Its a good start says Angela Merkel of theresa mays plan to guarantee the rights for eu citizens living in britain, if the favor is returned by the continent. But Jeanclaude Juncker doesnt seem so convinced. I want to reassure all those eu citizens in the uk who made their lives and homes in the uk that no one will have to leave we wont be seeing families split apart. This is a fair and serious offer. Has theresa may stepped in the right direction . Its a step but the step is not sufficient the Irish Government hailes the success of aibs ipo as a milestone, after the bank raises 3 billion euros spurring a rally across the sector. Chinas csi index closes up over 3 despite the jitters around wanda and fosun amid reports chinas regulator warned of their Systemic Risk its a clean bill of health for americas banks. All major lenders passing the federal reserves latest stress test raising the prospect of a pick up in payouts to shareholders fabulous to see you this friday we have a tired looking European Equity market as well. I would suggest to you that despite the fact we had focus on commodities this week and today well spend time looking at the various final market stories around the world, certainly in that sector, i think its generally tired this market. Its waiting for the next impetus to see another uptick and get back to record levels that weve been visiting so much over the last few days as you can see, about 70 of stocks in europe are seeing a down tick. I would suggest given the that is correct were down 0. 2 on the stoxx 600, none of those stocks are marked down, apart from dominos pizza. Real concerns about a price war with pizza hut and other delivery mechanisms. Lets look at european markets ftse 100 trading 0. 4 lower. It seems to be ignoring politics, a lot going on in brussels today well come to that with willem in a few moments time. Xetra dax down 0. 2 . As is the ftse mib and the cac huge focus on the Financial Sector overnight the u. S. Financials along with Consumer Staples were two sectors which were soggy, which helped to negate the fact that healthcare in the United States was a very robust sector what do we have here today not a lot. Very small amount of movement. Thats despite the fact that left, right and center there are big financial stories including the fact that the Irish Government has hailed the success of the aib ipo the new finance minister is in, paschal donohoe, he says it is a significant milestone and a strong platform for the state to recover the money it poured into the bank after the ipo was priced at 4. 40 euros raising 3 billion euros in gross proceeds. The offer was four times oversubscribed bank of ireland initially opened higher, boosted by the aib news but has since come back a little bit. Just looking looking at bank of ireland. Have we got bank of ireland . No bank of ireland i can tell you about the irish banking situation, hugely controversial. Many people thought it shouldnt be bailed out. Many people thought the bond holders should have taken a whole lot more pain, and you will recall the government two governments ago took on the Balance Sheet, 64 billion euros in pain from these banks incredibly controversial circumstances. Interesting that donohoes predecessor might reckon it would take up to 8 to 10 years to put aib back in full private ownership. If this is maintained i would suggest it could take a significant amount less. Im not saying there are not headwinds in ireland they have enormous debt to gdp, there are negatives, but the Irish Economy has been growing at the top of the eurozone for a long time. The poster child, if you will. Lets move on to the broader situation in europe. Eurozone services, pmi, june figure, 54. 77 versus 56. 3. So services pmi across the eurozone a bit soggy, yet the eurozone manufacturing figure, thats slightly better than expectations coming in at 5 7. 3 what has it done to the composite . 55. 7 versus 56. 8 theresa may has told eu leaders that european citizens living legally in the uk will be allowed to stay after brexit thank goodness for that. Ridiculous situation holding these pore people to ransom. European heads of state including Angela Merkel and the austrian chancellor have welcomed the offer as a good first step speaking as she arrived for a second day of talks, may rallied support for her proposals but not eu leaders, not all eu leaders were convinced by her plans. Take a listen. I want to reassure all those eu citizens who are in the uk, made their lives and homes in the uk, that no one will have to leave. We wont see families split apart. This is a fair and serious offer. A step in the right direction . Its a first step, but this step is not sufficient i think thats churlish of juncker there. We were bemoaning yesterday how awful it was of the British Government to not put this to bed ages ago let them stay, they are contribute together british economy, good people, for juncker to say that thats bit churlish, isnt it we will he has more details on monday from theresa mays government once they put out a consultation paper explaining jurisdiction of the courts, future rights of dependents, all these things that were part of the principles put forward by the European Commission when it said this is what were looking for. And definitely the british side has fallen slightly short of that from what we heard from theresa may last night theres a bit of waiting, we may get that on monday a complex set of conversations around that issue. Of course between now and october well have both sides trying to figure out the financial bill, the socalled divorce bill from the separation finally the other big issue is around the land border in ireland. They have senior individuals involved in the negotiations of that, which will continue over the course of the two years. Until the progress on those three issues, it doesnt look like the uk will get to talk about trade until that happens in terms of the progress on day one, the fact we can get this statement from the uk Prime Minister and the fact that the really important person in europe, Angela Merkel said this is a good start, does this mean actually despite the fact theres been domestic rhetoric, probably across the continent rhetoric, the british dont have a clue of what theyre doing, are we slightly advanced in the plan and in negotiations than many people may have thought 24 hours ago . Last night was the first time we had anything as far as concrete proposals from british side that were made public these are quite specific time lines for these european citizens in the uk thats a certain form of progress yet at the same time we heard from donald tusk that he is not closing the door on the uk hard brexit, soft brexit, no deal some of my british friends have asked me whether brexit could be reversed and whether i could imagine an outcome where the ukstays part of the eu. I told them that in fact the European Union was built on dreams that seemed impossible to achieve. So, who knows. You may say im a dreamer, but im not the only one so clearly donald tusk there is a beatles fan and a bit of an optimist about this, but there are therefore conflicting messages we heard jooeanclaude juncker essentially saying the uk is not showing enough commitment already. Yet here he is, donald tusk, saying if you want to stay part of the European Union down the road, id love that to be the case that was john lennon rather thanbeatles, i will allow you to get away with that one. Wei lei joins us nice to see you today. Thank you very much for joining us in terms of the investment outlook, i notice european stocks are down today. Theres no particular catalyst i would suggest for that are we just running out of steam or holding back before it has another run at new records momentum seems to be taking a bit of a breather at the moment. But we think there remains to be upside to be reached for european markets and more broadly for risk assets. I think its important to manage expectations, if you think about what has been fueling the stocks upside since last year initially we have a period of growth excel rag, realacceleratu with rapid trend now were going from acceleration to sustained expansion. Given the pace of recovery that were expecting at this moment, its also important to adjust expectation for stocks and yet there are concerns about financials and catalysts that will take us to the next level. Financials out of asia, financials in europe news around ubi banca today. And valuations as well yes, we may have been cheap at some stage, yes, we may be cheaper in europe than the United States, but have valuations gone too far . With regard to valuation, there are two things i want to discuss. One is around the fact that we are in a low rate environment. Were in a cycle where terminal rate will be lower in comparison with previous cycles if youre a believer of discount cash model, if you discount with a lower rate you ought to support a higher multiple. If you compare evaluations now versus historical averages, its not like for like. One more thing, earnings, earnings have been coming through in europe, have been coming through in japan, in emerging market in the u. S. , which is a significant turnaround despite price going higher, earnings have been falling through. To add to that you dont think theres anything coming out from the Corporate Credit market or the volatility indicators that are saying were complacent that actuallyis a debate that divides a lot of opinions if you look the credit implied volatility its very low at the moment is it complacent or pointing to a benign macro environment in our view its the latter. Realized volatility has been tracing lower. It doesnt seem theres a huge amount of distortion im loathe to say things are benign and okay. If the market can have a wobble and almost fall out of bed on the back of cyprus a couple weeks ago, who are we to say bigger economies have more tensions in them and wont cause a problem. At the moment im looking at china. The story is that the regulators are worried about bank exposures. I look atthe overall debt, corporate debt levels, its not the absolute level that worried me but the acceleration in debt levels is there something that could come out of china or elsewhere that could set a wobble on markets . The high debt level is a concern for china. Credit is growing at a faster pace compared to gdp that level will go higher. However obviously the last couple of days we have seen regulators stepping up pressure and the equity market felt the pressure but the important thing to kind of put things into perspective with regards to china is that we have an easing on demand setup, which is that if they were to tighten, if markets dont react well to it, its foreseeable that they would ease and make sure the overall situation is not falling out of bed we have Important National Peoples Congress later this year, and going into that meeting, going into that conference, theres important things to look to. I hear you. Yet more developed capital markets, more developed democrat sis, more deposition r develvel have failed to control markets and asset values in the past so the chinese who are learning this, doing very well, have they got the tool kit to control the economy if, indeed, we do see a resumption of concerns from two years ago . If we think about the fx reserve we have, capital outflow decreased. So the pressure has eased to some extent. And with regards to if they have the tool kit, growth ultimately will be important in helping to address that very high debt level. And a lot of focus is around, okay, is it 6. 5 or 6 if you look at normminal growth that doubled from a couple years ago. So a few things that are happening, reform front an growth front so, i will go with you. I will say these things are fine, were not worried about china. Were comfortable with European Growth things seem all right in the United States. Why is there no inflation coming through in a meaningful fashion . You and i, youre making it in your notes, why will we worried about whether the phillips curve is broken and whether inflation will come back in a meaningful fashion . Thats the biggest conundrum of them all if you look at the Unemployment Rate in the u. S. Slightly above 4 and pressure is not following through in europe as well, the latest euro figures point to alltime high number of employment in euro area. Yet wage pressure is absent not only in germany but coming up from low base. So thats the question thats been also baffling, im sure, central bankers. Poor mr. Kuroda indeed. So our point of view phillips curve is probably not broken but very, very flat. It would take longer for unemployment levels and for the tightness of the labor market to finally push it push up the inflationary pressure. But the pace needs to be adjusted to take into consideration, structural factors, aging demographics, productivity and all the factors that characterize this we covered a lot of ground. Thank you very much for that nice to see you today. Wei li one factor that appears to be not ra probla problem for mas capital levels of u. S. Banks they have enough capital to trade during extreme economic recession. Under the fed scenarios, banks would suffer significant losses, but be Strong Enough to continue lending to households and businesses results from a second round of stress tests will be out next week this is the bit where they find out how much money they can spend. Well find out what the fed thinks about the banks plans to return capital to shareholders squawk box spoke to the senior credit analyst at hermes financial managers and asked if european banks were catching up with their u. S. Counterparts yurp europe is still much mo about cleaning up, italy and ireland and some banks in the uk as well. So to see an increasing dividend from european banks, say over the next year or so, it is still relatively uncertain i wouldnt put my money on a begin crease in dividend from european banks surprised at this move today. Ub banca down only 1 today. The ceo of this company and dozens of top executives could face trial over whether the bank obstructed regulators. Reuters reports that prosecutors have requested a trial a judge will decide whether to try the case theres also a probe related to possible irregularities in the way shareholders appointed the supervisory board. Ub banca says it was not aware of the prosecutors request. In november it denied wrong doing and said it has always cooperated with investors what do we know about ubi banca, its not at the top like uni credit and sao paolo, not at the bottom, so what is ub banca . Its the fifth largest which means it escapes the radar often. It is only worth in terms of market cap around about 4. 2 billion euros. What i found interesting is looking at the financial profile about this one and how the brokers love it, the fact is this Company Still only trades on a price to book of 0. 4. All right . This is one thats been buying assets, had a 400 million Capital Raising to buy some distressed assets of other banks. Its seemed safer, the brokers love it yet it trades at 0. 4 why . Thats a question for you guys out there. Its buying the assets of three smaller banks. Its been stunningly volatile. By range on the stock. Its had a 1. 80 to 3. 98 range over the last 52 weeks big volatility you can still get that in the italian banks. Coming up, fears that chinese regulators could come down on m a and spark a selloff, perhaps some of the biggest chinese dealmakers recovered why they recovered well fiend out after the short break. Busch. As crisp and cold as a mountain stream. It has the same great taste its always had. Even the same sound. [sfx buschhhhh] [sfx buschhhhh] hi itthats why at comcast,t to be connected 24 7. Were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Shares in some of chinas Largest Overseas dealmakers have rebounded today after a selloff. Wanda is one of the early listers of the wanda group Fosun Pharmaceuticals as well. This one owns club med and looking at hna as well whyors worried about financials corporate exposure regulators are asking the banks what is your exposure, what is the Systemic Risk, and warnings in the Corporate Bond market how much of a Systemic Risk do they pose . We talked to wei li about benign broader Corporate Bond spreads, but the chinese bond spreads have picked up in the last few days i want to take this story away from worries about these four companies and banks and say look at the broader news, look at the msci, much more focus on chinese stocks they want a clean bill of Health Across the board they do not want problems at these four big almost trophy companies, which have been buying International Assets what about capital flight these companies have been buying left, right and center, but the chinese are keen to keep more money at momenthome and not exp currency i will chuck in another angle as well there is a cleanup under xi of corruption across the board. Capital flight, corruption, concerns about the broader msci and how china looks internationally. These are all playing into the cleanup were seeing on the banks and their Balance Sheet and seeing what exposure they have got you can head online to read the full story on the web on cnbc about the chinese regulators crackdown on m a thats on cnbc right now we will take a short check out World Markets live, our blog which runs throughout the european trading day well be back after this welcome back to street signs. Im Steve Sedgwick these are your headlines its a good start says Angela Merkel of theresa mays plan to guarantee the rights for eu citizens living in britain, if the favor is returned by the continent. But Jeanclaude Juncker doesnt seem so convinced. I want to reassure all those eu citizens in the uk who made their lives and homes in the uk that no one will have to leave we wont be seeing families split apart. This is a fair and serious offer. Has theresa may stepped in the right direction . Its a step but the step is not sufficient the Irish Government hales the success of aibs ipo as a milestone, after the bank raises 3 billion euros in the euros biggest listing this year. Chinas csi index closes up over 3 despite the jitters around wanda and fosun amid reports chinas regulator warned of their Systemic Risk its a clean bill of health for americas banks. All major lenders passing the federal reserves latest stress test raising the prospect of a pick up in payouts to shareholders one year to the day since United Kingdom voted to leave the European Union the fallout from the vote triggered a dive in the price of sterling remember that day very well. A new Prime Minister came shortly after, after David Cameron went missing for at least 48 hours and a general election in which came the Opposition Labor Party did way better than many expected, and mrs. May did not get the mandate she was looking for from voters. Negotiations, of course, have begun. Prime minister may is now offers eu citizens living in the uk a settled status after five years. Alex grier has joined us, Research Officer at open europe. I would like to think ive been as critical as anyone over the British Governments ludicrous situation where they have not guaranteed these amazing people who are adding to the british diaspra rights, but shes done it now shes late but for jeanclaude junk tore lojuncker to look begrudgingly at it, i think that was rather bad. The Member States and Member States like germany will have a big role to play the commission and the chair take their brief from the Member States the thing to look at on this offer that theresa may made, its a serious offer she is effectively offering the same status as uk citizens theres a grace period as well a flexible kcutoff date. As long as the desire to have n work the serious players say it could work, including Angela Merkel do people like juncker not want the brits to come to the table with a pragmatic deal . They dont want a good deal for britain, they want a punitive deal this has been raised a lot whether they want punishment for Great Britain for leaving. I think youre getting to the essence of what the project is about here there are some the starry eyed amongst the european elites may think about that but most people are thinking about the welfare of european citizens, they recognize the value in a deal getting done your viewers will know enough about euro denominated trades going on in london and how important that is as a source of capital for european markets and businesses i dont think we can take seriously the idea people accident want to deal on this, the best way do this is have an offer on the table the conservatives in the dup and United Kingdom dont have that deal yet that talks about the skill of Northern Ireland negotiators. Theyve had long enough to become good at that thing. This idea about the border, and i think mrs. Merkel talked about this as a key issue, everybody wants an open border between the republic and indeed Northern Ireland. It would be nonsensical looking at the Historical Context not to get that w does therwhy does there appear b a barrier to getting that. I think we have to remember the common travel area existed between the north and south in ireland for a long time predating even the existence of the eu so theres a lot of will on all sides to make this happen. But its really about the detail to my mind, if you can make this work in the case of ireland, i dont see anything other than political will obstructing this happening. So you sound encouraging, or encouraged by everything at the start. Lets hope thats the vain that carries on we have this chronology that barnier asked for, the british said no and now theyre saying yes. The exit bill or the division of the assets as well, its not just liabilities mr. Davis has been making some encouraging noise about that how big a Sticking Point is that i think it is a 60 billion, or 80 billion bill or no bill theres questions about the bill itself. The initial position set up by Michel Barnier there would be no parallel talks whatsoever. The fact that were seeing significant progress on rights, we will Start Talking about a trade bill it is an encouraging sign. On the bill itself, the talks will really focus on the method of calculation of what that bill is rather than a specific figure the idea that this will be an uncontestable bill is not controversial. Im genuinely encouraged by talking to someone about this. What is the biggest negative, do you think that could scuttle this, dent your optimist about Real Progress being made events. Theres political will in the serious places around europe to make things happen i think the fundamentals of brexit are on track. So we should be all right. All right what a joy to end fridays programming for me on a positive note nice thank you very much for joining us alex grier from open europe. Four arab countries behind a boycott of qatar over alleged links s ts to terrorism have gt 13 demands which they say will end the diplomatic crisis. It includes the closing of al jazeera television, reduced relations with iran and cutting ties with groups also the closing of a Turkish Military base in ka paqatar. Many people i was talking to say this will go away. Sense will prevail therepragmatism, but asking them to close down al jazeera enormous the links to islamist groups, we can understand, but the other . Interesting. Senate republicans revealed their Healthcare Plan state side, it includes large cuts to medicaid and a defunding of the planned parenthood organization. United health was the biggest gainer with the healthcare select etf hitting an intraday high earlier in the session. Casey hunt has the details on a bill written in the shadows. Reporter wheelchairbound protesters. Save our liberty. Reporter 43 arrested and dragged from a Senate Office building. I worked all my life with my disability, but im not rich enough to keep my daughter alive without medicaid reporter all happening just as the draft of the gop plan to repeal and replace obamacare was finally made public this morning. The draft senate bill would repeal the mandate to buy insurance but keeps protections for people with preexisting conditions and creates a new fund to support the individual Insurance Market it keeps the expansion of medicaid through 2020 but then phases it out. It also ties medicaid funding to inflation, which means a dramatic reduction over time fewer people will qualify for tax credits to help them buy insurance, but the senate provisions are more generous than the house version and it defunds planned parenthood these cuts are blood money. People will die. Lets be very clear. Senate republicans are paying for tax cuts for the wealthy with american lives. Reporter the bill, written in secret to try and get 50 of 52 republicans to vote yes three nos and the bill will fail within an hour of its release, cause for concern. At this point from what ive been able to see so far, it looks like were keeping obamacare and not repealing it reporter republicans want to have a vote next week. This is not like fine wine. It doesnt get better over time. Reporter by this afternoon four conservative senators publicly oppose the draft. Together thats enough to take down this bill the intention is not to take down the bill. The intention is to make the bill better. Reporter their version of better at odds with moderates who worry the cuts are still too deep ill do my best to push back as hard as theyre going to push on their side. Reporter for a president who said he wanted more heart and promised he wouldnt cut medicaid this bill covers fewer people, charges them more for the coverage theyre going to get and gives them a poorer product for that coverage. President trump has been tweeting, yeah, about tapes again. The president used his personal twitter account to say he has no recordings of his conversations with former fbi director james comey. Trump, of course, had previously raised the possibility of tapes before comeys testimony about their encounters the korean central news agency, its about the tragedy around mr. Otto warmbier, who passed away on his return to the United States. This is what north korea says. It had given medical treatment to Otto Warmbier and brought him back alive after his heart nearly stopped it said it was the biggest victim of the warmbier incident. That is not true surely it was mr. Warmbier itself it says the death to warmbier after the return to the u. S. Is a mystery. That he died from torture and beating is groundless. Okay lets move on. Lets look at the u. S. Futures and where theyre currently trading. Mixed performance. Mixed last night as well futures change looking mildly higher at the start of u. S. Trading. Well look at european markets as well. They were down a bit at the top of the show. Come back a bit. The ftse 100 just a couple points higher than the lows of the session. A quick look at the Foreign Exchange the euro making a bit of ground. The Service Sector was weak. Elsewhere, cable, we have 1. 27 handle again amazing what 24 hours makes. Concern on how the british economy was going and rates. Now that mrs. May has seen some positive noises on her response from merkel, so thats positive. Pound trading 1. 2730. U. S. Banks breathe a sigh of relief after passing the first part of a federaissee rel hrers test more after the break weve looked at chinese banks, a couple of european ones u. S. Banks have enough capital to continue trading and lending in an economic downturn. Its the first hurdle in the annual twopart testing. The result means americas largest banks have the capital to keep trading and lending during an extreme downturn that downturn is including a 10 Unemployment Rate, over doubling of that. They would lose about 383 u. S. Billion dollars in that but have the capital, especially the big guns under the fed scenarios, banks would suffer significant losses, but importantly, this is key, stay Strong Enough to lend banks could potentially increase dividend payouts if the fed approves their plans to the stress test. That is out next week. Change may come to the stress test process if republican proposals pass through Congress President trump has said he wants to do wait for it a very major hair cut a very major hair cut on doddfrank on april 4th. Some republican plans include allowing banks to run their own stress test each year. The fed testing would happen every other year Goldman Sachs was the biggest loser on the dow thursday dragging down the Financial Sector over a half percent the president and cocoo of the bank, Harvey Schwartz spoke to us when you look at the treasury report, its straightforward, quite sensible and, look, before the crisis there wasnt enough regulation now theres been a lot of regulation the real question is has the pendulum swung too far how can we calibrate so that it better supports economic growth. If only you could have somebody in the white house that could make the case for goldman. Do you you go decades back with gary cohn but its early days for the administration clearly they had challenges. From a market perspective expectations were very high. They cooled off a bit. And, you know, over the next six to nine months, what our clients are focused on is whether or not the growth enishtive initiative policy come together we were talking to dic dick bovane, talking about the glasssteagall, if that happened goldman shares would double because the Competitive Landscape favors you guys. Is that true that that kind of if we were to go back to the future in that sense that even if its a 21st Century Glasssteagall, whatever that means . Right i dont know what 21st Century Glass steagall means thats not something we would think would help us best serve our clients. Remember, glass steagall, thats late 90s. The firm went public in the late 90s were a vastly different organization, more global, more capital demands from our clients. As you mention, were now in online lending with consumers. Right. So i think the nature the services and the nature of the things our clients want globally from Financial Services require large banks. Lets hear the Vice President of Equity Research from ralphity capital markets. Dick, good to hear from you today. In terms of what you make from the stress tests, good and the bad, your First Impressions on that obviously it shows the american banks are not having difficulties at the moment it indicates they can generate staggering amounts of capital over relatively short periods because think about where they were in 2007 to where they are today and the fact is that they have grown hundreds of millions of dollars of capital. What im interested in is what does it show me as to what stocks i should be buying now and which ones i should be avoiding the stress test is saying companies heavily involved in the credit card business haved most risks in an adverse scenario Companies Trading with counterparties have staggering risks in adverse scenarios companies that tend to have relatively low loan to deposit ratios have minimal risk in adverse scenarios. What does that say it says that Credit Card Companies like discover and capital one should sell at fairly significant discounts to other banks. It says that Goldman Sachs and Morgan Stanley should sell at significant discounts. It says that bny melon, state street and Northern Trust are banks which perhaps are undervalued relative to what would happen to them in an adverse scenario i suppose thats why they get 20 Interest Rates on their credit cards because they have that extra risk. Thats baked in. You mentioned the key point which ive been going on about for a long time, they can make staggering amounts of capital, they can make as many loans as they want. The profits from the banks in the First Quarter were stunning. Why are they such strong advocates of change on the regulatory fund, change on the stress test when things are going so well at the moment . Why change it . Thats an excellent question. If you think about the american econo economy, you cant say the regulatory restrictions placed on the industry starved any sector of the u. S. Economy for funding. That didnt happen if you look at earnings in this fiveyear period they went up every year earnings of the American Banking industry, you know, were at alltime record levels in 2014, 2015 and 2016. Theyre not going down this year so its hard to detect how these companies have been harmed or how the u. S. Economy has been harmed as a result of stress testing. What is more fascinating is these companies dont know what to do with the capital they have citigroup is sitting here with this huge amount of what they call excess capital, what i call asset deficit, they dont know what to do with the money. They have no vision. They have no fought chore outlook which says this is what is going to be happening in this industry five years from now this is how much capital well have this is how well deploy it to grow earnings. So you have kind of a mess in terms of trying to figure out what these companies are, what theyre doing, where theyre going. That keeps the multiples on these stocks relatively low. Im a former prop trader myself, it was great fun in the 90s, i dont know if i created economic benefit for the economic kingdom by doing that activity whats the argument for rolling back on volcker and letting banks trade again . I dont think the banks would argue they want to do prop trading as much. The reason for trying to roll back volcker is more bureaucratic than economic or financial. So the banks have to report to fooef differe five different agencies on virtually every trade they do, which is an enormous bureaucratic nightmare because it requires thousands of literally thousands of people to provide the information that these five agencies want so the argument is not let banks go out and trade however they want, whenever they want, the argument is take one agency, take a limited set of data that we are looking for, and evaluate volcker on that basis. A lot of the stuff which is being proposed here is not because its going to create tremendous increase in Bank Earnings but increase running a bank. What about the oil sector. We have the oil price coming off aggressively how about the exposure of the banks to Falling Oil Prices compared to 2014 see, this is another big point. In other words, oil is not going to cause major destabilization in the banking industry. We had 2014 period through 2015 in which out prices collapsed and banks took significant writeoffs against what they had in oil they reduced their lending to the industry they changed the nature of the loans they were making to the industry more collateral. They changed the duration of the loans. They changed the rates on the loans. It didnt destabilize the banks in 2015 when oil prices were collapsing banks had alltime record earnings in that year. This time theres less exposure to less destabilizing but nobody beliefs it. Believes it. Dick bove, thank you very much today marks the lovely anniversary of the brexit vote what a year, and our cfo Council Members are feeling better about how it will turn out 30 of them say now theyre more optimistic about the outcome 23 are saying theyre more pessimistic. 31 have not changed their opinion. Thats the end of street signs. Thank you very much for putting up with me this week carolin roth will be back in the chair next week. Ill be back on squawk box. Have a great weekend markets now, stocks pointing to a higher open on wall street as traders gear up for the weekend. Clean up in aisle four Bed Bath Beyond shares down following an earnings miss. And happy birthday brexit. Were taking a walk down memory lane, one year to the day since the uk voted to leave the eur e European Union its friday, june 23, 2017 Worldwide Exchange begins now
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