flows between them will make that very difficult. Of course, investments that threaten our National Security should be prohibited, we must be careful to avoid sequestering so Much Technology that American Companies lose their ability to commercialize and deploy their products in the worlds fastestgrowing markets. Companies need to know where the u. S. And china are going to cooperate, where they are going to compete, and where they are adversaries. We need major adjustments to our economic relationship with china , but we must reject the increasingly popular idea that merely having an economic relationship with china is somehow bad. What we need is one that is better suited to americas own interests. Economic linkages that are the rightful source of so much fact,n today do, in benefit us in important ways. Circuit is so here is what targeted reciprocity looks like. President biden is a multilateralist. He understands we should be working with other nations to pressure china for structural economic changes. Biden should coordinate with leading economies to update the global system and its governing bodies like the wto. Global rules for trade, thestment, technology, environment, and the Digital World must be updated. If these allied economies can agree on a framework, they will be in a far stronger position to invite china to join if it is willing to meet their agreed standards. If beijing refuses to join this effort and remains inflexible, we should look to a punitive toolkit dealt on targeted reciprocity that includes jointly withholding access to our markets. Tocourse, that brings us bilateral tariffs which have been key to the trump era. There erratic application has harmed the u. S. As a Global Supplier and a safe harbor for investment. Much of the damage has already been done. The trade deficit with china continues to rise. We should now link tariff removal to a new approach founded on targeted reciprocity. I would only remove existing tariffs when we have extracted a reciprocal and tangible benefit from china, met by defined benchmarks in a phased bilateral trade agreement. The Biden Administration should initiate a company and have new round of bilateral negotiations with china. It should aim for a fair, sweeping, and reciprocal trade relationship based on more meaningful competition. Heres another strategy. Instead of president trumps emphasis and outdated emphasis on outdated, ineffective purchase agreements, we need to open key areas to investment and export. We must tackle the market distortions of chinas stateowned firms, and we will need to deal with structural and process issues that include services, not just goods. The agreement should be done in phases with regular deliverables, beginning with easier issues that build momentum to tackle the tough ones. In return, the u. S. Should be prepared to open its own markets. We also need to be more consistent and predicable. Achieving this will be hard, but key in ensuring a better recovery. Another important component of a refreshed agenda is to forestall environmental catastrophe. Climate change is the most certain and formidable economic challenge the world faces. As governments develop their post Pandemic Recovery strategies, promoting environmental goods and services should be a core part of fiscal stimulus plans. China took a positive step with its Carbon Neutrality pledge, but we should consider Climate Change as another economic issue that demands targeted reciprocity. For one thing, working with china is in our selfinterest. If we want to prevent the worst climate outcomes and preserve essential and fragile ecosystems, we need china to solve its massive environmental problems at home and adopt better practices abroad. America also needs to capitalize on huge Economic Opportunities in china and globally. That means ensuring opportunities for our businesses to invest in and export Clean Energy Products and technologies , as well as environmental goods and services. Plans an administration fresh start in climate diplomacy, beginning with the paris agreement, so we all have a new opportunity to rethink International Climate architecture. By now it is clear that aggressive climate targets are insufficient. We need to create a structure with teeth, one that focuses on the major economies, including china, and it deals squarely with the problem of free writing and creates strong free riding and creates strong incentives to curb emission. This should include bringing Clean Energy Technologies to the scale necessary to address Climate Change. We also need to provide incentives to Channel Private sector capital into Innovative Solutions to support Green Development and value nature. In the same spirit, our two countries should left tariffs on environmental goods and services. China has resisted wto obligations to do just that, making it impossible to participate in china to help clean up its air, water and soil. Once again, targeted reciprocity can be a negotiating tool and lever to help all of us, including beijing, make decisions that are in the Global Public interest. , thes and gentlemen discussion at this forum is vital. We are in the midst of a turbulent and painful period. For the first time in years, we have opportunities to make a fresh start. Our first goal must be to crush the virus. Our second should be to reduce andrisks, unpredictably, volatility that have damaged our ods ands liveliho businesses both large and small. This is president elect bidens essential task, and it is our essential task. Getting strategic competition with china right will quite simply have to be part of this. Competition without unnecessary confrontation should be our goal because confrontation without effective competition has produced poor results for the American People. It has damaged our economy. It has stunted our export opportunities. In time, it will threaten the peace of the world, and it does not make us safer. So we will have chaos and conflict if we cannot get this right. This is in no ones interest, not americas, not chinas, not the worlds. Productived u. S. China economic relationship built on targeted reciprocity is what we need now for the United States to restore and strengthen its global leadership, create a safer america, and support world peace. Thank you very much. The former u. S. Treasury secretary hank paulson speaking at the Bloomberg New economy forum. Targeted reciprocity. Think about that in the context of the cold war. Containment rolled back. All of those kinds of phrases. I wonder whether you can add targeted reciprocity to that. Hank paulson talking about the transition as well. Henry kissinger talking about that as well. He had this to say on another panel earlier on. America and china are now drifting increasingly towards confrontation, and they are conducting their diplomacy in a confrontational way. The danger is that some crisis will go beyond rhetoric into actual military conflict. Henry kissinger, obviously famous for the late 1960searly night and 70s detente that ultimately that ended in the soviet invasion of afghanistan that very much tente, so it is interesting the different approaches being taken. Clearly language and advice being given to the Biden Administration couched in cold war terminology. Alix interesting because of the news over the weekend about asiapacific nations like china, japan, south korea, basically signing the Worlds Largest regional free trade agreement. It is kind of a mouthful. Youre basically looking at 26 trillion worth of goods that are moved around, about 30 of the worlds gdp. It will make trading a lot easier. The difference between that and the the Transpacific Partnership is china is involved. What it winds up doing when the u. S. Might have to rethink their strategy under a joe Biden Administration towards china would be extremely interesting. Guy interesting to take it back to the cold war. Hegemonic influence, spheres of influence were dominant theme during that era and you go back and think about the fact he described war in a mercantile way. You can certainly see that playing out. Lets get back to the markets and talk about what has been driving things today. It is more about the vaccine story front and center. 1. 3 . Oxx 600 up over the last six days, i will include last monday, we are up 6. 5 on the stoxx 600. Today adding more to the upside. You can see the move higher. As a result of the efficacy rate , the higher by moderna details of the vaccine it published earlier. Lets talk about what is happened across europe and through some of the other Asset Classes as well. I bring up madrid. What we are seeing in milan, highlighting the fact we are seeing peripheral europe responding. These are Service Sector economies driven by tourism. That is one area we are seeing a benefit. The dax is up last. The cac 40 is up 1. 92 , benefiting from what we are seeing today. It is across a bunch of Asset Classes we are seeing this uplift. Oil trading higher. Still up over 3 . Unsurprisingly with a selloff in the bond market, was not that way first thing this morning. The interesting thing is very Little Movement in the bond market and in the currency market. This looks like it is in the Commodity Markets and the equity market we are seeing the effect of the vaccine being felt. Emerging stock stories. We will talk about these in more detail in just a moment. As the inner British Airways and iberia. That stock is flying. We will talk to analysts about that. Bbva sale ofthis its u. S. Business to pnc which is having a huge impact on the Banking Sector in europe. Bbva up 16 . People are talking about that cash being deployed making major acquisitions. Sanford l up 25 . Alix lets dive into more of that with pncs purchase of bbva. Isning us from madrid bloombergs Charlie Devereaux. Why are we seeing this deal get done . Think it is a happy coincidence or you have one bank flush with cash and one bank in need of a cash injection. A 15ve pnc which had billion whole burning in its pocket after setting a stake in blackrock, and you have bbva, which has one of the lowest capital ratios in your and his business in the u. S. Has been struggling. Capital ratios in europe and whose is this in the u. S. Has been struggling. From bbvas point of view this seems like a good deal. Times the value assigned to it by analysts. What is the cash in bbvas pocket going to be spent on . Charlie that is a pretty good question and certainly that is one of the options. We just 10 news out in local media that bbva has hired jp it on potential acquisitions. Today triednagement to stress they did have other options. Is m a and its key markets. Others could be share buybacks and organic road. Organic growth. Alix a rotating ball of money from the sale of pnc to blackrock. Where does this leave u. S. And European Bank systems . This is a huge growth channel for pnc. Charlie it seems like that. This is an opportunity to move into another region. If otherave to see regional rivals respond to their expansions. Guy we will leave it there. Thanks for the analysis. Bloombergs Charlie Devereaux on the transatlantic banking story that has lit up the story on both sides of the pond. Lets get back to the main story. Moderna says its covid19 vaccine 94. 5 effective in analysis of a late stage clinical trial. Data showing the vaccine prevented alstom to meditate is of the virus and the 30,000 patient prevented all symptomatic cases of the virus in the 30,000 patients. We recently spoke to the ceo of moderna. This is what he had to say. Ok. Well bring that in a little bit later. Joining us for more, from moderna is bloombergs very own sam fazeli. Hit the nailalix on the head at the getgo of the interview. This is an effective drug like the pfizer, and effective therapy to deal with covid19, an effective vaccine, but it can be stored in a much higher temperature. Is that the key difference, and how important is that . Sam sure. We are talking still pretty cold temperatures, 20 celsius. Mostelsius is similar to deep freezers even i have one at home. That becomes a lot less of an issue for this vaccine. Facturse, you do have the we do not think that in the developed world there is an issue with using even the negative savvy the 70 vaccine that pfizer developed. Ebola vaccine used in africa needs very low temperatures for storage. Win because it makes life easier, but it cannot be the only reason you choose one vaccine over the other. And i werex guy pumping you for questions before the interview. What wasnt answered . What are some things Market Participants need to Pay Attention to . Sam one thing about the early population, and i heard you asked and he said we do not know yet. We have calculated. At worst it can be 50 protective because you only have five cases of infections or disease in the vaccine arm and elderly people in the trial so far with cases. At least 50 protective and im sure it will end up being more like 60 or 70 . Why we focus on this . Those are the ones most at risk. If you put that together with the fact that the 11 cases have severe disease, none were in the vaccinated group. We have a pretty good set up. Other question i was fascinated asked was about mink and what happens if we get a mutation and whether or not messenger rna will be the right the best way of dealing with that . He seems to suggest it was. Why is that . Sam he is absolutely right. We do have to worry about mink and nonmink and any other source of mutations. When this virus is rapidly spreading amongst humans, it could have a better opportunity to mutate and evade our immune system if that will happen. Vaccinety of the mrna is all it is is a chemical synthesis of a long piece of rna, and you just swap it, you put the needle in from the new virus with a hoping it would be effective in inducing an immune response. That has to be studied. The process of getting to the next vaccine is a lot faster than normal circumstances. Guy thank you alix thank you so much. Always great to catch up. Thanks for your help earlier. We want to get more insight in the rally in the travel sector. The moderna news came after the pfizer news but the effect is different. Joining us is mark manduca. We saw tremendous rally last monday on the pfizer news. Today is muted. Walk us through what you are noticing. The good news is coming fast in terms of catalysts. We have had one vaccine, now it is not a vaccine, and positive news. We have a streak of updates coming in the near term, whether movies,e north atlantic lower quarantined times, if you are lockdowns, it is potentially coming in the next month. It is too late to be bearish, at least in the next few weeks. The most important point, which you touched upon in the segment. The airline and broader aviation sector has been in the wilderness for so long. We have been sitting with such significant underweight, particular those institutional investors, and therefore the head of your end therell be a lot of emotion, a lot of chastened momentum, and the same investors will be filling the gaps in their portfolios. I think it will get a rational with a stampede. The question i would ask is are we fundamentally out of the woods yet . Guy what is your answer . Always good for a rhetorical question in terms of thinking about the negatives out there. The first thing i would say is lets take a step back. What is the smart money going to do . I personally would be saying it is probably too late to change. We will get overextended in the next few weeks, possibly few months. I look at this and i say to myself once the steam has come out of this, once the overextension is there, what do you do . Valuations are a bit of a dirty word in the airline space. We use that in our lexicon for a while. Certainly over the last nine months. Instead we favored phrases like momentum and catalyst. Everyone who has a fundamental backbone will have at least a pause for thought. The truth is clear that if you look at the valuations of these companies, and like i said i appreciate there is momentum at the moment, but you are trading at peak multiples on close to peak earnings for most of these names right now. Therefore if you have a sense of what happens to the corporate recovery, what happens to the leisure recovery next summer, if we get any sense of a misstep, those peak valuations, those peak earnings being forecast, i worry. Think about this. Companies will be looking at their share prices on enterprise values bigger than they were even precrisis. Look at love concept. Look at lufthansa. Guy that is exactly where i wanted to go next. How big could that dilution be . That strikes me as the rest. These companies have been beaten up, theyve been searching for ways to raise money. The market is providing them with one. How big can some of the dilutions be . They look massive. Fundamentals remain challenged with or without a vaccine over the next six to 12 months for airline travel. There will not be a magic fundamental bullet for recovery despite it being an obvious step in the right direction. The demand curve will still be uneven and truncated and if you speak specifically about what your previous guests were talking about, adoption rates, true safety, dosages of all of these vaccines are still uncertain. Then there is the corporate market. That will still be reticent. Employees will not be sent abroad because there is a vaccine. The airlines this winter are still going to be burning cash, and as you say they will use it as an opportunity. Easyjet, are they still going to raise 400 million to 500 million of additional cash . I do not think the outlook has changed too much. Still likelyes it need more than 3 billion . Of course it does. It has taken a significant chunk of money from the government and that we need to be paid back. Winter will still be tough. The vaccine does not change the trajectory and the dilution is still sitting on the cliff of q1. Alix you brought the european guys. A question on the american airlines. Does this make the case of getting more stimulus for the sector in washington less appealing . Are they going to have a harder time doing that if you have a monster rally in the stocks . Mark it is always difficult to say how governments will get involved. If you see Airline Share prices go up across the world, not just in the u. S. , it goes back to guys point about being able to solve the problem for yourself. Think of market capitalizations meeting you can solve the problem yourself. It becomes difficult when other sources of capital dry up and your market caps are low. When market cap start to become buoyant, that is when you start to get raises and funding taking place and the lesser need for government involvement. Guy always a pleasure. Thanks very much, indeed. Mark manduca, citigroup associate director of research. Stocks Flight Airline stocks flying higher in europe. Marketsok at where the have settled. A positive day, but very different last monday. We have seen rotation. The ftse 100 outperforming. Well have more on what is happening in the u. K. In just a moment. Dont forget to tune into bloombergradio. Com of the hour. Jon ferro and i will be walking you through the area through the hour. We will have more on the moderna story. This is bloomberg. Ritika this is the european up, celineing galler. This is bloomberg. Guy brexit talks are entering another critical week. Officials from both sides in the coming days seek to reach a deal that can be ratified and implemented before december 31. Anand menon. Good afternoon. Another pivotal week. , the spokesman briefing reporters earlier on talking about there being no change in the u. K. Approach. You think the departure of the vote lead crew from 10 downing street will have an impact . You think a deal as possible . Anand yes and yes would be my answer to those questions. Yes Dominic Cummings leaving will have an impact because it causes a degree of chaos at number 10. The Prime Minister has replaced him, he has to find himself a new team, he has to think about how his government is going to work, in that respect it reduces the amount of time that can be paid to brexit negotiations. A deal can be done, yes. I think it is probably the case that for three or four months everyone has known what the deal would look like, were just waiting to see if the sides will give ground in the area where they have to to make that deal possible. That is why the issue of the Prime Ministers time is critical. It seems to me that on our side, and the u. K. , the Prime Minister has to have a frank conversation with those around him and decide whether he thinks it is worth making the compromises to get the deal or politically it is not worth it. Alix can he do that in isolation . Anand absolutely. He is still working from number 10. I imagine he has access to skype, zoom, and phones so he can talk to people. It is not the same, but he can talk to those around him and senior members of his government. One of the questions has always been whether or not he is getting conflicting opinions of different people. There are some who favor a new deal outcome. There are others worried about it. Ultimately he will have to make up his own mind and act accordingly. Guy lord frost is still leading the negotiations. He was part of the probe leap crew or was very close to them. Leave crew. Anand i correct you slightly. David frost was not part of the vote leave during the referendum. Guy he was close to them. Anand he certainly outed himself as a brexiteer and espoused a hard version of brexit. U. K. And i think david frosts view is that of the Prime Minister. There will not be a reversion to a soft kind of brexit. The big question the conservative partys division between those who think it is worth making concessions to get. His thing trade deal people like michael ghosn certainly think it is worth getting a deal, but given that getting a deal will still mean significant disruption, it might be in our interest to go for no deal because at least that way we can blame the European Union in january. Alix what role did president elect joe biden light in the conversations at 10 downing street over the last couple of weeks, specifically when it comes to reshuffling his inner circle . Anand i dont think yet anything to do with reshuffling the inner circle. I think the tale of drama in downing street is a tale of personal jealousies and animosities that had been bubbling up for a while and was independent of the election of biden. The outcome of the u. S. Election was not a major factor for the united kingdom, but in a sense it weighed toward the size of those who wanted to see the government take a different tack. Particularly when it comes to foreign policy, Boris Johnson is setting himself up as a liberal international order. The election of joe biden will only influence that sort of thinking. It has been a pivotal week. You talk me through how much time is left because weve had a lot of these kinds of weeks . Anand i seem to spend a lot of time in the last years describing weeks is pivotal song of reluctant to do things again. Things can drag on. Is meantean parliament to vote on a deal the week of the 14th of december. Now the European Parliament is saying we can arrange a virtual session between even christmas and new year. There is still time. A the end of the day, this is text that has to be carefully checked by lawyers, and then on the eu side translated into a host of languages. While we are probably not at the end of the road yet, i would say the end of the road is homing interview and there is not that long before you end up up with the deal they can passel the hurdles it has to. Alix thanks a lot. Of Kings College london. When is the deadline . I do not understand when im supposed to care. Guy i do not think you are alone. We have had many of these pivotal weeks. We will have a few more. We were talking earlier on about European Banking, what is happening with bbva. Bbva says it is in talks with sabic out on a potential murder on a potential merger. It willooks like generate further consolidation within the European Banking space. Banks one of the prime drivers in europe. There are the share prices. Target of 24 . Guy the rolling ball of money alix the rolling ball of money with the black rock stake in pnc. It is an interesting session in addition to the moderna news. Tack is not selling off. It was weaker earlier. Youre not seeing that reaction in the bond market you saw last monday, which begs the question, what is baked into the market . Many strategists were saying madera news was baked in so will not see much of reaction. Where you are also not seeing it is the fx market. Youre getting risk on currencies taking you move, but not europe, which i found interesting. That wraps it up for me and guy on this monday. Coming up, hank paulson will be joining balance of power with david westin on Bloomberg Television and radio. Do not miss that conversation. This is bloomberg. David from bloombergs World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. A check on the markets. Up again today. Abigail doolittle is here. It feels little bit like last monday every morning on monday morning and we have a new vaccine candidate. Againl deja vu all over caret stocks popping more than 1 . The s p 500, the dow, the nasdaq not quite as much. That speaks to what we saw last week. This week it is no dare not. There vaccine candidate this week it is mode dare not moderna. We have a nice cyclical rally. Itself ist moderna popping. Folks hopeful we have an economy that could be able to normalize when this economy when this vaccine gets out there on a more widespread basis. This is bringing wh