Transcripts For CNBC Street Signs 20170608

Face of these key events with european stocks hugging the flat line one hour into the trading session while oil recovers from a 5 drop stateside. President trump told james comey, i need loyalty, according to the former fbi directors prereleased statement to congress. Comey, who will testify on capitol hill today said the president urged the fbi to make a public announcement saying it was not investigating him personally and pushed him to drop the investigation into former nsa chief Michael Flynn. Nbcs Pete Williams has more details from the sevenpage testimony. James comey gives a dramatic account, often in vivid detail of five oneonone conversations with donald trump. The first with president elect trump in new york on january 6th, a briefing on the investigation of russias meddling and salacious claims that mr. Trump was involved with prostitutes four years earlier the in moscow. Comey says he thought about whether to give an assurance about mr. Trump not being under investigation. That is true, mr. Comey says. We did not have an open investigation on him. Comey said he decided right then to document his conversations with mr. Trump and began documenting the conversation as he rode away from trump tower. Comey told him, i need loyalty. I expect loyalty. Comey says, i didnt move, speak or change my facial expression in any way during the act a ward silence that followed but later answered, you will always get honesty from from me. He also told the president that the fbi was not investigating mr. Trump personally. In his interview with lester holt, the president said comey requested the dinner. A dinner was arranged. I think he asked for the dinner. But comey says mr. Trump called him with the invitation and he says he got the feeling it was an effort to have me ask for my job and create some kind of patronage relationship. Next, february 14th after an oval Office Intelligence briefing, the day after National Security adviser Michael Flynn was forced to resign. He quotes the president as saying, i hope you can see your way clear to letting this go, to letting flynn go. Hes a good guy. Comey said i understood the president to be requesting that we drop any investigation of flynn into whether flynn made false statements about his conversations with russias ambassador to the u. S. But comey says, i did not understand the president to be talking about the broader investigation into russia or possible links to his campaign. Comey says he remembers leaving the oval office through the door by the grandfather clock and that he told only a few people about it because he didnt want to let the fbi investigators know about a request that the fbi had no intention of granting. After that, he says he asked attorney general Jeff Sessions to prevent any further direct communications with the president , but he says sessions did not reply. March 30th, the president called him at the fbi and asked what we can do to lift the cloud of the russia allegations adding, quote, that he had nothing to do with russia, had not been involved with hookers in russia and had always assumed he was being recorded when in russia. Comey replied that he told congressional leaders that the fbi was not investigating mr. Trump and added we need to get that fact out and added if there were some satellite associates of his that did something wrong, it would be good to find that out. Two weeks later, the president called again and asked what i had done about his request that i get out that he was not personally under investigation. Comey added, i have been very loyal to you. Very loyal. We had that thing, you know. Comey says he didnt ask what the president meant by that thing. Comey never says in the prepared statement that he thought the president s remarks amounted to obstruction of justice. They create an inference of an attempt to influence a pending investigation. That alone is not enough to make an obstruction case, but thats a big piece of it. Were going to take you to this. Polls are only in glasgow until 10 00 p. M. Local time. You can see media is capturing a photo opportunity. Back to a story that were covering, former congressman barney frank did not hold back when speaking to cnbc about President Trump and his probe into his russia relations. The democrat called trump the most incompetent chief executive in history doing damage to himself and populism, but he added that the current Political Drama will not lead to the an impeachment. People talk sometimes about reality. Is god going to come and take him away . Incompetentence is not impeachable. Hes an anguishing thing for the republicans. In fact, if you listen to the republicans talking about him, i have suggested all my former republican colleagues should hire choreographers for their Campaign Staff because all they do these days is dance around what they think about trump. Joining us now, william r. Rhodes, author of backer to the world. I want to start with the given stateside which is still around donald trump and this issue around james comey, how much influence was peddled from the white house. How significant are the events . Well, he think its very, very important. The question is when youre dealing with somebody like mr. Comey, hes a smooth operator and he had a lot of loyalty at the fbi, without a doubt. Markets are hanging on it. Its not clear youre going to get anything clear cut out of this to show an obstruction of justice. And you need Something Like that pretty specific. I think it will not come out clearly with, and it can basically come out that there was a difference of opinion between the two of them, a misunderstanding, so its not clear. But the question of russian influence is not going to die down anytime soon. The issue of impeachment is that republicans would have to sign off on that. What would it take to arrive at that conclusion . I think you would have to have something more specific than ive seen so far, and particularly these would be russia influence and an order from the president that would be considered obstruction. And i dont think youre going to get that. And so the cloud is still going to be there. And, of course, you have the independent you have an independent person, mueller, who was the head of the fbi prior to comey who was a person with a tremendous reputation on both sides of the aisle. And it takes some time for him to go through with his independent commission, you know, sessions that he will be having as to what really happened will. So i think this is going to drag on for some time. In the meantime, the dollar has been under pressure as a result of some of the allegations and the investigations come right back to levels we saw from the u. S. Election. Do you think this is the tray . Weve got a weak dollar now until we get clarity about any former tax changes and thats been the big hope that if donald trump can get through some of these allegations and finally, if the text changes, that would be supportive of the market. Do you think the market is losing some of its interest or hope that this is even going to happen . Well, i gave a speech about Columbia University in january and i said the new administration, the president had to do three things if he wanted to get to 3 growth. First of all, Infrastructure Spending and hes only now get to go that. Then tax reform and deregulation. Instead, they got themselves bogged down in Health Care Without having a plan. So i think a lot of time has been lost getting these three things done. At least were start to go move on infrastructure. I think the air control change to make it an independent body is very positive and this is being managed by one of the most competent members of the cabinet, elaine chow, who is the most experienced member because she was former secretary of labor, former head of the peace corp. I think thats positive. A lot of time has been wasted. So i think the kons b tragz now has to be on infrastructure, tax reform, deregulation and they ought to get their act together on the republican side as to what they actually want in the repeal of the obamacare or health care act. You just cant repeal it. You have to have something to put in its place. Well talk more about one of those points later in the program, deregulation with the dodd frank changes in the Financial System is front. Center for a lot of investors today. Thank you very much pore that global conversation. We will get more views on comeys testimony including a former white house official from washington at 11 30 cet. Now, we will have live coverage of james comeys testimony from 4 00 p. M. Cet on the network. Mean time, i want to take you on another unfolding story. Now the line from moodys, the rating agency, says qatars credit columbus would decline if tensions with fellow gcc tensions persist. Thats the line from moodys. Yesterday, we saw Standard Poors downgrade qatars debt as the currency fell to an 11year low. Moodys at this point keeping watch on what unfolds. Meantime, let me take you to european markets. We have the ftse below 7,500 points. Firmer on the dax, about. 2 higher. The French Market is slightly under water, only about two points. And its the italian market dragging today, down about. 3 . I want to take you to the sectors. You can see the outperformers, insurance, technology, real estate, basic resources, gains of about. 2 to. 4 to the upside, but to the downside, telecoms down 1 , but we have some stocks trading. Might be impactinging the overall sector performance. Auto is down about. 4 and media stocks also trading weaker today. I want to take you to the oil price because we saw that big retreat where yesterday down about 5 , the worst daily performance in three months. Investors have been weighing up the inventory picture, the opec nonopec deal, whether it happened or not. Its been a bumpy three months. Yesterday you saw investors seize on the inventory again, an overhang of stock thats not been cleared up despite efforts from producers to try and rebalance the market. This morning, though, youve got a bit of a liftoff from that base. 45. 95 on wti. Present is up about. 5 . The stokes across europe as a result of that lift, reacting to yesterdays wall street move. As you can see, mostly tradinging south. The russian producer dorosnetf down 1 . The ecb is expected to trim inflation outlook according to multiple reports. Theyre expected to present a mixed outlook for the euro zone economy. Lets get out to annette for more. Youre closely watching the language from mario draghi and what could change as a result today. Yes. The language is actually key during that press conference coming up here at 2 30 Central European time. We are looking at a change in language when it comes to the assessment of the economy. Previously, they were saying that the Economic Risks were still to the downwards and now we are thinking that they should say that the risks to Economic Growth are broadly balanced. That should be a sign that the ecb is moving. The baby steps towards the exit scenario, many people think they will unveil either in september or as well in december of this year. So another area of language tweaks might be the area where they could skip that downward bias when it comes to interest rates. That means that they should probably not say any more, that they also could cut rates in the event of an adverse economic scenario. Of course, a lot of focus will be the inflation outlook. We get an update of the socalled staff projection for Economic Growth and inflation and there are many reports which say that the ecb will cut its inflation outlook again to 1. 5 for the next three years on average, which would, of course, get more ammunition to the doves in the governing council. The doves, they want, of course, the extraordinary stimulus, meaning the Quantitative Easing Program to stay in place as long as we dont see as we see the inflation rate not really picking up sustainablely. The hawks are saying, well, were getting there, anyway, looking at the Economic Growth scenario. For now, the doves have the majority, mario draghi clearly made it pretty clear during recent appearances that he is thinking that inflation is still really sluggish and that the stimulus the ecb has in place is needed for the time being. So big news from the tapering front is not expected from that meeting here. We most likely wont hear any tapering talk here from mario draghi during the press conference. Well most likely hear baby steps, changes in rhetoric, changes in language. With that, karen, back to you. Annette, thank you for bringing us the latest. I want to bring you back to our conversation with bill rhodes. Bill, there are a lot of assumptions and consensus around time of changes here from the ecb with a september or december. You start to see a language change and shifts in policy. Whats your base case scenario. I think mario draghi is going to be very cautious. As you know, the germans basically wanted to cut back or eliminate the bond buying. Theyre more interested in that than they are in raising interest rates. I think hes going to be very occasionus on both because hes concerned about inflation. And remember the battle he had to get into some of the stimulus. So i think something will happen if inflation starts moving up in the fall. But otherwise, i think hes going to be very cautious. I want to pick up on the inflation point. To me, it seems there are assumptions that inflation starts to play wall. But if you look at the United States as an example, despite decent levels of growth, inflation has been a little bit of looser over the last year or so. Why do you think the european picture will be any different . Or will they be in the same situation as the u. S. Where mario draghi is seeing growth but inflation is just not picking up . Well, i think for a couple of reasons. One of them is the price of energy, oil and gas. Because every time it gets up to 50, if you want to use a dollar figure, be it west texas or brent, something happens visavis supply or demand and it drops down again. And thats playing havoc with getting inflation up. And this is a problem in the United States and also the question of demand in the sense of a consumer spending. So he think thats why mario is going to be very, very cautious because hes seeing problems with with the ecb in the past where theyve been too fast to jump, you know, on inflation. And so i think the word is caution visavis how mario draghi will act. I just want to let our audience know that the Prime Minister theresa may has turned up at a local polling station to cast a vote. You can see the outside of that polling station, but we obviously cant see theresa may because shes inside. This is her constituency as the uk conducts its general election today. So waiting for a live shot as the Prime Minister steps out. But well. Our conversation for the moment. Bill, i want to pick up on your point about the wind down of the spanish bank. A real test of the Banking Union for marks for the resolution process here in europe or do you have a different perception . No. I think this is the best case resolution and maybe whats going on in italy is the worst and also in portugal. And i think anna motine is a strong manager. Ive known her a long time. The way spanish authorities and someone there is handling this is how it should be handled. Well have to see the outcome over time. They have to raise 7 billion euros to put in there. But this is a bank thats had problems for a long, long time. They were too heavy in real estate and they were never able to raise enough capital, write off the bad loons as quickly as they should. If you want a good chance for resolution, this is it. The wind up would have to happen, given i tell was a failing role, likely to fail bank. At least we didnt have this long, drawn out story we have in london. Pasci, has been going on for years, meantime, the portfolio has deteriorated and its been a real problem the now, they finally look like theyre getting around to solve it, but they have two problem banks in the area of venice in northern italy which they have to tackle, also. Quite a different situation when youve had one strong bank in spain, santander, but then in the likes of italy you have banks that have been reaching in their pockets for a number of years. Theres not much left than to dig in their own pockets for and protect their own shareholders. I think the banking situation in spain is much different because, in addition to michael santone, you have bbva which is very strong, in barcelona its very strong, also. So you have three very strong banks in spain. Which makes it much different. And Banco Popolar was sort of an outright and theyve resolved that. Portugal still has its own problems. The way thats been handled has not been exactly the best. And then, of course, you have the situation of the greek banks which is an ongoing story. Were just taking a live shot now at theresa may, the Prime Minister, coming out of the polling booth station after casting her vote in the uk general election. This is, of course with, taking place in maidenthe head which is her loyal constituency. So cameras capturing the moment for theresa may. I believe weve had some pictures. The next shot will be jeremy corbin. Were going to squeeze in a quick break coming up as focus shifts to james comeys testimony today on the russian hacking. And well speak about the challenges of Cyber Security. Hey youve gotta see this. Cmon. No. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Joining us now, president of info watch group and natalya, your story is an interesting one for your company. I want to ask you about the work youre doing on Cyber Security in particular. Because this ransom ware attack honed the focus for a lot of corporates and individuals using computers that you need to do the basic upgrades to the latest software. What work are you doing . How sophisticated is it or is your basis on the upgrading of software . I think its the basics of every security. That have this up to dated with all the patches installed, with all the antiviruses fresh. And if we then the wannacry virus, the wannacry outbreak was a strange one. Microsoft had released a patch just two months before and it was enough time to have the systems updated. Why it had such a big impact i think was caused by two facts. First, by the fact that it was widely crucial virus itself because its encrypted, the code hardware. And the second because of the media effect. The media made it more bigger or bigger than it should be. I want to ask you, too, about russian hacking, which, of course, being a russian company, im sure youre briefed about this a lot. Given all the allegations, despite deniales from Vladimir Putin that there have been Russian Hackers involved with meddling from the elections from the United States to france . Well, let me start with the election, if i may. I dont believe that the modern technologists are so great that they are able to bring the sorts of the whole country into one direction. I think the technology there was some use of the technologies, but i think that wasnt the kissing. The kissing was a message was the elected president has given to the nation. And the technologists could differentiate the people right. But you couldnt differentiate them on their thought. It is yet impossible. Therefore, i think the situation with Russian Hackers who elected the president or influenced the election in the United States is a little bit of jump in on this. Natalya, this is bill rhodes. Id like to ask you about the vulnerability of the major Banking Systems in the world to Cyber Attacks, particularly the larger banks. Theres been a lot of talks about the Banking System not really being prepared or protected enough to marmg Cyber Attacks from whatever part of the world they might come. Well, thats really huge problem, yes. I have to say one thing. That unfortunately the hackers understood they could have still much easier through Electronics Communication rather than to break into the Banking System where the physical tools. And another thing which is very important, we need to understand the number of Crime Investigation which define tess people behind tefk is very low. Majority of attack left unknown. We dont know who was behind it because of the anonymity. I will say about 5 exactly had the result on the investigation. And this gives, of course, the good opportunities for the hackers because they feel that they can do it cheap and they can do it they can be caught. They will stay which is very good combination for themselves. Can i just ask you about entertainment because youve seen a series of hacks over recent years, sony and more recently disney, the key film was taken parts of the caribbean movie and not to mention netflix, as well, a new season of orange is the new black. Why are Entertainment Companies targeted . Is it purely about money . Which also raises a question should they just pay the sum if they are threatened . Well, im not sure if i properly understood the question. But if we speak about the motivation of the hackers, that most motivation is moved by the financial. They want to earn the monies. And the other motivations could be different as from, well, selfestablishment from my Political Goals up to having involvement with the competition or get some damage to compete. It was also the cases. So the motivation vary. Thank you very much for your time. I think weve got a few issues with your head piece there with the sound, but thank you for persisting with us, na tallan, president of info watch group. Were going to take a quick break, but lets leave you with some headlines. Its the testimony weve all been waiting for. Just a few hours before former fbi director james comey gets in front of congress to tell lawmakers how donald trump demanded loyalty in the russian probe. The draghi dilemma, the ecb president is expected to keep the money flowing. And investors on edge in the face of these key events with european stocks hugging the flat line 1 1 2 hours into trade while oil recovers from a 5 drop stateside. Stay with us. Its what busch is known for. What are you known for . Im cool under pressure. What is that . A fish hook . chuckling golly [sfx buschhhhh] lets take a look stateside. We are shaping up for a positive open to the market. Stronger gains for the german stock market, up about. 3 . But some weakness, still, for the italian market, although it has trimmed some lows while weve been on air. You can see down less than. 2 currently. On Foreign Exchange market, the Biggest Movement that were seeing on the charts, really, i guess contained to euro some pullback on the charts. 112. 46. All eyes on the ecb today and whether theres any change in language or in particular change to inflation forecast. Thats where some of the consensus has central around where you might see some direction in change for mario draghi today. We are in the morning session, slightly positive. The aus trailenan dollar, slightly pop,. 7549. The testimony of former fbi director james comey will dominate talk on capitol hill today. However, the house may vote to dismantle the dodd frank legislation. A republican bill would roll back financial regulations but would have to get through a skeptical senate to become law. Speaking on cnbc, barney frank reacted to the rollback of his regulation. Its not a lighter regulatory choice in some areas. Its no regulation. And no, i dont think its good news or the banks. Not all banks want this. I dont think it was good for the banks when we had the crisis we had in 2008. Part of the problem when you have nos rules is even those banks that want to be responsible are driven by pressure for shareholders. We had loans that shouldnt have been made. Other institutions then sold those securities and incurred the debts that will happen if the securities went bad. The securities went bad and there was no money to pay off the debts. So they went to the republican administration, the Bush Administration in 2008 which bailed them out. What they say is in our bill thats not the law, no, you cant make those terrible Home Mortgage loans. Secondly, you can do what you want with derivatives, but you have to do them on exchange which prevents there from being a lack of money or show us that you have the margin to back it up and if you go bad, then were going to put you out of business rather than keeping you going. And the republican bill in the house does away with all that. Lets get into a conversation, bill rhodes, about this. The changes taking place on capitol hill, regular hagz that was installed after the financial crisis. Too big to fail is what it was meant to tackle, but in the end, it felt like you were too small to grow. Do you think that is the right way to describe the changes that took place and do you think they need to be altered at this point . Well, i dont think you have enough votes in the senate to overturn it. Thats certainly what barney frank thinks. Because you would have to have some republicans who are not so sure they want to overturn it completely decide to do that. And all democrats would vote against it. I think what youre going to see is more on the implementation side. And dan tarula, who is a tough implementer of this at the fed is a senior person for regulation has gone, hes left, and whoever replaced this might think, well ease up on the actual implementation on some parts of dodd frank. So i think thats what i see coming. Ill be very surprised if they decide to completely eliminate dodd frank. Per se. I think its more on the implementation of it, particularlyport smaller and medium size banks. Ing i think both democrats and republicans agree that there needs to be an easing up of some of the regulatory over implementation, not oversight, of the small and medium sized banks. The problem is its such a convoluted story, its hard to work out what the bottom line result is for the banks. Will it be better profits because you have less regulatory capital are required to be locked up to offset some of the exposures you have in the system. Is that how it plays out . It could. But i think one of the things that we should make clear is in the United States, starting 2009, 2010, the banks of the United States raised tremendous amounts of capital, wrote off tremendous numbers of problem loons and here in europe, and particularly in the eurozone, they did not do it. And were seeing the difference today still, cases in portugal, this case, cases in italy, pasci is a prime example, but there are others and still even in greece. The so i think the american banks are well capitalized, their portfolios are in good shape because you had a tough regulatory oversight. And i think they need some easing up, particularly he in small and medium sized banks. And i think youll see that with the next head of rel regulation in the fed. Lets pick up on that story around the spanish rescue this week. The rescue of bank popular, a senior eu official has told reuters the source says regulators believe theyre now in a better position to resolve the crisis at Banco Populari and theres still a challenge of finding a willing buyer. Santander fell on news of its takeover. The ecb has stepped in at the 11th hour to help as the bank is unable to pay its debt. The final stigz to sell to san tappeder was made about 6 30 wednesday morning. Annette, no doubt the ecb and margo draghi will be questioned about the rescue and what it means for the future of other boonks in europe and the focus is really on those italian banks. Can we draw any messages away of which the speed of this rescue took place . Yes, actually, i think that will be one question which will be posed to mario draghi whether this is now a dem plate for other italian lenders. Mario draghi is eye tallenan himself and hes not answering these questions. Hes the president of the ecb, responsible for monetary policy. He will refer these questions, im pretty sure, to the head of theiel nui, who is not present here. But the question is valid, i have to say. It was quite a swift action from the ecb that triggered the bailout, the fire one can also say of banco popular. That can be a template for other lenders in italy, but what has to be in case we should see that as a template, i can the ecb will only act if theres a cash crunch at one of these institutions. That happened to banjo popular and thats why they said this bank is no locker viable. In case were going to see that with other italian banks, for example, we should probably be prepared for kwift action between from the ecb, whether they will find a buy we shall thats another question. With that, back to you. Thank you for setting the scene for us, annette. John raymond has joineds us, Senior Analyst european banks at credit sites. The difference here, santander are a very strong balance bank with a balance shes thats been supported by exposures across the globe. So well and truly in a decent position. Yet it still had to tap investors for money to complete this rescue of banco popular. What do you think make of the message they are sending and who do you think there are any lessons for what this means for italian and perhaps german banks . Its a particular situation. I think this deal made sense for santander. They can easily remain the capital they need while they go through it. Of course, there is the advantage that some new some of the losses would be absorbed by subordinated debt, additional tier one and tier two data supported debt. So thats a key part of this which absorbed around 2 billion of lows before santander had to come in and take it over. I think thats one of the things people need to think about under this new resolution regime. In the old days, if a failing bank was taken over by a heavy bank, basically all the liabilities will be supported. And, yet, this is the resolution regime as its supposed to work. You missed the deposit holders, as well. That was not the case here, but we did see, as you mentioned, some of the ded debt wiped out. Yes. What does that mean about debt in the Banking System if youre not a senior bondholder . How risky is the debt youre holding these days . There is a risk. And in this case, senior bondholders, you know, managed to get lucky and stay safe. But in future incidents, we could see senior debt taking some degree of loss and we have an isolated smaller bank cases. And this is really the problem in italy. You mentioned depositors. Italy is introducing depositor protection, but only from the 1st of january 2019. So at the moment, they have this problem that if they were trying on to bail in senior debt, it is perry pasu with all the guaranteed and nondefered deposits. So italy is in this particular situation where it needs to be very careful the way it handles resolutions. I just want to ask you about how you feel this example would pertain to the two banks and the northern italy and the venetian area because the solution from monte pasci is i dont think the ideal solution for banks Going Forward. And you still have noble banco to be resolved. How do you think this all falls out in the end . Well, in italy, i think it will probably be handled differently. As you say, its not ideal, but it could be handled differently and they could go for one of these cautionary precalculations. Youre declaring the bank to be solve ept when its having huge problems. But there is this problem with depositors, also, with banco popular. You had this chunk of real estate which could be valued in italy. John, can i interrupt you for a second . We are just get ago shot of Jeremy Corbyn turning up to cast his vote in the general election here in the uk. It has turned out at islington north, that is his constituency. He is on his way into the booth. The picture is not unstable at this point, but you can generally get the picture of what is happening live the there on the ground. As soon as the picture stabilize, you can take a further look at them. Im sorry to interrupt. Sure. I think a major difference between spain and italy is that in italy, the problem loans at banks are spread across a wide range of retail, small and medium size borrowers. Its hard to value them at a chunk of real estate properties. So yes, italy has been slow at dealing with the problem. Spain has been very efficient and quick, but i think there are reasons for that. Its not just that the italians aring dragging their heels. Its a different problem theyre confronting. Can i get into the detail. Weve still goal 37 billion in exposures on npls that santander has effectively knocked up in this takeover and its set aside money to try and resolve the situation. We saw after the financial crisis they were slow and even with the execution yesterday the rationale for buying this bank was its up on a domestic market. Is it fair to assume solution for santander is to hold on as much as it can without a fire sale of assets, hope that portfolio improves and that it makes more money from the purchase of this bank . Wrae. What it has done is taken its coverage levels up to many much higher than even popular was talking about. Popular said even at this level, our peer group is at this level and santander is providing assets at a much higher level. So that means that it can afford not to go through fire sales and wait a little bit. Bill, youve been critical about Banking Union and the clean up of assets. Surely, this must give you some hope that youve had ecb quickly stepping in and saying, well, this needs to be resolved the does that give you some assurance that at least the european Banking System is now getting closer to the u. S. . Well, when the Banking Union was put forward first in this is now four to five years ago exactly, the why would idea was you would have three legs to the stool. One would be regulation, the second resolution and the third deposit insurance. We saw the regular are lagz, which is functioning fine now, i think. I think resolution, as we gist heard, it depends on the country. So i think its not as exact as was laid out at the beginning. And, of course, we have no progress at all because of the germans mainly on deposit insurance. So i think we have a lot of work to do yet on the Banking Union and i think thats key because you see in the United States, 20 to 25 of finance comes from the banking side. The rest the capital markets. In europe, its somewhere between 70 and 08 of the banks and the difference being capital markets. So i think its imperative that they work out exactly how theyre going to handle resolution Going Forward in the more exact fashion and get on to deposit insurance. John, fair point just quickly . Yes. And another important thing happening in europe is banks are building up this layer of nonpreferred senior debt like the frpg french bank issuing and others. So in a fairley short space of time, its going to create something that ranks below senior debt and all the depositors. Thank you for joining us. Alletena could still be sold without a breakup. Lets get out to claudia more on the story. Its been pretty clear most airlines do not want a piece of alitalia. What happens from here . Its too early to tell. Theres a lot of interest around alitalea. Its not clear what everyone is interested in. 32 are the offers of interest to access the data room, of course. This will be filtered by the commissioners, because, as you were saying, they do want to continue to attempt to sell alitalia as a whole as opposed to breaking it up into parts or selling off the contracts or the routes or the fleet. So this means that they will have to pick the right offers to access the data room just to to give you some names. Delta from the United States, british airways, lufthansa is not clear whether they are in or not but it would certainly help them to boost their euro wings part of the business. Two chinese groups with hinan airlines, ryan air also interested in accessing the data room. Interested possibly in some sort of a feeder deal wanting to help out, but not interested, as they have said. Made official that they are not interested in actually buying up the whole airline. It continues to be a very difficult situation, but flights are guaranteed for a period. They do have a bridge loan of 600 million euros. In the meantime, of course, there is a meeting with the unions as a redundancy package has been announced for 1,350 employees of which 311 ground crew would actually be made redundant at zero hours. So there will be continuing to be an evolution that will be happening quickly, but right now, we are getting interest in parts of or possibly hopefully, according to the commissioners, as well as the government for the entire airline. The back to you for now. Thank you very much for that, claudia. In other news, alibabas twoday investors event has kicked off at the companys headquarters. The cfo has given revenue guidance thats well ahead of expectations. Alibaba shares are up 6 in premarket trade on the news trading at a record high. Lets get out to eunice for more. What are investors cleaning today from the update from the company . Well, everybody is focused on that very rosy guidance for fiscal year 20189, as you said. The consensus had been that the growth would be 36 on revenue of 31 billion. Well, the cfo presented a much more aggressive number, much to the delight of the crowds. Take a listen. 2018 annual revenue guidance. Were expecting 45 pefrs to t revenue growth. And that is you know, like i said, is not anything that we can adjust to make it happen. Its going to be all voted by of the merchants and consumers. And we have that confidence that based on, you know, the technology we have, the hope integrated business we have built, were going to achieve that. Alibaba believes that big data and ai will help it keep track of its customers needs and keep its customers much more engaged on its sites. The cfo said thats one of the reasons why youve seen a big push by alibaba to invest in digital contents, entertainment and Cloud Computing because theyre finding when people are lingering on the sites much more, they end up spending more. So the cfo said that is going to be reflected in the metric that they use and the way they describe their customers. They are no longer going to call their customers annual active buyers, but theyre going to cow them annual active consumers. And the ceo, daniel jong, said hes hoping to capture more consumers, not only here in china and the rural areas, but also overseas. This is what he had to say. A very, very clear picture midterm by fiscal 20, well have a midterm goal which is to grow our business from today, last year, close to 550 billion to 1 trillion u. S. This is a shorten to midterm goal. In the longer run, we have even we have an even aggressive goal which is to grow our consumers base to serve 2 billion consumers over the world. And tomorrow investors will get a chance to hear from the founder, jack ma, and theyre probably going to ask him about his new Retail Vision which merges online and off line shopping. Over to you. Eunice, thank you very much for bring us the latest. I want to come back to my conversation with bill about the chinese market. You had a downgrade lately for china. Are you concerned about the debt profile in china and the growth . As you know, ive been writing about that in the football times for the last two years because i think the growth of debt to gdp has gotten out of hand in china. Its somewhere in the area of 280 . And still growing. I think the government is much more concerned about it. The peoples bank of china has been very concerned b about this for some time. And i think the recent interventions, the strength of the renminbi is very much tied into showing the world that china is not going to allow the renminbi to sink too low because that encourages outflows. As you know, they put in a form of capital controls to keep the flood of funds going out because last year, they spent 1 trillion on supporting the renminbi. And that cut their reserves from 4 trillion to 3 trillion. I can its an area of great concern and i think moodys outlined it correctly. Well get into the conversation a bit more, but just a few thoughts there on china. Thank you very much for that. Coming up on the show, comey throws a curveball. All after this. Ure . Cmon, the future. He obviously doesnt know intel is helping power Autonomous Cars and the 5g network they connect to. With this, wont happen in the future. Thanks, jim. Theres some napkins in the glovebox. Okay, but why would i need a napkin . You could have just told me a bump was coming. We know the future. Because were building it. Good morning, happening right now, weve live in london with the latest. Comey heads to the hill, the former fbi director delivering highly anticipated testimony before congress this morning. And jogging on deck, the market awaiting a big decision from the ecb. It is thursday, june 8th, 2017. Worldwide exchange begins right now