We dont think of any asset bubble bubble. We cannot allow instability. European stocks in the red as officials dampen hopes of an imminent deal with greece. Ecb board member tells cnbc the central bank wont bend the rules to save athens. One has to be quite clear. We do not have a possibility to do financing. Meanwhile, fifa presses ahead with its president ial election. This as authorities reveal the number of authorities arrested for criminal charges are facing extradition to the u. S. Welcome to Worldwide Exchange. Record volumes in shanghai as the composite index ended the session down 6. 5 . This after the chinese stock index closed at a 7 year high in yesterdays trade. Why did we see such a big sell off in the Chinese Market . Lets get to have following asias trading action live in singapore. Hi there. Ive been saying for sometime that potential is building in the market and on capital connection. I was talking to darius who agreed with me. Before this correction happened we were discussing this and he said look this market is ripe for a correction. Here we have it. Were up by 6. 5 at the close. This is the sharpest decline for china stocks since january 19th and there are two main reasons here. The first one and remember it was lead by the brokerages and this is on reports that those brokerages are going to increase and tighten the restrictions on margin lending. This is essentially stocks being purchased on credit. This has driven the bull run of chinese equities. Theres an attempt here to prick the bubble. You have to step carefully because were talking about 2 trillion in margin debt that has been accumulated. That is almost 3 of chinese gdp. The other factor here that ive been hearing and this is unconfirmed that is the pboc have been draining liquidity through the back door to try to enforce more discipline on the stock market. The big question for me is whether this is the healthy correction that encourages more investors back into the markets to have another go. If they missed the bus the first time around or whether were going to see an extension up the slide on tomorrows session. On friday. Again i spoke to darius about this and he said that the momentum was very strong. So its conceivable that we could see an extension of that slide into friday. Remember as well next week is going to be another big test for chinese equities because we have pmi data out. Back to you now. Just following up here its just a crack down on margin lending that may be the reason we saw the sell off in the Chinese Market. Do you think valuations are also a part of the story . I believe stocks trading at 70 times forward looking earnings . Yeah be that as it may theres a sense in the market that valuations are still quite attractive despite the very sharp run in chinese equities. Valuations are still below the peaks in 2007. You have to appreciate the money heading into the market. The other dynamic here is that the Hong Kong Markets suffered today. Down by more than 2 but remember that the valuation gap still seems to favor the Hong Kong Market over the shanghai composite which is still trading off a 30 premium on average against the hang seng so in the medium term momentum is probably going to favor hong kong equities simply because of that valuation gap. Back to you now. For now, thank you so much. Now to the currency market. The euro is holding on to gains after a volatile session on a number of mixed messages on greece. Officials in athens voiced optimism that a cash for reforms deal with creditors was close. However the eu commissioner and german finance minister knocked the wind out of the rally by denying the report. Imf chief was told that there was still quote a lot of work to do before there will be a solution on greece. However she added that she is confident that athens will fulfill its commitments. Meanwhile, ecb board member told cnbc exclusively the central bank wont break the rules to help greece. Listen in. Theres always a lot of noise in such a situation and i think the important point is to distinguish them less from the facts and what we want of course theres a bit of psychological warfare but this is all the political side so we are not involved in this. Its quite clear that we have certain conditions to be met. One condition is that it can accept greece bonds as collateral. The answer is for the time being no. The second question is whether there are other ways of financing. This is the way of emergency liquidity assistance. Also this is under the con to and also under the risk of the National Central bank or the Greek Central Bank but it has to get approval. You mention collateral. The scheme is the lifeline keeping greece afloat. Would you consider changing part of it or restructuring it in a different way in order to help the greek banks which could be looking at running out of eligible collateral so they can stay afloat when an agreement is found. One has to be quite clear. We do not have a possibility to do some lets say, financing outside our rules. I know there have been some ideas floating around that we might give some kind of interim financing just like that. I dont see any legal possibility for that. The greek government keeps talking about red lines. Do you have any red lines . Does the ecb have any red lines . We are not involved in this lets say, political bargaining process. So we look at the results and then take our conclusions. Julia is now joining us to discuss the fate of greece. Weve seen this movie before. Encouraging comments from greek leaders. Stocks move higher to find out that greece was overly optimistic on the stage of their negotiations with creditors. Overly optimistic was a kind way of putting it from the conversations that i had with my sources in brussels. Greek spin was one phrase used and we also had wolfgang pouring a lot of cold water on it. The truth is somewhere in between. New progress is being made and talks are continuing but were not likely expecting to get a deal even by the end of this week so you have to take some of the commentary with a pinch of salt. No wage cuts a hong Term Solution and developer package. A real win if thats the truth here. The time will only tell. As greece navigates, tbills are the only source of commercial borrowing at this point. Whats the role in all of this. What we got there was saying we cant bend the rules. Theres legal issues. Theyre not going to allow fiscal policy or the banks in greece to finance the state but if we have a program in place theyre starting to see implementation of policy once we got the deal signed. The process will then allow the euro group to sign off on it and the hope there is if we start to see them implementing policy perhaps the ecb will raise the limit on the t bill issue they can do. They need to make sure a deal is in place and policies are followed through. When could we actually see it . Theyre saying its already being drafted which is one of these things still to come. Who knows . But were not going to get the announcement on that. You have to wait and see what we get from the european leaders. First thing is the benchmark here and get it. Right now were seeing the euros come off the highs. Well leave the discussion there. From the euro to the yen, the japanese yen touched the lowest level since 2002 against the dollar. Its a hot topic among finance ministers meeting at the g7 meeting in germany but the bank of japan insists the Exchange Rate reflects economic fundamentals. Steve is joining us live where he caught up with the Central Bank Governor of japan. Steve, tell us understand what were some of the main takeaways. Were all obsessed by greece. Why . Its a distraction and because as jack lou i just saw following up because there will be contagion contagion. He just said this ring fencing of greece away from Everything Else going on in the world is a myth really. You cannot say there will not be a domino effect. You cannot say this wouldnt lead to events in spain and elsewhere. Now here in lies the case and point. If japan was firing on all cylinders. If they were near their 2 inflation target and growth target as well do you think we would be worried about greece . If germany was surging ahead with growth and moving ahead and the u. S. Was on the second rate hike by now we wouldnt be worried about greece. Its because of concerns of instability and because of the chinese stocks that we have worried about greece. Theyre worried its a lightning rod for other events and yet he was very optimistic echoing the previous comments about inflation target and it will be met. He said theres several reasons we think inflation targets will be met. Well have to wait until the first half of fiscal 2016 which is a little later than what they estimated but he think thes will get he thinks they will get to that level. And because there is going to be job negotiations in the spring. Thats very important for the currency. It will maybe draw a line under the 13 year lows for the yen and 13 year highs for the dollar. In general from the discussions with leaders, do you subscribe to the reasoning that soaring stock prices means stocks are overvalued. One thing i will say is kuroda did not see any signs of Financial Success in the markets. Well try to get it to viewers on Worldwide Exchange but he said categorically we have a Financial Stability mandate in fact we have that tape. Lets listen in. We are always careful about Financial Stability because the bank of japans two main objectives are that. Whenever we discuss commentary and Monetary Policy but also Financial Stability. We carefully and so far we havent seen any kind of excess. Excess in the industry and so at this stage, we dont think that theres any asset bubble or stock market bubble but we will continue to carefully monitor Financial System and like other central banks. We will not allow Financial Success or instability developing. Now that interview has been getting a lot of traction on social media. So we want to hear from you on this. Do you agree or disagree with the japanese Central Bank Governor . Do you think qe is creating bubbles . Join in on the conversation here on Worldwide Exchange. Get in touch with us by email at worldwide cnbc. Com twitter, my personal handle on the bottom of the screen and steve whats your twitter handle again . Thank you very much. One thing i will say is its clear in some Asset Classes they look like bubblelike conditions around the world but why we talk about the nikkei is because amari who is a government minister about a month ago he said if there is a small bubble and he said if he didnt say if there is one, he said if there is a small bubble in the japanese stock market thats something we would welcome and we can control. I think thats very dangerous language when government ministers Start Talking about if theres a bubble thats okay as long as theres a little one. Thats something i spouted about and im glad you have given me the platform. So thank you, seema. Listen, its a contentious debate as to whether were in a bubble or not and various leaders from central bankers to finance ministers. I posed that question to the finance minister of india as to whether the indian stock market is a bubble. Well get out throughout the show and in the meantime lets get a European Market update. The stoxx europe 600 posting its best one day gain in a week on the prospect of the deal coming together. Stocks losing a little bit of momentum. Were looking at the index down just about a third of a percent. If you take a look at the major indices youll see red across the screen here. The ftse 100 Still Holding on to 7,000. We do get the u. K. Gdp number expected to come in at 0. 4 0. 5 or so. The bright spots expected to be construction and the Services Sector but a lot of focus will be on whether the political instability priced into the u. K. Market and some of the Economic Data now that that discounted given that we know who will be leading the u. K. For the next five year ifs that will help resurgence in Business Activity here in the u. K. The dax right now down by around 31 point although we should point out some of the exporters help the index climb to new highs. We did see a trim digit move to the upside in the german markets yesterday. Cac 40 at 5,156 and italian markets down by around 70 points. The bond market interesting moves. In europe negative rates have been a powerful source and we also heard that negative rates are not for the longterm but in this environment where investors are searching for yield we have been seeing a bit of bond buying. A different story than earlier this month when we saw the big sell off and right now the german bund yielding 0. 53 . But all eyes really on the ten year treasury note given the mixed Economic Data we have been getting out this week. Durable goods, housing prices. We have to keep in mind that was very strong. So a vote of confidence. One of the focuses for janet yellen and the fed as they consider when to raise rates in 2015. 2. 14 . Just off the highs we saw about two weeks ago which is 2. 32 keeping an eye on the bond market. Plenty more coming up here on Worldwide Exchange including an exclusive interview with the ceo of Security Software maker symantec. Ill be speaking to him at 11 20 cet. Make sure you wont miss it. Airbnb has been tipped as a potential ipo candidate this year. The ceo talks about the risks of going public. Everyone better understand what your longterm vision is and what youre doing. The worst thing in the world is seeing a company that gets hammered on by investors and people dont know what theyre doing, theyre questioning their next move. I dont want anyone to wonder about my next moves. I want to make sure the next big moves we make we already made. I want to take a lot of the risk while were a private company. Lets talk about start up opportunity. Joining us now is fred destin fred, a pleasure to have you on the show. I have been on the hunt for finding the next Silicon Valley hub of europe. Our focus is turning to the east as more governments allocate capital toward entrepreneurship. Is excel in Eastern Europe and if so why. Eastern europe has delivered over the years many High Quality Companies companies, but now were seeing a bubbling of talent. We have invested already in companies and were seeing companies such as skype and opportunities bubble everywhere where as in the best we had logical hubs to go through. Now were seeing that innovation is distributed. This is why im here today. East meets west and trying to find the next generation of great entrepreneurs. That brings up my next question. Does this also have to do with valuations . The ultra sized price tags pushing investors like yourself to broaden your scope of investment . I dont think its correlated at all. We always invested in places like finland and found places like holland or spain. So we always looked at entrepreneurship as being able to come if any zone. The valuations are clearly some what out of control on the later stage round but it doesnt really impact what we do at the earlier stages to be honest. Its not been a factor for us even though the market as a whole is very buoyant right now. I want to get your thoughts on drones. Excel making headlines this week. Announcing a drone Venture Capital fund. Talk to us about the opportunity in this disruptive technology. So we have a joint initiative so look at the best Drone Companies on a global basis and ended up making a 75 million joint investment out of china and now were seeing drones a little bit like the phone industry. Some people have to deal with great complexities of hardware how do you keep a drone flying, how do you deal with navigation but theres an opportunity for platform plays where thousands of developers and starters can build on top of a platform like that so were leveraging our investment in what we feel is the best Drone Company in the world to try and build an ecosystem. Were doing the same on the drone side and the applications are endless from monitoring agriculture to media. So its really the sky is the limit or your imagination is the limit in terms of what is possible with drones. There seems to be endless opportunities when it comes to the innovation when looking at drones but do the regulatory head winds scare you as an investor . I have never been in a company where we didnt have any form of either legal or regulatory head wind. Whether that was in video sharing or back on the pharmacy side. So we always have to deal with that because were always at the forefront of what Technology Enables and the law and the regulation tends to come and adapt a few years later. This is part of our business. We have no particular concern around the drone space. We think it will get figured out. But thats part of our business. Thats what we take on as a risk. I feel like a broken record but have to ask you fred you and i discussed this a lot but are we in a bubble in the tech environment given the type of valuations were seeing . Not just here in europe but what are your thoughts at the end of may . Three points i would make quickly, number one is prices are incredibly high. So i will not deny were seeing a lot of price tension and that may point toward overheating of the market. Secondedly however, we do live in an age of opportunity where companies are scaling incredibly fast. Weve seen this with the likes of the remittance space. These companies that blow up very quickly like blah blah car. The third point i would make which is sort of new to me and something i have been thinking