Hello and welcome to countdown. I am mark barton. I am anna edwards. And i am manus cranny. 20 of news on the banking sector. The regulator in the u. S. The first to break its cover on this given the details of who they are going to be finding. They have ordered five banks to pay more than 1. 4 billion in an fx probe. Citibank, hsbc, jpmorgan, rbs, and ubs will pay a fine. Not said anything about any conversation they may or may not have had with barclays on this. The banks have said they will cease and desist for further violations, according to the cftc. Some fx traders and banks court knitted coordinated their trading with others. Banks failed to assess risk with cftc is goingthe into detail and word from the u. K. As well. We have got to figure the figure is 1. 1 billion pounds. Before the release a few minutes ago, analysts said that the six , barclays, citigroup, hsbc, royal bank of scotland, ubs, barclays has not been mentioned today. That the fines would total 1. 5 billion. If it is the six, it is less than the figure. Ust to put it in Perspective Agency ins the first 2003 to say it was looking at whether the 5 trillion a day currency market was being manipulated. And then investigations on three allegationsproving that dealers at the worlds biggest banks traded ahead of clients and colluded to reach benchmarks used by pension funds, Money Managers to determine what they pay. Fca got the ball rolling. Thesehave had conversations on a number of occasions, how much you are provisioning for the Foreign Exchange manipulation. Interesting that they cannot actually find the bank, but they can charge a portion of profit they may have earned. They levied ubs. Have fullying they provisioned for these charges. Both of those figures have come ma. On cftc and fin the overall number is 3. 2 billion. Add to that the amounts we are hearing from finma, which cannot because fines because of a slightly differently the regulations work. For the sector as a whole, it looks like the banks set aside provisions to cover it. The fines vary per bank. , we have got to wait and see of course. The original estimate was around 5 billion. This is where you begin to get into the idea citigroup are the number one. Followed by deutsche bank, barclays, in terms of priority of fines. The other dynamic is this ubs, we understand, has extended their immunity with the department of justice through 2015. They were the first to go forward to the European Commission to actually give information. They have reached this settlement. 134 million swiss francs and 290 million to the cftc. File u. S. Prosecutors charges against individuals . That is the big question Going Forward. That could happen. The Justice Department could , according toeas one person familiar with the matter. It is interesting to compare how regulators dealt with this. An article out of bloomberg says these are bigger penalties and are coming more quickly in a more coordinated fashion than we have seen. Some of them have spoken about how they wanted to do things differently over these fx probes. We will continue to update everyone on this story. Ubs come up for today, they had the single biggest fine on record, 160 Million Pounds back in 2012. Enough of Foreign Exchange for the moment. I am sure we will talk about it right throughout the morning. The apec summit ended yesterday but the deals are still being done. The u. S. And china agreed on carbon cuts for climate change. Months of quiet negotiations between the countries. Stephen engle is our man in beijing. Give us more on this deal. Just how historic is it . I mean, it is fairly historic as well. Any kind of global possible pact that we may get impacts the eurozone years from now. These are the worlds two largest polluters coming together with a deal. When we get this kind of country heads of deal, that is what is interesting. Obama and xi wrapping of their summit by announcing this both sideseal with pledging deeper cuts in carbon emissions. For the first time, as is what is in store this is what is targetc china set a at capping emissions. The u. S. Also setting a new, lower target to cut Greenhouse Gases emissions below 2005 levels by 2005. Their current target is 17 2020. 2005 levels by so they have increased that. A deal that has been nine months in the making. The two biggest polluters in the accounting for more than one third of Greenhouse Gas emissions. President obama says it is ambitious but a major milestone in time for china. Xi said the joint press conference, chinau. S. Relations have reached a new, historic point. He used the word historic. Give us a sense of where else are obama and xi being portrayed as being eytoeye. There are still fundamental agreements in the backdrop of putting them together. Absolutely. They do not have a great track record of having warm relations. They had that california retreat that was not received that well, according to those who witnessed it. The last time obama was here in china was 2009. His first year in office. It was not seen like a lot of victories from that one. There was some uncertainty among the gentleman. Has been in office less than two years. This was an opportunity to get this trust or mistrust, however you want to call it, out of the way. Both sides trying to say a number of things on the issues, including human rights. They had a candid discussion on human rights and described it as a work in progress and said china has made enormous progress. Of course, the United States would like to see more progress. They also talked about the protests in hong kong. Obama encouraging elections to be transparent and fair. Said, mr. Isingly obama, this is an affair that is exclusively chinas. A polite way of saying buttout. They talked about a lot of issues. Tradekorea, tibet, rival deals, chinas proposed Infrastructure Investment bank, militarytomilitary cooperation or lack thereof. They talked about a lot of issues. It shows that they have a lot of territory to still overcome. Thank you very much for that. Tuned to bloomberg later today. Pimco chiefd former executive will join us. Vomit elerian will join us. Elarian will join us. Let us know what you think of the show and what you want to see more or less of it more or less of. What else do we have to talk about this morning . Today, big day for mark carney. He will deliver the bank of england Inflation Report. He is celebrating an anniversary of sorts. He has been governor of the bank of england for 500 days now. What has he done now in that time . Stay tuned to countdown. We are back after the break to tell you. It is a day of reckoning. Foreign exchange fines for regulators have arrived. We are getting the details. Five banks have been fined and one bank is still in discussion. It is barclays. Barclays has not been fined as of yet. Five banks have been fined. Are jpmorgan, hsbc, citigroup, ubs, and rbs. Estimated fines of between 225 Million Pounds and 250 Million Pounds. Citi, 235, jpmorgan, 222. 1. 1total not of fines is billion dollars. Analysts expected it to be in the range of 1. 3 and 1. 5. That would have included barclays. So five out of six have been fined. Is in ongoing discussions with the fca. Cftc has also not included barclays in these announcements this morning. Theillion worth of fines to banks that you mentioned and that was an estimate of about 1. 5 billion. Just a shade below that. And for ubs, we have levies here for them from their own regulator, which is finma, the american regulator, which is cftc, and from the fca. 100 34 million swiss francs. The americans, 290 million sorry, 200 280 million swiss francs. 234 million u. K. , pounds. So total swiss franc levies on ubs, 770 3 million swiss francs. That is well within what ubs had already provisioned for. My estimates for provisioning was somewhere around 1. 74 billion. We do have other american institutions. We have the office of currency control which may come out later in the day. Ubs also being told to automate 95 of their Currency Exchange trading. Ubs displayed cooperation. These of the messages coming from the swiss regulators in terms of ubs. George osborne said the u. K. Took tough action to clean up corruption. Those are his words. Also saying he will ensure the bank fines are being used for the wider public good. The fca saying that the bank settled at an early stage in exchange for a 30 discount. That is the other thing. Certain institutions went early and negotiated with the institutions like the European Commission, which is what ubs and barclays did originally over the libor investigations. Stay tuned. It is going to be the theme of the day. It was a day of reckoning edit has arrived. Results throughout the morning. Not a card a. M. In london, we will bring you the conduct Authority News conference at live on bloomberg, right here. Mark carney has been governor of the bank of england for 500 days. He has made a number of changes. Tom mckenzie reports. Mark carney became governor of the bank of england in july, 2013. He replaced mervyn king, who reigned for 10 years. Carney has overseen and improving u. K. Economy. He introduced Forward Guidance, giving consumers and businesses confidence to borrow. He has held Interest Rates for five years. Saying they may rise next spring. Carney initiated bank stress , making the sector more transparent. He is current chair of the International FinancialStability Forum and has proposed that if a bank suffers losses, its shareholders should bear the brunt, not taxpayers. On theput jane austen note, showing his love for british literature. The boeicket match at summer party. Maybe he would prefer ice hockey. He was a goalie in college, after all. The head of the bank of quarterly report. Where do we stand . 500 days in, how do we grade him . Rank mark carney 500 days into his 10 years as governor of the bank of a win. He certainly has not been easy to read for the markets. He seems to be shifting back and forth. He is not the only one among central bankers. It is a tough time to be a central banker. Communication is hard. Us reading it and then giving it. What do we expect from the Inflation Report later today . Is that going to be a lot of the focus for today . The expectation is that it will be quite dovish. That would be in line with the market. The market has pushed out the first rate hike well into late summer. I would say the risk is that it is not quite as dovish because the u. K. Economy in itself is doing quite well. Materialized yet, but there are risks. Do you think the market is too far ahead. When you look at carneys language in paris at the end of last week, saying get on with it. See through the volatility. Get to normalization. That is not a man who seems to be waiting until next summer. Is the market ahead of itself . It is certainly possible. The interdependent bits like the fed. If we have a stronger piece of data, the market will change again. You are starting to sound like a central bank are now. You really are. You are in the analytical side of this business. Is the market too far ahead . We will are bullish we are early we are bullish on sterling, so we would say yes. Yes. I am sorry. I am reading too many centralbank pieces. [laughter] finally got him down on one side. That is good. The sevenyear low against dollar. The talk of the town seems to be that the election could cause a sales tax hike next year that binned, anylved, word you wish. Good for the yen . Is it going to head lower . Not to be on the fence, but we think this will continue. Be tax hike would probably negative for the yen. Then again, it depends on what the bank of japan would do in the sense is that they would do more in this case. They will do more animals any case. That is where in almost any case. Is where we are now. That has been our target. When you meet your target, you have to decide if you will go further or not. I think we will push further towards 120 or so. The chief cabinet secretary in japan said this morning that they are not preparing elections. Thank you. Currency strategist at ubs stays with us. More conversations when we come back. Stay with us. Welcome back to countdown. I am mark barton. I am an edwards and i am manus cranny. We still have beat with us from ubs. Lets go to home base. The swiss franc, the Swiss National bank on the tape this really, ig suppose it is defense. The capital for the foreseeable future. We have a referendum coming up at the end of the month on whether they will force the Swiss National bank to hold 20 of the National Reserves in gold. What do you reckon . Problem from the point of view is that it would be a big problem. It is amazing how much interest the swiss franc has had over the last few weeks on the investor side. It has been a massive issue around the globe because we are very close to this 1. 20 floor. This initiative is coming up which, if it was accepted, would make it more difficult so people are really thinking about it. I suspect, in the end, the initiative will not be accepted by quite a large margin and it will go away. But we will still be close to the floor. We are close to the floor right now. You say 1. 2010 is where you would start to see this was National Bank buying euros the Swiss National bank buying euros. Where are we now . 1. 2037. We are basically 20 pips, a bit more than that. Almost nothing. It could happen. Experience has shown that they will come in a little bit above the 1. 20 two not run the risk of technical breaks below. But there is no reason to doubt that they would not do that. It is pretty clear that they will hold on and defend the floor. The question is, why isnt everybody long . Thank you very much. Up on the back of this mornings earnings, Deutsche Post dhls ceo joins us after the break. Stay with bloomberg. Welcome back to countdown. Lets check in on the Foreign Exchange market. Dollaryen coming back off of its sevenyear high. You are seeing the yen rise. There is a whole variety of voices in japan at the moment. Will shinzo abe go for an election before christmas or not . That is the question that is out there. The chief cabinet the chief of the cabinet said he is not preparing for an early election. Really, what you are seeing here is a variety of voices. Keep in mind, november 19, that is when the next bank of japan policy meeting is as they say, the yen is strengthening this morning and the dollar is down. Keep an eye on them. Won,e look at the korean the first timeor in almost a year. We have just come off that level. More orrading at 1096, less, on the nose. The bank of korea meet tomorrow. They will probably keep their rates on hold. It is about the reverberations. Conversations with ubs, they say 120 is available. Ubs say 120. Willllaryen moves, so too the near exporter and that is the korean won. I am anna edwards. Jinpingbama has told xi that they did not have a hand in the prodemocracy protests in hong kong. President obama said the leaders had a Healthy Exchange on the issues of human rights. Both men held a deal that will see china raised targets for cutting carbon emissions. This is a major milestone in the u. S. China relationship and chose what is possible when we Work Together on a global challenge. In addition, we are making this announcement today together. We hope to encourage all Major Economies to be ambitious, all countries, developing and developed, to work across old divides. It is a big day for mark carney in more ways than one. He is marking 500 days as governor of the bank of england. In that time, he has introduced Forward Guidance on Interest Rates. Later this morning, he will be presenting the banks Inflation Report and could cut the growth forecast for 2015. You can watch live coverage of that live on bloomberg from 10 30 you take time u. K. Time. In the next few hours, and unmanned european spacecraft will become the first to land a probe on a comet. It will send a probe to the isface of the comic, which currently in between the orbits of mars and jupiter. 500 million kilometers from the earth. Scientists say they do not expect to find life. It is the day of reckoning. It has arrived for some of the worlds biggest banks. Facing their first penalties for Foreign Exchange manipulation. We have the americans, the brits, and the swiss. Who wants to go first . The americans started first. Citigroup, that hsbc, jpmorgan, rbs, and ubs are all being find between 290 million and 310 million each. They have agreed to cease and desist. Some fx traders and banks coordinated their trading with others and used private chats to plan fx manipulation. Our clays has not been mentioned yet although the cftc does say that barclays engaged constructively with the cftc and the fca. The total from the u. S. Side comes to 1. 4 billion and role get in with the fca, you 3. 2 billion. 1. 1 Million Pounds that comes from the u. K. From the financial conduct authority, its biggestever fines imposed by the fca. Barclays still being investigated. The fxe looking at trading and its wider fx business. Interestingly, before it was expected, analysts million forand 250 the six banks, which included barclays. They are roughly in that perimeter. Parameter. Was the fcat, it that got the ball rolling on this in june of 2013. It was the first agency, regulatory body, to start looking into this market. This 5 trillion a day market, to see whether the currency market is being manipulated. Havehe other two agencies followed suit. Rbs has said this morning that their provisions cover it. That is exactly the line from ubs. Threeline , i suppose a threeline slap. They have been asked to hand. Ver 134 million