For thanksgiving. Good morning, everyone. Welcome to bloomberg surveillance. I am Francine Lacqua here in london. The markets are little bit on the move. On the one hand, we have a vaccine and encouraging news from the pharmaceutical companies. I am looking forward to catching up with the roche chief executive on the treatment out there. On the other hand, we get infections rising in the latest one from the cdc, saying lees try not to travel for tryksgiving please not to travel for thanksgiving. U. S. Futures are actually down. The dollar edging up somewhat. If you look at, you know, health and industrial shares, they seem to be rallying here in the u. K. , and i want to show you yields on the spanish bond. I think we will have that board shortly, so we will bring you that, but you can see in general, it is a twoway system for what the market is looking at. Now lets get to the bloomberg first word news in london with leighann gerrans. Hi, leighann. Leighann hi, francine. Over in georgia, a decisive lead over President Trump. Refusingdent is still to concede the election. Biden is heading back, saying trumps efforts to overturn the results are outrageous. The Eu Recovery Fund could amount to 140 billion euros. The economy minister says they governments will absolutely cap everything available to help the economy, one of the worst hit in europe. I hope there is no delay. S are strongly committed for everything available, the European Parliament i know is also very much engaged, so we kamaron a solution. So january 1 continues to be our target date. Joehann president elect bidens promising no National Lockdown when he takes over in january, but regional restrictions are spreading across the u. S. California is imposing a curfew but stopping short of a full shutdown. 34l hit about 30s million people, 94 of the states population. Global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. I am leighann gerrans. This is bloomberg. Francine . Francine leighann, thank you so much. Now lets get straight to one of our top stories, and the u. S. Treasury is moving to an federal emergency lending programs, sparking a rare public rift with the Federal Reserve. With get more on this bloombergs and a karen. Enda curran. Enda, it is pretty rare to see things like this. Enda it is coming at a crucial time, as you said, francine. The global scene has been through the Central Banks and finance ministries, and that we have the worlds biggest economy, that the fed and the treasury are starting to ways, like you mentioned. Mr. Mnuchin, the treasury secretary, once some of the money back. He says the markets are no longer at risk of seizing up, and of course these were facilities that were designed to ease strain and Corporate Credit markets earlier during the crisis. The fed, for their part, saying parts of the economy will need this money. The backdrop, francine, there is still no fiscal stimulus agreement in the u. S. , and we know that the coronavirus continues to spread, so when you add all of these dynamics together, it as up to a fairly nervous nearterm outlook for the worlds biggest economy and of course for the rest of the Global Recovery, too. Is it reallya, why affecting the markets like this . This i think the fact that disagreement was unexpected and came out of left field was certainly a concern, markets are wondering what is going on here, why are the two arms of the government converging at such a delicate time. G20 out overnight warning of a risk of a slowdown in the Global Recovery because the virus continues to spread, and dont forget, as i mentioned earlier, there is still no agreement on fiscal spending in the u. S. So i think it will all add up on more pressure on the fed to do something when they meet in a few weeks time, in december. In the near term, it certainly does not bode well for the fed or the treasury at a fairly critical juncture for the economy. Francine this also comes, of course, during the president ial transition. How much of this is political . Enda i think this is gaining a lot more attention now globally, because there is a feeling that u. S. Domestic all is the is going to the out, but now it seems play out, but now it seems we have an unusual transition going on. President elect biden did signal he has someone in mind nominated treasury next secretary. We may get an announcement around thanksgiving. I think that will be crucial for global markets. They are waiting to see what kind of personality it will become a what kind of policy check will this person pursue, and what kind of relation will they have with the fed, for example, so i lot will be writing on who president elect joe biden will pick, which will set the tone for the u. S. Economy recovery story. And it has spillover consequence is the Global Recovery, too. Francine thank you so much from our end a karen th enda curran, with the latest. Francine lagarde gave Christine Lagarde gave a keynote speech. Yesterday, she was talking to parliament and fielding questions she says decisive policy actions are needed to sustain growth. I would point everyone, of course, through her really great speech she gave 10 days ago, where she linked stimulus or fiscal policy with monetary policy, and that could be a game changer for other Central Banks as well. Coming up, an exclusive conversation with the roche chief executive, severin schwan. That is coming up next, and this is bloomberg. Yes, we have had some good news and some bad news and a chance to overcome the Health Crisis, but we are not there yet. It is not a silver bullet. What we need, as we need surveillance to be stronger, we need measures, because you got to know we are at the beginning, this is your best weapon, if you use it well. Next sixews is the months and then Northern Hemisphere will be very tough. The good news is both the vaccines and the therapeutics, in particular the antibodies, are coming along and will start to bring that number way down. Francine talk there from some of the chief global figures confronting the spread of covid at the Bloomberg New economy forum. Now, recent breakthroughs from pfizer, but are not, and astrazeneca. A second treatment for covid19 is also critical. Has completed early tests of its ability to produce large quantities used on President Trump with a rollout set early next year. Exclusive now for an roche chief is the executive officer, severin schwan. The news overnight, the big news, that the w. H. O. Recommended against using remdesivir. What does that mean for greater treatment with regeneron, which you make . Thatchwan we believe antibody cocktails will play a againstle in the fight really thend antibodyk with cocktails is the scala, manufacturing. Monochrome all antibodies are difficult to produce. It is not easy to scale them up, so that will be the real bottleneck. They are working hard to ramp up production as fast as we can. The latest news on remdesivir change the outlook for regeneron . Dr. Schwan i think, no matter what, irrespective of other potential therapeutics, the for antibody cocktails will far outstrip the potential supply, so we have to make sure that we target really the right patient groups with that kind of medicine, patients at risk, critical people in the health care sector, but we cannot provide such a medicine broadly, for broad parts of the population. Saidine you have always that of course treatments are essential, even whilst looking for a vaccine. We are still close to having something workable with a vaccine with moderna, pfizer. Doesnt it actually change your . Alculus on treatment for covid dr. Schwan i mean, first of all, it is really good news that these newly developed vaccines seem to be very effective, so they will, no doubt, play a major role to get this pandemic under control, but vaccines will never be a 100 solution. We know that from other infectious diseases. We know that from flu, for example, and therefore there will be continued need for other therapeutics, antivirals, and also testing. Francine how quickly could we see the fda approve regeneron . We are expecting a possibly this week or next week. Could it come today . Dr. Schwan yes. Rather regeneron has filed for emergency authorization, so that could happen very soon, but really i would have to defer you to the fda. As the fdas decision, but we have filed for emergency authorization. Francine so once it is actually approved, how quickly could you start delivering it . Are first there deliveries possible by regeneron, as an ongoing tech transfer from regeneron to roche. That is well on track, so at roche, we will be able to supply in the first quarter. N, all of the supply, combined suppliers, which roche and regeneron will be limited, we are talking to million doses here, so we need to make sure medicines valuable are really reserved for patients at high risk. Francine how much will you be able, though, to scale up next year . Dr. Schwan we have indicated that the combined capacity we can provide for next year is about 2 million doses. That assumes 2. 4 grams per dose. And that is already stretching the capacity is now. Over the longerterm, of course we are working to further increase capacities, but this is our best estimate for the time being. Schwan, what does a Biden Administration mean for roche and Drug Companies . Well, we have worked together with both parties in the United States over the last decade, and what we have seen is that the United States as a country which values rewardson, which innovation. Also with the new administration, i am very confident that the u. S. Will remain a country which embraces an innovative, vibrant life science industry and will make sure that those innovations actually find their way to the patient. Schwan, given the treatments available, given the vaccines that, you know, may soon be available, is this a turning point for the Health Care Industry . We keep on talking about, you know, this being the last big industry that has yet to be really disrupted from outsiders. Does it show that big pharma is alive and well . Dr. Schwan certainly what we see, and i would go beyond pharma even, also if you look at the diagnostics industry, i think what society has recognized these days in particular is what a vital role the private sector plays to get this ca pandemic under control. If you look at what has already been made in record times, you now see vaccines come into the market, literally, you know, years before we would have ever thought it was possible, then it becomes evident what an Important Role the industry helps and i think that the standing of the industry in the broader public, and that is a good thing to see. Francine mr. Schwan, what have you learned . What do you think we all collectively have learned . Government, you know, public, but also chief executives of how to deal better with the next pandemic, and how soon could the next pandemic hit us . Dr. Schwan i have been in particular impressed about the level of collaboration which we have seen among all the stakeholders. This is really unprecedented. If you would have asked me a year ago, i would never have believed this level of collaboration possible. And what you see here is a collaboration on two fronts. We have seen the industry, we talked about the collaboration, for example, between regeneron leveraged where we our manufacturing capacities. Under normal circumstances, i do not think this would have been possible, so that is a great learning and lots of lessons of how we can Work Together in the future. The other element is the collaboration between the industry and regulators. I mean, this is really incredible how well this is working and how responsive regulators are to bring the true innovations quickly to patients. And again, there are learnings for the future. Mr. Schwan, i know you are also an independent board member for credit suisse, and you are leading the search for a new chairman or chairwoman. Are you down to the final candidate now . Beenchwan um, it has announced that the current april ofwill retire in next year, and what i can confirm and share with you is that the succession is well on track, but i would not be specific on timelines. Is there a specific something that you are looking for in the next chairman . Does it have to be an outsider, a banker, and insider . What is your thinking . Dr. Schwan i will not comment on the specifics, but rest assured, we will make sure there is a great successor to lead the banks going forward, after the current chairman has retired. Francine thank you so much for your time today, and of course good luck with all of your endeavors. Roche chief executive severin schwan. Be onn schwan will also leaders with lacqua, and we had a great conversation on leadership and what is needed to make a difference. Up, our exclusive conversation with bungle send beir bunko satin dare anco santanders ana botin. This is bloomberg. In. This is bloomberg. David francine this is bloomberg surveillance. I am Francine Lacqua here in london. Lets get straight to the Bloomberg Business flash, heres leighann gerrans. Hi, leighann. Leighann good morning francine. ,the eu could approve a vaccine from biontech and moderna next month at the same time as the u. S. Leyen said the European Medicines Agency is in regular contact with the u. S. Fda to synchronize the approval. Ms. Von der leyen if all proceeds with no problem, that tells us that the conditional marketing authorization for biontech and moderna could happen as early as the second half of december 2020. Leighann the World Health Organization is recommending against using Gileads Remdesivir to treat covid19 patients. The advice comes just weeks after regulators granted approval. Says there is currently no evidence that the antiviral improves survival rates. Gilead says it is disappointed and the guidelines do ignore the science. Tesla is leading gains in ev stocks, hitting another record high. The latest vote of confidence is coming from the u. K. It is now looking at growing its fleet of electric cars as a way to create jobs and balance the power grid. Companies in the sector have been confident electric cars will dominate the future of the market. And that is your Bloomberg Business flash. Francine . Francine leighann, thank you so much. Now, coming up, we speak to the banko scented air chair, ana santander chair, ana botin, and we will talk about m a. The markets are concerned about the risks, the public dispute between treasury, and the Federal Reserve over a public pandemic program. This is bloomberg. C program. This is bloomberg. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. There is a lot going on. We have an exclusive conversation with ana botin shortly. Now lets get to first word news with leighann gerrans. Leighann the u. S. Government is moving to end several emergency lending programs at the Federal Reserve. Toven mnuchin has written fed chairman Jerome Powell asking for unused money to be returned when the programs expire. In a rare public risk, the central and a rare public rift, the central bank is pushing back, watching to use the money to support the economy. You leaders are stepping up preparations for a brexit. Sources tell bloomberg that Emmanuel Macron and his belgian counterparts are calling on colleagues to make contingency plans in case the talks fall through. Facetoface discussions are suspended after a member of the e. U. Team tested positive for coronavirus. The Global Economy are warning the recovery is at risk as coronavirus continues to spread. The International Monetary fund and g20 are sounding the alarm ahead of the virtual summit, which is happening this weekend, hosted by saudi arabia. The imf says elevated asset prices are pointing to disconnect from the real economy and a potential threat to financial stability. Global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more im 120 countries, leighann gerrans. This is bloomberg. Francine . Youcine leighann, thank so much. Our question to next, where next for spains biggest bank . Santander has remained spe conspicuously on the sideline. Merger talks were announced. With policymakers throughout europe advocating further industry consolidation, will santander continue to defy the trend . Im pleased to welcome for an exclusive conversation, ana botin, chair of santander. Botin, as always, a great pleasure to have you on the program. Thank you so much for taking the time. There is a wave of consolidation in spain. Do you ever feel like you are not taking advantage of these low valuations . Were you ever tempted to try and buy something . Ana hi, francine. Its great to be with you. I have said many times that we are thinking the same and that is where we are comfortable with our scale. We are comfortable with our capacity to invest, so we are not contemplating participating in europe or spain. Have a lot of organic potential. Relationship with customers, and as you know, we announced a , a europeanange operating model. With regional management across spain, u. K. , portugal. Byre is growth across europe helping focus on customers needs. Importantly, this is about capturing new growth in all the business areas. We haveen announced some opposition, so that is going to be the focus from here on. Francine you will have gone largest bank in spain to the largest bank, if everything goes through, and if everything goes ahead. How important is it to be dominant in the market . In spain is not as important as the fact that we are with 20 market share. We are not a spanish bank, we are a global bank. Leveragey allows us to that across our platform. So this is a key for us now. It is not a spanish bank, it is equable bank. We have 145 million customers. It is a global bank. We have 145 million customers. This is the key change from a few years ago. We are working on our Global Payments platform as a platform for all of our banks will deliver on a scale, at the level of the second or third in the u. S. This is a key, a change in paradigm, and we are going to need that. Francine i want to come back to the u. S. In a second, but overall, if you look at the digital bank, which is where you want to grow, you want to work digitally. Can you make as much revenue in this platform as a more Traditional Bank . Ourselves, and santander has a very good mission, to help people with with todays new technologies, technologies complied with our Balance Sheet combined with our Balance Sheet, allows us to deliver on that scale. Sales, all of all products across the group in digital. So this is super important, combined with the earnings, we can cover that if you want. We have been delivering one billion euros per day during the pandemic. Without technology, investments we have made in the last five years with other strong Balance Sheets, it would not have impossible. Francine does it make sense to follow bbva and sell your u. S. Unit . Ana first of all, i want to say that in the u. S. , because we are beginning to leverage our global scale, but also because of the businesses we have in the u. S. , we are in a different scheme. There are three very important points in the u. S. First, it remains one of santanders most attractive markets. It is one third of the banking market. We have a strong track record, so we have seen improving , risingy in the u. S. Profits from 2017 to 2019, prepandemic, so it is actually above the cost of equity. The third is that we continue to build on this success and we are in targets byvest 2023. This is really important because with diversification, as of october, we were at the same level of profits and dollars as of last year, and what has been a very difficult year. And we will now leverage our technology and looking at how open banks help change the paradigm. Where we haves more work to do. Francine strategically, the u. S. Is a good buffer, or is it something more, to santander . Businesses for santander is about 17 of our capital. It delivers, again, a good return, and we have committed to above the cost of equity by 2020 three. Importantly, it is built into our Investment Bank across the business r auto we are the fifthlargest auto lender in the u. S. And with midsized companies, leveraging on the global santander network. What we need to know execute, and this is something we are not any that we were unable to do, we want to run in the u. S. On a different paradigm, bringing in technology as part of the Santander Technology platform. Does europe need a bank like has been suggested . Ana there have been many different approaches. We actually have not seen losses, even though we have been proficient in our Balance Sheets. Those losses will come in 2021, 2022. It is very difficult to know. My view in terms of the macro is that compared to a few weeks ago, the world looks much better. What is important for investors, also important for our customers is to have some visibility as to when the pandemic is going to end. Year, that isext a reasonable date to expect some kind of return to normality. This is very important in terms of long losses because it gives do i close,aying, do i stay open, do i invest . 6, 8 months more, it is very different. I do think we are in a better place, much better place than a month ago. My view is that the economy in 2021 would surprise to the upside. Francine overall, regulators, some regular leaders are worried that there is not enough bad loan provisions and defaults can typically happen with a laggard. How comfortable are you that you have enough put to one side if there is a big wave of default coming . Ana what we have now is much higher visibility. Thirds of our. Oratoria have expired in countries like mexico, almost 100 have expired, so we know what comes in terms of loan loss provisions. We have added a significant since in september september. We had a better rate of cost in september than we did engine i and we did in july. Then we did in july. We are able now to have some realistic numbers in our model. In the case of santander, we could double the provisions. The provisions we have made for covid, and still have a profit. If we go beyond that, we have 18 billion euros more of profit. Orry, of buffers this is more the case with many banks across europe this is not the case with many banks across europe and the u. S. The scenarios that we had a few months ago are now not realistic. Francine ana botin, thank you so much. We continue the conversation with ana botin shortly. This is the picture overall for the markets. My guess they are a little bit under cited, but they look really at the u. S. I had not seen this for at least a couple of decades, between the fed and the treasury of the u. S. We will have a look at what that means for the markets. Coming up later, what will a Biden White House and Global Economic rebound mean for banking . We will continue our conversation with ana botin of santander. This is bloomberg. Francine this is bloomberg surveillance. We were having a great conversation with ana botin from santander. Lets go back to ana botin and continue our conversation. When you look at some of the things out there, people say it is difficult for banks to get more support from governments. Is there something to be said about this being a difficult proposition . All, banks did not economy got support from governments because this is a Health Crisis because it is the governments response ability to take care of us. Second, we must find a balance bankseing prudent have huge buffers. I gave a big number before emma ,8 billion euros for buffers and we need to balance that with a support for the economy and being able to raise capital. I think the decision for dividends is understandable. We might not agree but we understand it. We knew a lot less about the virus months ago and its consequences. We had much higher visibility. As the outlook improves, we need account ashat banks investable again. Ensuring that there is a supply of new capital, providing a Balance Sheet strategy that we do, to pay dividends, but also performing a primary function, which is supporting our customers. Francine do you think the band will be lifted next month . Ana im sure you know more about that than i do, but everything we hear is that they will be reviewing at the end of this year, so sometime in december, but there is nothing certain yet. Francine talk to me a little bit, ana botin, about what you are expecting for 2021. How confident should we be about a vaccine . Much will that help business . What does it mean for Government Support for furlough schemes . That is what i was suggesting not support to the bank, but trying to keep the economy going. Will we have a new social contract . Ana on the vaccine, it is too early to declare victory, but we base our internal models come oec bsiness plan, imf and forecasts, which anticipate a recovery in 2021. But we certainly support recovery expectations. We must remain focused on what we can control. Supporting our customers and communities. In terms of what it means for us, i think there are two things. I would say the strategic structure is how do we build a new sustainable and inclusive social contract, bringing together public and private sectors. A regulation move. One of the biggest investors and banks according to data, financial companies, banks in europe are paying 40 of corporate tax. Where having to restructure because obviously competition is very high. 50 of our customers are products online, so we need to keep focusing on what it is we can do in the private sector, and it would be great if we could contribute with other governments to really rethink what the world of the future, what the europe of the future looks like. The second thing and i have heard this a few minutes ago on bloomberg about the u. S. And secretary mnuchin, what they are saying about what the u. S. Thinks about fiscal support. I think the government has to support people in business. This is a Health Crisis, it is governments responsibility. Wetrong support now need to continue helping for the next six, eight months, people as more businesses, and this is crucial. Yeahss the second thing . Francine no, continue. The second thing from the pandemic that we have all learned is what we expect from the country and the rest of the world. This is the case with the virus over the past few must, but it also affect how we think about sustainability. That is a lasting effect of this pending m pandemic. Francine thank you so much for joining us. Always a great conversation with ana botin, the chair of santander. We cover topics from banking dividends to the industry. We will have more from the markets and also more on this very political and open rift between the fed and secretary mnuchin. That is coming up shortly, and this is bloomberg. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Is quite a lot going on in the markets. There is also a focus on m a and the future of private equity. European private equity deal making drops to a fiveyear low in the first half of the year. General m a activity dropped to roughly 30 . By delighted to be joined simona mylar Simona Maellare maellare. M the last week has been very encouraging. With a deal being announced. There is definitely a need for m a, and i think with the data need it to beu for a major strategy position. So we think 2021 is going to be a very good year. With theto uncertainty about the vaccine francine what would be a catalyst for this to change, for the floodgates to open . Simona i think you need a bit of stability. As far as europe is concerned, is covid behind us . Are we going to go into another lockdown in january and february . I think we need to figure out where we are. I think in the u. S. , the outcome of the election is already eliminated uncertainty, and there will be more productivity in the markets in the u. S. And in europe. But this is where we have good news but not delivered yet, it becomes widely venable across the world, and as soon as we manage covid, i think boardrooms will be more confident to start investing again. Where do you see the industries . If you look at some of the main drivers, how much will it be esg, how much will it be a push for digitization . Simona what we have seen actually is that a lot of the m a has been in sectors which have been relatively covid resistant, technology and the Technology Space in general. But when you think about the businesses we all deal with, we have what we call growth value business, but we also have businesses which might not survive in the current format, and then that needs to be solved. So i think every ceo will have to look really hard at their whichlio and figure out should be growing and which ones should be let go. And digitization will be a major driver. Accelerated the awareness and the need for the asitalized very quickly, and you mentioned, esg there is a big push. It is not now nice to have. I think being esg compliant will higher and to accelerate the esg much,ne thank you so Simona Maellare. Coming up, more bloomberg surveillance. Businesses today are looking to tomorrow. Adapting. Innovating. Setting the course. But new ways of working demand a new type of network. One thats more than just fast. You need flexibility to work from anywhere. And manage from everywhere. Advanced technology. With serious security. And reliable coverage, nationwide. Forwardthinking enterprises, deserve forwardthinking solutions. And thats what we deliver. So bounce forward, with comcast business. Francine division at the top. U. S. Futures slide amid a rare clash between the treasury and the Federal Reserve. Steve mnuchin calls for the return of emergency funds. Powell pushes back. Biden rips trump. The president elect decries the administrations lack of cooperation on the transition. This as a georgia recount confirms bidens victory. Biden says hell name his treasury secretary soon. And restrictions ramp up. California imposes a latenight curfew amid the spread of coronavirus. The cdc says it doesnt travel the cdc says dont travel for thanksgiving. Good morning and welcome to bloomberg surveillance. Im Francine Lacqua in london. Tom keene is in new york. A good amount of time will be spent on what is happening in the u. S. , this pretty public rift between treasury, the u. S. Treasury and the Federal Reserve. The focus is also in europe on negotiations on brexit, ongoing after some parts of the negotiations are temporarily