Off competition from gulf carriers by booking premium customers. We bring you that interview. Mark hello. Welcome to countdown. Anna a warm welcome to the first hour of the program this friday morning. Overworked and underpaid. Bank of America Merrill lynch is sued by former trainees for failing to pay them over time. We will bring you the latest on that. Mark the fed says all 31 big banks subjected to a stress test at the Capital Requirements necessary to absorb losses during a sharp economic downturn. Anna banks were tested on their ability to survive nine quarters of adverse Economic Conditions including a decline in the stock market and gdp, and the price of oil rising to 110 a barrel. It is the first sign since the fed started stress tests that no firm fell below the main capital thresholds. Here with more is Caroline Hyde. Good morning. Champagne corks popping all over the place. Jonathan 31 caroline 31 thanks all past this minimum requirement. You were talking us through it. When gdp falls by 4. 5 , when stocks plummet by 60 , house prices drop by a quarter and unemployment spikes 10 . Really adverse scenarios. All 31 banks that were tested Deutsche Bank was added to the collection, all of them passed with eight percent in the buffer. You add up all the potential losses that the banks suffer and that too fell in total. We saw 490 billion of losses in their assumption. Thats down from last year, 501 billion. Interestingly, it is the Consumer Lending area that was hurt the most. Thats where they would see the worst hit overall in terms of individuals who wouldnt be able to repay loans, etc. Trading would also be hit in that case. Jpmorgan would suffer the most. Mark theres more stress testing. Com, isnt there . Caroline potentially next week will be bigger. I will be back to say whether the Federal Reserve has given the thumbs up for the payment plans that these banks have. If you are suddenly quite close to the minimum requirement, say you are not miles above that a person capital letter, that financial strength, the Federal Reserve might say, i dont want you to pay out the shareholders as much as you plan. They could fail in that scenario. Theres another area of concern, the qualitative issues. Quality of the internal stress test. Last year, citigroup failed, not because its financial requirements werent there. It had enough of a capital letter, but the fed wasnt convinced that they won the stress test thoroughly enough. They hadnt participated in a sufficient thoroughness. Thanks already have been banks already have been given the nod. Anna which of the banks need to be worried about this next hurdle . Caroline once again, Goldman Sachs is going to be in the firing line. Last year, they paid out quite a significant amount. In 2014, 6 . 5 billion in dividends and share repurchases. At the moment, it just managed to pass by the skin of its teeth. 8. 1 capital letter in the worstcase scenario. They got about 1 billion to give back to investors. Might be a bit of a hit to the investor base. Those that are also slightly worried, morgan stanley, its ratio fell within 1 . It is about 9 capital buffer. We want to see minimum 8 . Who passed with flying colors . Bank of America Merrill lynch. Well above all minimum requirements. It was the only real bank that improved in every scenario. Wells fargo also did very well. At least 2 off. Anna and none of these are forecasts, are they . Just extreme scenarios. Caroline the point is, we do not want to see in a sudden terrible scenario, our economy dwindling, we do not want to see that level of concern again. We dont want any bank failing. From a european perspective, rbs, santander, Deutsche Bank these are the banks that were included in the stress test. Anna caroline, thank you very much. Mark the top stories on bloomberg this hour. This weekend marks one year since the loss of Malaysia Airlines flight 370. No trace has been found of the airline since it disappeared. 239 people were on board. Government ministers from china malaysia, and australia will discuss whether to fund further searches for the plane. The president of Emirates Airlines told bloomberg the disappearance of flight 370 is unprecedented in modern aviation. The disappearance of an airplane remains a complete mystery. Where it is, i cannot say. I wish i could. If it is north or south, i do not know. I just know that it has disappeared without a trace. That is unprecedented in modern aviation. We do not lose airplanes. Mark Harrison Ford is recovering in hospital after his plane crash landed on a golf course in california. 72yearold ford is said to the in a stable condition. He was flying solo in the plane when it came down near santa monica airport. Anna as global air carriers compete across regions lufthansa has said its market share is protected by its performance in the premium sector. The ceo spoke to bloombergs Rishaad Salamat in an exclusive interview and kicked off the conversation with where he sees the asian market heading. In general, if you are the number one Aviation Group of the world as lufthansa is, asia is key for us. On the one hand, we operate 240 flights here every week. At the same time, this is star lines you are talking about overall. This is 240 flights with just left on the group. [indiscernible] it is very tough on the lower end of the market. When it comes to quality, our nonstop offer in business class, we are doing quite well there. In your opinion of course. In my opinion which is what counts. What happens next . Do you think you play on a level field with those characters . Obviously, we dont. We have discussed this for many years. Basically, the relationship between how open trade can be and how fair are you saying it is unfair . It is to open for the level of fairness. Usually, the wto would take care of that relationship. Aviation is outside the wto. Why is it asymmetric . The markets have very different sides and very different laws and rules to play by. Is the competition from them tougher this year than last year . With their rate of growth, it is getting tougher every year. We are regaining market share from other players, but it is no doubt the big boom this year has been the fall in the oil price. Jet fuel prices have folded on that. It must be getting easy for you getting back towards the black at least. Lufthansa has been in the black for the last years. We made a billion euro profit last year. It is about getting more black. Therefore, oil prices helped. Nevertheless, we are hedged for a long time out. And of course the weak euro is giving us some headwinds on this. The euro does give you you can give with one hand and take with the other. Overall, the weak euro hurts us. It creates higher euro expenditure for the same oil price in dollars. Mark you can join the conversation on twitter. Let us know what you think of the show. Tell us the stories you want to hear more about. One of the subjects trending on twitter harrisonford. The big news today, his plane crash landed on a golf course in california. His son said he is made of stern stuff. Anna just about to tweet americas oil paradox explained. All you need to know coming up on countdown. The greek government made some pledges to its electorate before the last elections. Thats understandable, but i dont think the european people can be expected to foot the bill for someone elses promises. Anna the Prime Minister of malta takes a tough line on greece. More of that exclusive interview when we come back. Stay with countdown. Mark it is 6 14 here in london. Lets chat about the ecb. Yesterday, big day for mario draghi, outlining the details of his qe program. Here to discuss is the managing director and chief economist at sea plus economics. He had a bullish tone, didnt he, as he explained the details the intricacies of the qe program. I suppose he had some data to back that up. Guest we had some important messages indeed. They are more optimistic because the downward momentum has been arrested. Of course, Inflation Expectations are still at low levels. The key after august 2014 is that euro Inflation Expectations are firmly anchored is still missing. While the eurozone is more optimistic, he is not confident enough. They given us two clear signals. They are fully committed to continuing asset purchases even as cpi inflation and growth are said to improve in the next year. The second thing is they have left the door to continue as it purchases wide open. One of the key things th ere was the mediumterm inflation getting close to the mandate, still undershooting and more importantly, the eurozone gdp growth forecast. Mario draghi mentioned that risks are still there. With deflation risks contained they are still present. It is not about whether asset purchases will continue beyond september 2016. It is about when they will end. When we will get the confidence of the governing council. Anna what about the details about how quantitative easing eurozone style will work . Did we get enough detail . There seems to be a lot of flexibility as to who is going to buy what and when. Some people say thats a great thing and others say that doesnt give the market certainty. What did you want to see . Guest we are getting quite a bit of certainty on the important details. The ecb has become a major new source of demand for government debt. When you compare the demand which is the ecb ps capital keys versus government supply issuance for 2015, how much supply there will be in the market, there are three things. The first thing is that we will continue to see sharp impressions in growth against germany, which is a great story for eurozone credit particularly for gdp and inflation growth projections. Anna is the ecb going to be buying more than is issued . Guest there is confidence that the ecb qe injects with tighter spreads. Thats good for eurozone credit markets. The second thing is that so far we are seeing euro fiveyear forward braking Market Expectations pushing higher. That prevented german bond yields from falling to negative territory. The third thing is that the euro will probably stay week for some time. It is clear that even as Portfolio Managers return [indiscernible] we are probably looking at hedging that exposure. Mark on the euro, if we see continued weakness low oil prices could boost spending as well. The measures announced preqe all those factors seem to be getting a lift to the economy. Has draghi caught a lucky break . Some suggest qe is beginning at a time where maybe it is still needed but maybe the economy is doing better than it could be doing. Is there a risk . Guest yes, absolutely. This is a great question. I was privileged enough to the in a meeting recently where we were talking about momentum the signaling indicators growth, Business Cycle inflation Inflation Expectations, they are all pointing upwards. There is momentum giving us a more positive signal on the eurozone but there is also a level of slack in the eurozone. Private sector debt is far too high. We are far away from levels of eurozone unemployment that are going to be consistent with sustainable 2 inflation. I think we are just not at a point where the stopgap can be close enough to forget about sustainability or disinflation. Mark we will be back after a short break. Anna welcome back. You are still watching countdown and we are still talking to lena. Lets talk a little bit about greece. You are still preoccupied with greece, are you not . Guest absolutely. A week ago, when this preliminary agreement was reached on the fourmonth extension, everybody thought greece had been kicked into the long grass again. Although grexit has been averted for now, it doesnt look likely. Yesterday, the ecb voted to extend the lifeline for greek banks, but what has become clear is that greeces membership of the eurozone is hanging on a thread. It will be extremely difficult for the government to avoid some form of default in the next few weeks. Of course, the response extended by the ecb through the greek Banking System will help the government to meet its imf payments for the next week at least but we got a huge amount of tbills that are used to finance funds for government daytoday running and it is not clear that the greek banks can fund themselves. Anna how quickly does that come to a head . Guest thats exactly the question. I think the greek government can extend until the end of april just about, but that will probably come at the cost of delaying social payments publicsector wages. It will be difficult for the government to avoid a political crisis at home. With greece running out of cash on a weekly basis now, it looks unlikely that we can avoid a default scenario. Mark lets focus on the u. S. Jobs report. One question i ask you at the break which im going to ask you on air, it is aloften called the worlds most important piece of Economic Data. Is it still . Guest in terms of market moving potential, it is one of the most important indicators out there. I think it is the inflation component of the u. S. Nonfarm payrolls report that will carry the mostly for fed policymakers ahead of this month fomc meeting. The most important thing here is that even though we may see disruptive headlines, we will have to look anything headlines. What we are seeing this week is a combination of serious factors. Strength some weakness. We saw weakness in the productivity report. That means that labor costs are rising. We also saw some volatility in jobless claims. We may get a figure close to 200 k. We may get below 200 k today. What is happening here is this extraordinary run of strong u. S. Nonfarm payrolls figures is coming to an end. We are probably getting to a point where nonfarm payrolls will him closer to 200. Anna but it is not going to lower. Guest it is important to distinguish between u. S. Economic weakness and the recovery maturing. Mark cut to the chase, give me the months. Guest i think theres a strong chance they will raise in june. I think the choice is between june and september. By the time the fed starts raising Interest Rates, the youth Unemployment Rate will have fallen below the longterm trend. Anna thank you so much. Mark stay with us. Up next here on Bloomberg European leaders meet in latvia to talk russia and ukraine. We will bring you more of that after the break. Anna welcome back to countdown. Time for a look at the Foreign Exchange market. The dollar set for its best week in six. Before we get that u. S. Jobs report they are on. The contrast between the ecbs quantitative easing Stimulus Program which will start on monday, contrast that with what the fed is doing. Lena telling us that she thinks the fed will start tightening in june or september. 235,000 is the number that is estimated by economists as having been created. Thats the number of jobs created by the u. S. Economy in february. A high bar was set in january. We saw 336,000, that was the threemonth average through the january. What will february bring . As bad weather at a negative impact on the amount of jobs created . Strike action in some of the ports on the west coast, has that had a negative impact . A lot of focus on the wage elements of this report. Average earnings remain subdued since the start of the expansion phase in 2009. Weve had some encouraging finds from the likes of walmart about increasing wages. Will we see a number of of 200,000 . If we do, it will be the 12 consecutive payrolls number above 200,000. Mark the top stories on bloomberg this hour. The uks chancellor exchequer says he made a mistake not restructuring the statecontrolled royal bank of scotland after 2010. Thats according to a report in the financial times. The report says osborne would likely would like to move quickly to get rid of it. The u. S. Stress tests arent good news for Goldman Sachs. It isnt enough for the firm to match last years dividend. Share purchases will be less than 1 billion in excess capital to pay out the shareholders. That is much lower than the 5. 4 billion it returned in 2014. Bank of America Merrill lynch have been sued by two former Financial Advisors who claim they werent paid overtime for 10hour days long nights, and weekend work. The former trainees accuse the companies of violating the fair labor standards act. Damages exceed 5 million according to papers filed with manhattan federal court. Ecb president mario draghi is claiming victory for his Stimulus Program before it has even started. Draghis 1. 1 trillion euro program of qe will begin on monday. He says it will start the fastest growth in the eurozone since 2007. Anna russia and ukraine are on the agenda when European Union ministers meet today in latvia. The kiev government began to withdraw heavy weaponry from its easternmost regions in february, with withdrawal continuing as the peace accord takes hold. Mark ukraines government has been talking about the Economic Cost of the conflict. If foreign reserves fell for a ninth consecutive month in february. Output is expected to shrink this year. Kiev is receiving 17. 5 billion in international aid. Anna lets bring in tony. Good morning to you. What signs are there that the ceasefire will hold . Good morning. As you said, ukraines military is withdrawing more of its heavy weaponry from the frontline and it says it will continue to do so as long as the situation remains calm. Rebel forces say they will also pull back their material. Generally, the impression is from those on the ground that the ceasefire is taking hold. It remains fragile. Theres a great deal of mistrust on both sides. The number of those killed and injured has declined significantly. Anna what are the process the prospects of the u. S. Sending arms to ukraine . It has been talked about for