tv Bloomberg Markets European Close Bloomberg September 28, 2016 11:00am-12:01pm EDT
write a letter, you would be willing to give us a response on that? you made a comment a minute ago with regards to what you're done with community chair yellen: examples of what we have done? >> yes. we changed the holding policy statement to raise the threshold -- >> i think we did that in congress, if i am not mistaken. chair yellen: we did, and we put that into effect. >> i am glad to know you implemented our law. they give very much. >> the time for the gentleman has expired. the chair recognizes the gentleman from california, mr. sherman. mr. sherman: madam, chair, good move, or non-move last month at fomc. some say our economy is in such
terrible shape those that make economic policy is obviously an competent, and then come back on wednesday and say it is urgent we raise interest rates because the economy may overheat and economic growth could get out of hand. only in this room could you juxtapose those two positions. we need to allow small-business loans. i have been told by many bankers if there is a 2% or 3% risk that a business will go under they cannot make the loan. jamie dimon was sitting where you are now, and said he could not find qualified, small-business borrowers, under that standard, so he sent his money to london, where it was eaten by a whale. it would do a lot for the security of our financial system, and also help the economy of this country, if banks were able to make prime plus three, prime plus four loans to businesses that had a
little risk, and, of course, provide a reasonable reserve. instead, i am told if you do not , youfy for prime plus two leave the office. i join the chair in saying it is a good idea to tailor your regulations, and i would say the lessyou designate, the significantly you will regulate sissies. sifi's.he -- i want to address the elephant in the room, or maybe i should say the stay coach. i will remind you the -- has the authority to break up the biggest banks. i have said that before in the room. they said you must have animus --the true global, national divide inrotozoa can
a healthy manner, you would think the smartest minds on wall street could as well. too big to fail is too big to exist. let's look at the elements of that. too big to fail is too big not to bail. that is why we bail them out in 2008. too big to fail is too big to jail. that is why eric holder said he could not indict certain institutions because it if he did it would have to big of an effect on the economy. -- too big to fail is too big to compete with. that is why some studies say they get 80 basis points off the cost of capital -- it might be less -- the cause of the capital -- if they get in trouble, we will bail them up in wells fargo has identified two additional regions to -- reasons to break this institution appeared to have created a system where they
hired good americans, and turned 5300 of them into felons. 2 million felony. they failed to monitor the system. when they saw that some individuals had created phony accounts, they fired 1000 of them, and didn't change the system, and didn't fire the executive the created the system system.ated the i say to fail is too big to manage. from the republican side, i have heard too big to fail is too big to regulate. whether the fault is the regulators who cannot regulate it, or the managers that cannot manage it, too big to fail is too big to exist. my question is will you seriously consider using your authority -- as i think you are required to review and consider using your authority -- will you at least seriously consider breaking up wells fargo? ther yellen: we will hold largest organizations to exceptionally high standards of
risk management, internal controls, consumer protection. we expect -- mr. sherman: but if you broke wells fargo up, instead of trying to hold them up to really high standards, people could choose, you know, which financial institution to go with. they would not pose a systemic risk. by saying you will hold giant institutions up to standard -- something you have not been able to do 2 million times -- 2 million of phony accounts. you are saying you're going to continue to do a great job of regulating the too big to fail because you are not going to break them up? well, we believe it is possible, even though it is extremely challenging, for organizations to comply with the law. mr. sherman: 2 million phony accounts not detected by the regulators. break them up. >> the time has expired. we know identify the general and
from michigan, mr. huizinga -- gentleman from michigan. mr. huizinga. chair, wish you -- thank you for being here, but to be honest, wish you weren't. that thehe position investors and has refused to appoint for six years. governor trudeau has essentially filled the function from his position as chair of the board committee on supervision, but he is not in this position, and quite honestly, by refusing to fill this position, i believe that the president has deprived congress and the american people an opportunity to hold the fed accountable through the semiannual hearings. this is a requirement of dodd-frank -- the much vaunted dodd-frank that some of my friends believe is somehow holy script that cannot be changed or altered in any way, but they conveniently refuse some of
those other areas. do you believe there should be a nomination to fail this position? chair yellen: we would certainly welcome a nomination. : have you brought that up with secretary lew in your weekly lunches question mark chair yellen: this is a matter for the administration. mr. huizinga -- that is not my question. withyou brought it up secretary lew or anyone else. discuss what i --chair yellen: i will not discuss what i have discussed with the secretary had we would welcome a nomination. we'll continue to hold you responsible for that obligation, something you should not be held for, but that is your decision. i am going to go on -- do you believe any and all rulemaking regarding regulatory supervision should be suspended until the vice chair is actually named.
chair yellen: no, because i think the board of governors with supervision and putting in place regulations, and we are carrying -- mr. huizinga: food we hold responsible for that? chair yellen: we are carrying that out. mr. huizinga: who do we hold responsible question chair yellen: i am responsible, and my colleagues are responsible. congress has assigned the board of governors that responsibility. i am certainly sharing the responsibility with my colleagues. mr. huizinga: this is going fast. i need to move on. i want to talk a little bit about monetary policy versus regulatory and supervision -- supervisory roles. my said is that in oversight and reform modernization act, the four masked, and by extension, the choice act, we are trying to bring some separation to your function as monetary policymakers, as well as your
regulatory and supervisory roles. former senator and banking committee chairman chris dodd, at the as chairman frank time, had advance legislation, or advanced the notion that those ought to be separate regulatory that your and supervisory roles all to be put on budget, and i am curious, were they wrong in that assessment? chair yellen: well, congress decided to -- mr. huizinga: you would welcome, then, if congress decided -- you would welcome having that separation, and putting your regulatory and supervisory roles under budget, and with review, just like everybody else -- every other regular --versus the separation of your monetary policy duties? chair yellen: well, the banking agencies do not have their budgets mandated by congress. they are covered by collections
from the industry. weould very much worry that would lack the flexibility under congressional appropriations to ramp up our supervision at times when -- mr. huizinga: but we have an alphabets soup of all these other regulators that are there as well. it seems to me you are wanting to have your cake, and eat it, too. you want this super-dupre regulatory role, where it is said overall us on all of this stuff, but you are not willing to subject yourself to what other regulators go through, and that just seems that -- rarely do i say that i agree with barney frank, but i believe that chairman frank, at the time, had at this right, and there is that separate role. my last issue is, as we are quickly closing out here -- some have believed that dodd-frank
cannot be changed at all -- any way, shape, or form. you said on page 14, page four a number of times -- or ought to be these adjustment to have you spoken to senators or other representatives would disagree with you and say we cannot touch. frank? >> a brief answer played --please. chair yellen: we have expressed that. >> the time has expected the -- expired.t chair the chair recognizes mr. meeks. mr. meeks: it is a pleasure to looking you back to the committee, and we say i also thank you for staying who you are, being nonpartisan, independent, despite there being some, especially in the presidential politics we are currently engaged in, trying to say your decisions are based upon a partisan way. in fact, i think that it is good when you are criticized from both the left and the right, and
from everyone. that probably means you are doing the right job, as you are not focused on either side. we in this committee specifically reinforced the banking supervision powers of the federal reserve in dodd-frank. there was clearly a need to heighten our banking examinations and regulatory framework. i think that is clear from what to life back in 2008. the good news is -- what took place back in 2008. the good news is we have seen banks exiting out of certain risky activities. we do see some of that happening. even if someone say banks are bigger today than they were before the financial crisis -- that, probably, may be true from a simplistic perspective, but it is not a complete and accurate picture, because not only have banks exited some of their riskier businesses, they have also boosted their capital and
liquidity buffers, which increases the size of their balance sheet, but makes them safer and sounder institutions. it is a complicated step, but it is true. fargo,still have wells which, you know, causes us to have great concerns as to where we need to go next. so, there has been some progress , then there is also unintended consequences. i want to shift to that now, because it is well documented that one of those unintended -riskingnces of banks de our that banks are getting out andertain communities countries, and also denying services to millions of lower-income americans, not because the risk is too high, but simply because the profit margins are not considered high enough. there have been serious consequences on vital correspondent banking relationships that are critical to international financial flows
also. another major problem happening in several communities here, including in a district like mine, is that banks are closing branches. in fact, economists from the federal reserve bank of new york released a report last month entitled banking deserts -- branch closers, and soft information. it shows that u.s. banks have shut nearly 5000 branches since the financial crisis as a result. of low income neighborhoods have become more likely to live in a banking desert. that is why i have called the revamp of the community lettertment act in a cosigned by 40 of my colleagues. some are still signing on. is notbvious that cra working the way it was meant to work when it was passed 40 years ago. i have had this discussion with comptroller curry and i strongly believe the solution resides in
enabling greater web ration between large banks, cds i's, and minority deposit institutions, so they can take over assets and branches before they close, and more portly, so they can reserve banking services and relationships in low-income communities of color. so, the controller and i are in constant dialogue on this, and i would love to get some of your thoughts on this matter. chair yellen: well, i am concerned about banking services in low-income communities, and we are working with minority depository institutions to provide support to them in enhancing the very important and valuable role that they play in ensuring the provision of services to these communities. mr. meeks: so, do you believe -- 40 years ago there was one is sort of view -- banking and cra was put in to make sure we had
institutions. do you believe there are ways we can revitalize or revamp? have been listening to the federal reserve chairman janet yellen speak before the committee addressing issues from interest rate increases and non-increases, two major issues to do with u.s. banks, including whether wells fargo should be broken up, for example, and also the question on living wills, and said his chair yellen saying the fed has been specific on what it wants on living wills, the fixes it wants, and stands to use its authority. we'll have much more on chair yellen's testimony, and an interview later on today with representative maxine waters. >> it was interesting -- we were not as a fairly expecting a lot of comments on fed policy, but chair janet yellen was asked some questions on this, and she said we are not seeing upward pressure on inflation.
she also said we expect to see the jobless rate fall further, and that the fed would gradually remove accommodation on common costs, but there is no fixed timetable for raising rates. she did reiterate that, but said the fomc majority sees a rate rise as likely needed this year. still ahead, shares of deutsche bank are rising from an all-time low after the lender agreed to sell its u.k. insurance business. we will have the latest next. this is bloomberg. ♪
instead, it has a licensing agreement to make -- distribution blackberry devices running on secure software appeared it comes after ceo john chen took over and outsources manufacturing to foxconn technology groups. walmart is set to invest in company.slip card amazon is spending $5 billion to expand there. is -- inbusch-in bed approved the acquisition. they say they will retain its name, and sab miller will disappear, and that means the end of a corporate identity that 19th back to the late century. that is your business flash this hour. shares of deutsche bank
are rebounding from a record low they had on monday after the german lender agreed to share its u.k. insurance business for $1.2 billion, and the ceo ruled out a capital raise. during us now is bloomberg finance team leader, simone meier. great to have you. i have a chart on the bloomberg showing deutsche bank on senior debt over the past year as well. you can see the general trend is moving up, but we are seeing it come down a little there today. is this a bit of a relief rally in the markets on the news we have had today? simone: it is definitely a relief rally, and there has been risk aversion. ,e have seen a driving cdf's options, and shares coming up from record lows. it is not just the asset sales, but also the fact that he ruled out, once and for all, or at
least in the immediate future, that no jamaica will raise capital, and that becomes -- that comes as a huge relief to investors that were worried to it -- about it ever since doj presented -- boj presented them. nejra: what about the aspect of government aid? where are we with that/ we have reports that the government was looking to take a stake in deutsche bank. simone: that is one of the reasons fueling concerns among investors and shareholders. what we can say at this point is these sides did say there has been some preparation for contingency plans that could include, even, the government taking up to 20% in deutsche bank to stabilize the lender if it came to a worst-case scenario, but the finance ministry has been quick to rule it out right away, saying there is no such planning going on right now, keeping in mind it is an election year. there is a lot of talk out of berlin and on all sides as well.
simone: it is fascinating to me because the sale of abbey life only boosted the ratio by .1%, and has to record a loss on the sale of that. to me, this might have spooked investors. is it something else that is happening that is making investors, you know, a bit more relaxed, or are they feeling out short positions at this point. probably as well. it is only 10 basis points pushing up from 10.8 at the end of june. that might just be a drop in the ocean, but it is a step in the for john, whon has been trying to stir up capital offers. it might be the beginning in terms of asset sales, trying to boost to healthier levels with the targeting 5.12% by 2018. they seem to be on track, and they will probably give us more guidance at the end of october when they release third-quarter
earnings. vonnie: i want to point viewers to bloomberg, the chart, deutsche bank options, and they have been searching all year, particularly in the last month or so. they are about 3 million or thereabouts. what does that mean? it is a reflection of the risk aversion that is going away at this point a little bit. please see shares rebounding, the number of options surging. we are really moving to healthier levels of -- four deutsche bank overall. next for johns cryan from here question mark -- from here? simone: that is what everyone wants to know -- the concerns on the markets, but what has been laying on the agenda, it is up
to john cryan to decide and point is in the wrong -- right direction going for. meier, thank you for joining us and giving us the update on deutsche bank. still ahead, andrew wilson from goldman sachs asset management joins us on the program, and he says europe needs to heed's japan warnings when it comes to monetary policy. a big day for bloomberg. you can was set on live go. you can see republican presidential nominee donald holding an event, speaking to chicago's polish national alliance. that she iscomments saying his administration would be a true friend to poland, and talked about his understanding poland pays his bills to nato, and he would negotiate with putin from a position of strength that
clinton giveaway -- this is rudy giuliani saying giveaway. .e also have janet yellen we saw chair yellen take many questions from lawmakers earlier. john cryan let's take it -- atra: let's take a look where european markets are trading as we head to the close, just four minutes away. is almost benchmark basically wiping out its monthly loss. .5% higher. ax pushing higher. cac 40 leading the games. this is bloomberg. ♪
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taking a look at how various industry groups have performed, i want to refresh this for you. been leadinghave the gains come along with commodity producers, of 1.5% and almost 1.4% respectively. as you can see, pretty much every industry group gaining on europe's equity benchmark today. there is one stock in particular we have been keeping her ion. for the seventh day out of the past nine, it has been moving in the same direction as the stoxx 600. and today, that is up. this has been rebounding after the record low on monday after
it agreed to sell its u.k. insurance unit. been seeing the stock move higher today, but i wanted to show you the cds. as you can see, the general trajectory has been moving higher. but we have a little drop off of the end. there is a little bit of risk on today for this stock, whether it is a relief rally just for today or whether some of the concerns are really coming out of the picture am a that is the big question. vonnie: u.s. stocks, not quite the same picture. the s&p 500 is down 3/10 of 1%. the nasdaq is down about a 31%. -- a third of 1%.
if you look at the vix, it is rising a little bit. the dollar rising again, that's thanks to weakness in the end. we are -- in the yen. the mexican peso as well has given back some of its gains. it is weaker today by two thirds of 1%. courtney: taking a look at the news, the dutch-led investigation has advocated russia in the shooting down of a malaysian airliner over ukraine two years ago. russia's foreign minister calls the probe politically motivated.
3200y has now arrested people. more than 15,000 have an expelled from the government and military. turkey is demanding that the u.s. extradite a muslim cleric who is blamed for the attempted takeover. a deal on capitol hill could see a standoff on the gap funding bill. ande speaker paul ryan -- er nancy pelosi senate republicans can't confirm the dispute has been resolved. is expected to override president obama's veto of a bill that will allow saudi arabia to be sued for involvement in the 9/11 attacks. the president argues that the bill could open up the u.s. to
lawsuits all around the world. in more than seven years, congress hasn't overwritten one of president obama's egos. a group of global leaders will attend the funeral of shimon peres. won the nobel peace prize in 1993 for the historic peace accords with the palestinians. president obama well attend, as well as bill clinton and prince charles. wife's our next guest says europe should look to japan for warning signs on the consequences of cutting rates deeply into negative territory. joining us now is andrew wilson.
so great to have you on the program. of central banks, we have been hearing from janet yellen this afternoon. we have mario draghi starting to speak in berlin now. talk about how you are navigating this environment of low rates. andrew: if you look at the development of central bank policy, serving with negative rates and moving into quantitative easing, in japan, it is around current levels. wascomment i made cutting rates into negative territory has a negative impact on the banking sector because of what adjust interest margins.
banks every my full that they are not putting in place policies that prevent what they are trying to achieve, which is improving credit creditn and getting going. the look to europe would be more challenging because there is a single market. there is a range of different countries. and how such a possibly that's how a policy would implemented. courtney: and in terms of looking at europe as well, we've and --rom deutsche bank do you think we might see a crisis? cautious around european financials. more -- a more cautious approach a we would like to see what the next stage is and how those policies are
going to buffer the impact of negative rates. banks can't really pass on the negative rates consumers. so if they can find a way to do that, it's a long way down the track before that's even possible. i think that's where the bank of japan is adjusting because they have done something to try to ensure that the yield curve has some slope to it. that has been a problem with flattening yield curves across the world that i europe, but of across- but of course, the world. >> how will they managed to do that? it worked for a few yet -- a few hours. we sub back in a negative 10ritory again and back to points.sis
andrew: do they signally rallying yields by buying less? we are looking very closely to see if we see some stepping back from the right to purchase to try and keep the yield in a narrow range. we areectation is that likely to see something, if the yield on the jgb can to in negative territory. i think that is the key issue we are focusing on at the moment. think anybody was anticipating that move from the bank of japan. that and the idea of doing away with the 2% inflation target. was a good idea? andrew: it was a positive surprise from a market point of view. one of the big issues we have been focusing on is the availability of japanese government bonds. the japanese government owns about 38% of all out sending debt during -- that.
38% of all outstanding debt. we haven't seen the japanese central bank get close to that target. we are wondering if it is possible to overshoot. i would take it more as a long-term commitment, that they are determined to get a push him back towards the 2% level. this is a long-term commitment they are making. >> i know you didn't hear janet yellen testify. in terms of on policy, she did much that she hasn't said before, but they do expected to get less accommodative. but there was no specific time on that and she did dr. arthur
not being an upward pressure on inflation. one of your colleagues has talked about the fact that this inflation environment means you should really be bullish on bonds. what is your view on european bonds? andrew: with yields here, it is like the just stay low for a very long time. asus, we are saying yields everywhere look pretty and, particularly in light of what will be a fit that is raising interest rates this year, a little bit more next year. we would like to see an upward pressure on yields. both the ecb and the boj are stimulating. so you have the boj moving in different directions. i think that european bonds on a relative basis look better value to us than american bonds do. i said european bonds, not specific to german bonds.
we are looking at that cautiously, given the environment on political elements. pimco [indiscernible] investors use suddenly be worried about treasury inflation? andrew: inflation is sticking up here in core inflation in the u.s. is at 2.3%. the labor market is pretty tight. we've seen wage rates move a little higher. happen in gnome a slow-motion. but we have pressure on inflation and it is likely to creep higher through the balance of this year and even into next year. it makes sense for investors to be aware of this. we are all very focused on the negatives come on the downside of soft growth. but the u.s. economy is moving at a reasonable rate.
those wage pressures i think will start to show through. some bass effects on energy will start to flow through. all of that is putting gradually higher pressure on inflation we think. ceo of theobviously middle east and africa. there are many economies in africa that deserve a second look and have really interesting stories going on, what with commodities bouncing back and cell phones -- and so forth. andrew: africa represents a relatively small part of our business. from an investment point of investmentsvery few given our size. it's not compelling for us to be able to this kind of countries.
we have clien in their region still looking to diversify across other markets. it's an area for us that i would say is worth giving a close eye on, but not somewhere we are committing a lot of t. over the next go year will be the biggest shock to markets. you've got a u.s. election. we keep tracking fed policy. we've got european political risk. is there anything you're particularly focusing on? and how are you protecting against it? those things. normally, politics do not play big part and develop the markets. but a big change could take course in the next few months. i think the big focuses on europe and how that plays out. context of the u.k.'s position with europe, who will the u.k. beef negotiating -- will u.k. be negotiating with?
in china come at the moment, things have called, but provided stimulus that has growth on a stable or steady level. as we look into 2017, we've got to watch what is going on in china and any slowdown there will certainly cause eruptions throughout the market. of course, we have political the elements in the u.s. and europe, but the growth in china is still he issue. and we need to make sure that remains pretty stable. any downshift in china has ramifications for all of those markets. >> i'm glad you brought that up. i wanted to as whether investors are underestimating the risk of china and underestimating the risk of brexit. >> in the risk of china, it has been talked about. the question is tried to understand come as a rebalance our economy, can they do so in a smooth way? the property market is on pretty strong terms again and the question is really if a sustainable, the kind of growth rates we are seeing. so we are focusing on to see how
that goes. in terms of brexit, this will be longer-term and negotiation. in the short-term, we have seen some of the benefits of the bank of england's move off softer sterling. the consumer is being resilient here. but the big issue is around business investment. that is a longer-term decision-making process. the consequences of that in 2017 and beyond. what everyone else, we are looking to see when article 50 itself is triggered and where the key points in negotiations and the consequences of the various u.k. industries as a result of that. one investors in law staying -- is investing in dublin and
netherlands. andrew: we are not direct investors in the property market. in general, we think growth across europe next year is going to be moderate, somewhere in the region of 1%. that's ok. it's not great, but it's ok. so i would say, you know, we are thinking about europe in the slow, low growth. inflation remains very low and interest rates remain very, very low. to the extent that they provide support the things at the property market, certainly i would understand why he would come up with that view. thank you so much for joining us on the program. bank presidentl mario draghi, we have headlines parsing the -- crossing the bloomberg, saying that the ecb is sensitive to german savers'
concerns. the ecb policy is not the main factor in low bank profitability. but he sees no overheating in the euro area or german economies. that theying earlier ecb must allow to develop the full impact. he also made comments on structural reform, saying they are actually needed to lift rates from the lower bound. it is the lower equilibrium rate that has caused the ecb to adopt negative rates. keep -- key buzzwords we are all talking about at the moment. those were comments from mario draghi. this is bloomberg. ♪
>> this is the european close on bloomberg markets. nie: coming up on the european close, where headed back to the bloomberg markets most influential stage in the financial world. we will be focusing on m&a post brexit. i now, tom keene is hosting a panel of the future of emerging markets and investing. you can watch all of this live on the bloomberg lied go, streaming all day at bloomberg.com. for those of you wore not
vonnie: live from london and new york, i am vonnie quinn. cehic.and i am nejra time to look at the biggest stories on the news right now. touch a has agreed to buy independent british delivery service u.k. mail group. the price is $316 million, not including debt. a will boost its presence in market dominated by royal mail. the pair to british airways has agreed to set up a joint business with its largest shareholder qatar airways. the two will share revenue and costs on services between london and ohio. -- and doha. lukewarm give a
war, financial events, here's warren buffett from tonight's episode. warren: i don't think also living in standard of living are synonymous. i get to eat what i want to ee. i get to live where want to live. i get to drive the car want to drive and all of that. it uses up some money but, if i spent 10 times as much or a hundred times as much on it, i would not be a happier or send nor what i live a better life. innie: be sure to tune tonight at 8:00 p.m. eastern only on bloomberg. bloombergack to markets most influential summit. headng with the [indiscernible] let's listen in. >> if you look at the number of deals, it is only down 7%. and the headlines come much more from the higher than $10 million deal.
activity itself is pretty robust and more than i would have expected, sitting at the end of a15, which is mega-blockbuster year. the drivers of m&a continue to be very solid, whether the need for organic growth, not having the tools in your toolkit that t that organic growth, and for deals. the megadeals, first, a lot of them got done. second, many were attempted that were either turned down or governments stop them. attempted deals but withdrawn, that $750 million . where ashley higher than last year. so it's a little bit of, you know, a combination of the two. >> what are your views?
it feels like when companies do acquisitions, investors reward them. it is not just the cell side. sometimes the -- not just they sell side. sometimes the buy side. thatwill take a little your question because 2016 looks a lot like to 14. it is uncanny, both in terms of the volume in the composition of that volume, almost by industry group. in 2014 was a pretty active year. really starts to look like an outlier in terms of a trend line. anemic orink it is slow or messaging for the markets. that'sthink the backhand the backend in the last quarter of 2015 was remarkable. those were once-in-a-lifetime
type transactions. you have to think about your own organization and what is going on around you. anu mentioned the regulatory fees. you know they've been active the last two years of this administration and that's really gives boardrooms pause. another real tory environment because that has been a big issue in m&a. a couple of sector slower than people thought, you and i talked about this a couple of days ago. banking in the big space. is that because of the stress tests are the big -- the too big to fail -- companies don't want to be too big to fail? what is the reason we are seeing bigger bank deals? >> at the beginning of the year or even for a few years, non-distressed bank deals, people were waiting to see if the hudson city deal was going to be approved. was thethe hudson city
deal that was outstanding for the longest period of time. that doesn't help when you have the type of regulatory uncertainty or you don't know whether the deal is going to go through or not and it places stress on the company. this year, we have seen good company deals. been very little activity in that space, which historically has been a big part of the m&a volumes. with size limitations, with the increased regulatory requirements the banks have, when the bar for doing m&a transaction is much higher than it was three 2008. >> i know you spent a lot of time in this space, the energy area, oil and gas. 2014,sly coming late 2015, the price of a barrel of oil collapsed to $20 or $30. it has come back a little bit
this year, and i thought that would lead to more m&a. but there hasn't been in the energy space. why has that twice that? >> i have a little bit of a -- why is that? >> i have a little bit of a different view. scarlet: we are watching bloomberg markets. we want to welcome our global audience. now, we are listening to talk tear dealmakers from goldman sachs. let's listen in. >> you put all of that in the same bag and that volume is up 2% year on year. the one thats everyone focuses on because of the price of oil and is probably the most tangible. if you look at the downstream part of it, that business has been really strong. >> does the price of a barrel of