Ease some of the Capital Buffers as well, potentially some of the u. S. Banks. We know again this is not a financial crisis, this is more of an exhaustion us shock. So letting the banks perhaps ease up on some of these roles to make sure they can get loans out to people who need them, certainly perhaps a smart idea. Ofncine yeah, i think a lot policymakers are just worried over what is essentially a Health Crisis that will turn into a financial crisis as they are trying to give loans and credit to Small Businesses that need it. I am looking forward to an interview with the treasury people in charge in the u. K. About the stimulus they put out yesterday lets get to first word news in new york city with viviana hurtado. Viviana we begin with the Trump Administration pushing a one point 2 trillion stimulus plan. This to counter the Economic Impact of coronavirus. Bloomberg has learned americans could get direct payment of 1000 or more within two weeks. A month later, a second set of checks could be sent out. U. S. Treasury secretary Steven Mnuchin warning republican senators if there is no stemless package, the u. S. Could face a 20 unemployment rate. Over to the u. K. , Prime MinisterBoris Johnson said his government is acting like it is wartime. 424 billion in loan grants and tax cuts, to keep the coronavirus from wrecking the economy. Plus, the bank availing and that the bank of england will set up joe biden is tightening his grip on the race for the democratic president ial nomination. Yesterday he swept all three primaries arizona, florida, illinois. Now the former Vice President has more than half the 2000 or so delegates he needs for the nomination. He also has a 284 delegate lead over Bernie Sanders. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, viviana hurtado. This is bloomberg. Taylor . Francine . Anna viviana, thank asked francine viviana, thank you so much. Looking at the news over the last couple of weeks, i think this is the fourth time this has happened. Futures declining along with european stocks, tracing some of the moves from a day earlier. Treasury yields are continuing to climb. Traders are trying to figure out if the fiscal and monetary stimulus is enough to counter effecting the impact of coronavirus, oil dropping to a 17year low. Taylor it is interesting, the technicals of the market. I think we have all learned what Circuit Breaker limits are. Within the futures market, that limit down 5 per that is when you check the sp y, which is ck the sp y, which is we would remain trading at these levels, but nonetheless, like you said, perhaps the futures market, if we get down to 5 , that is when we would start to look at the sp y, which is the etf that tracks the s p 500. Elsewhere, it does not look like another good story for crude. Take a look at that. We are down more than 2 on crude, with a 26 handle, but we are getting a lift in yield, just nine days ago, that 30 year yield in the u. S. Was below 1 . One point 80. We have climbed 80 basis points in nine days. We are still at 1. 80. Wheres climbing 80 basis points and nine days. Lets get straight to 1 taylor lets get to one of the strong us voices out there, when it comes to the Financial Rescue packages we saw in 2008. Were wondering if there is a worry that we are seeing the same again. We are joined by howard davis, the chairman of that Howard Davies, chairman of rbs. When you look at what has happened over the last couple of weeks, i dont know if you are looking at a recession we were speaking with mervyn king yesterday. He said this is the wrong kind of language. We need to look at temporary halts in the economy, and whether you think it will get better with time or unless monetary stimulus comes out full force, it will turn ugly. Howard i dont want to disagree his usevyn king, with of language where he is an expert. Weo fear that that is where are headed, certainly the First Quarter i think is going to be very difficult. But i think he is right, that it is not a conventional recession, which typically arises either indebtedness and enthusiasm in financial markets, whether there is a correction, we are not in that position. It is largely a supplyside shock rate but nonetheless, it is going quickly to have the natural consequences. At the moment, from a bank perspective, we are in a sort of phony war where we expect the invaders to arrive but they have not quite turned up yet e just at the moment the economy as of two or three days ago, was fine. So we are gearing up for a wave of requests for financial but it and forbearance, has not crashed over us yet. Francine sir howard, what is the weak link in the economy right now . We have a lot of countries saying they will transport small and mediumsized enterprises, germany saying they will let ask have capital buffer to weather the fallout from the virus. Is there a worry about liquidity . Is there something you look at saying policymakers and governments are not doing enough on . Howard until yesterday, my answer to you would have been the commercial paper market, by the end of last week was seriously broken. That has been corrected by both the fed and the bank of england saying that they will buy commercial paper. Apart from that, i think where you have got to look for worry is bank credit. Because as we know, the squeeze on banks with additional capital, banks have had to have, the growth in credit has been to quickly in the nonbank sector. Some of the neobanks, if you would like, lenders, money market funds in the u. S. , that is an area where we have to look carefully because all they the banks because although the banks are strongly capitalized, in some cases outside the banking system, there could be difficulty. That is an area i have been concerned about at the moment. And then i would say it is going to be just a spending gap, where a lot of people get laid off quite quickly. And then you will discover, in the famous Warren Buffett phrase, when the tide goes out, you will discover who has been swimming naked, and we will find out if there are companies that have been running with very small financial cushions. A the moment, i dont see straightforward liquidity problem in the sense that the banks can extend credit. The difficulty we will have is whether we are extending credit to people who are a liquid, fundamentally viable companies, or if there are companies who will be insolvent as a result of the slightest downturn, and there will be bankruptcies, im quite sure. Taylor it is interesting that we get the shock and awe yesterday in the u. S. , with a 1. 2 trillion stimulus package, and yet futures down this morning for percent, 5 in the 4 , 5 in the u. S. Is it enough . Howard my own hunch is that the consequences for spending are going to be greater, and therefore our government is saying this may not be the end, we may need to do a lot more, and i think they are very wise to do that. That is something that i am sure that we will have higher financial crisis higher financial consequences for governments. Particularly, there is a problem in the euro zone, where we are seeing spreads widening in the euro zone, some countries getting into much more difficulty than others. That is a tension i think people need to watch carefully. Taylor what is most effective . As you dive into the details, the devil is in the details there a 1000 check, payroll tax, bailing out the airlines what is the most effective form of stimulus . Dependswell, i think it place to place. If you are talking about companies, i think debt holidays, if you like, is probably the most important thing. Tax holidays we have here very large tax payments due at the end of this quarter. And the government have not yet done this, but i suspect that they may be looking now at whether they should extend dates for those taxes to give people more liquidity. But individuals, i think the problem is going to be to identify those people whose earnings will fall very sharply, and where there may be a gap before the benefit system kicks in. Here as in most developed countries, we have a benefit system which ought to kick in, but we know there are dangerous lags in it. In those circumstances, we could have a situation where spending falls very sharply shortterm because the benefit system cannot catch up. In the u. S. , i can see given the benefit system being much less welldeveloped, you have to go to a blunt instrument of just giving people cash. Here i think we should be working to make sure that the benefit system kicks into action extremely rapidly. You so much, sir harry davies, the rbs chairman. U. K. Sir Howard Davies, the rbs chairman. To the measures in the u. K. Go far enough . We will ask stephen barclay, chief secretary treasury about what more they can do, and the consequences of that on brexit. This is bloomberg. Taylor this is bloomberg surveillance francine this is bloomberg surveillance, taylor and francine from new york and london. We are at home today lets look at some of the measures put in place, lack of measures put in place. The European Central bank, after a pretty difficult press conference last thursday, saying in its was unanimous analysis that additional measures could be put in place, and if you look at the market the 10n, italian bonds, year yield surging to 50 basis points, around 2. 90. We are back with sir Howard Davies, chairman at the royal bank of scotland. If you look at the eurozone at whole, we are seeing spreads widening unlikely not unlike the eurozone crisis. Could this be much worse . Howard i think the euro zone is very worrying at the moment here at at least tight coordination between the bank of england and the treasury, which helps in these situations. In the euro zone, as we have all known, the problem is that euros on finance minister, whom the ecb can coordinate, that is very evident. There is a flaw at the heart of the eurozone. What we are now seeing is the spreads widening, not helped by a slight misstep last week by the ecb in terms of saying it is not our responsibility, but i think you are seeing a very dangerous sign of once again a kind of twotier eurozone appearing, with spreads widening in italy in particular, and therefore likely to increase the italian deficit even more, with the northern countries no doubt increasing their deficits, but nothing as much. Once again, tensions are rising in the euro zone. I think we will look back and say that the proposals that i think macron will come out of this looking quite good, to strengthen the Fiscal Center of the eurozone, but people continue to argue and nothing was done. We will look back and see that was a really big mistake, and i think in the meantime, the only thing the ecb can do probably is to buy more italian bonds. They have a limit on one proportion of bonds they can buy, but i suspect that limit will have to go if they want to maintain the euro zone. When you look at brexit, how does this impact brexit . I dont know whether you can negotiate, if you cannot do it in person because of the coronavirus. There is a deadline, so does it automatically get pushed back . It is up to the pie minister, at i dont know what the dynamics are it is is it up to the Prime Minister . I dont know what the dynamics are. Howard i am one of those that made no secret of saying lets call the whole thing off. I dont think the government is going to do that. They have a clear mandate to pursue this. But it does look as if negotiating a complex future trading relationship in these circumstances, where the teams cannot even meet is going to be extremely difficult. Government, i would take a pragmatic course and say the destination remains clear but we are going to have to take a bit more time, they will have to eat some words in saying that. I suspect that is where they will get to. Taylor sir Howard Davies, rbs chairman, he does stay with us. If you have bloomberg, check out tv for our interviews and live events. Click on our charts and interact with us directly. Click on tv. This is bloomberg. Do whatever it takes to sue our economy. I dont have a claim to history saying whatever it takes. Number two, i would really like all of us to join forces. We are ready to adapt and do whatever we have to. The public can be sure of that. Sentiment before fiscal year end was needed. Are fight against the virus and outside force beyond our control that is wreaking havoc around the globe. Mr. Speaker, we are up to this fight. Francine yesterday pie minister Boris Johnson announcing a primeescue package minister Boris Johnson announcing a massive rescue package, in an attempt to stop the coronavirus from affecting the economy too much. The Prime Minister saying they would do quite a lot. Joining us now is steve barklay, thank you so much for joining us on such an important day were a lot of enterprises are looking at us, worrying about their future. The government has laid out quite an extensive package of measures, but a lot of businesses are saying more is needed. Will there be more direct assistance to them if needed, not just loans . Stephen the chancellor has been very clear that we will do whatever it takes, but as you correctly say, this was a major set of measures yesterday. 330 billion pounds of loans, but also targeted measures in terms smes in, so grants to particular, and also flicked ability and support on tax. For example, blue removing does this rates from the for example, removing Business Rates from hospitals and others. Working closely with the bank of england, taking measures to support our businesses in the weeks and months ahead. That the could you say government would also look at being the buyer of last resort for every business in the country . Stephen well, we think the best way to support people through this time is by supporting businesses and keeping people in their jobs, and that is really what is at the heart of the package yesterday. It has been well received by Business Leaders. As the chancellor said, we will do whatever it takes and we are in discussions with trade unions and business groups in terms of what further measures may be required. We are in discussion with the transport secretary the transport secretary is in discussion with them today and we will continue to take measures as required. Francine there was assistance to homeowners announced yesterday. What about people who rent . Will they see measures, and how quickly will you announce them . Stephen you are right. Working with the industry was a threemonth mortgage break, and we also recognize, as your question says, that for many people who rent, that is often their biggest cost, and the housing secretary will be making further announcements on that. We do recognize there is an issue in terms of rent. We are looking at that very actively. But again, the best way to help renters is to keep them in their jobs, and that is why the package yesterday, the 330 billion pounds, was to provide a bridge for viable businesses, successful businesses, for the coronavirus. They will be successful and viable businesses after we have overcome this virus, and we need to help them particularly with their cash flow over the weeks and months ahead. Actually thanyou can you actually ban evictions because of late rent or unpaid rent . Stephen we need to look at what the best package of support is, and the best way to avoid people being under pressure in terms of housing is by supporting the business community, supporting them in their work. And if they do need to rely on the safety net, then we begin taking measures both in the budget and more recently to support people in terms of making it much easier to access, quicker to access greater flex ability in terms of the in terms of those accessing welfare. The key is how do we take coordinated effort with the bank of england, looking across government into specific sectors. What is best targeted to the needs, providing overcoming challenges, and the package yesterday was part of a concerted effort building on the 30 billion fiscal stimulus that we set out, a billion of which was to support not just Public Services but also individuals and businesses. We built on that with packages yesterday. The chancellor was very clear, we will continue to look at what is required and we will take what measures are necessary. What does this mean for brexit negotiation . Given the sheer amount of effort, time, and a lot of these packages coming from the u. K. And the e. U. , do you see a postponement to negotiations and therefore a delay to actually getting out of the e. U. By the end of the year if necessary . Negotiatorsw, the no, the negotiators will continue their response within the treasury, we are looking at how we ensure we get the right support. David frost and his team will continue their decisions with commission colleagues. Francine i think the two sides this week could not get away with the videoconference. Do you think there will be a delay . Stephen as i say, that is for david frost and his team to take forward, and a huge amount can be done in terms of videoconferencing and other ways of taking that forward. The key challenge now as we address coronavirus is how do we support our businesses. We recognize particularly in certain sectors those pressures are acute, so we are working very closely with the bank of england, working to make sure we get the right package of measures in, and we will do whatever it takes to support those businesses. Barclay, and, mr. A lot of businesses have spoken to you since the package was announced yesterday. What are they telling you . We have heard that some chief executives are worried that this virus gets compounded by leaving the e. U. Without a trade deal. How can you reassure them on that . Stephen i think the key message we got from businesses ahead of ofs was the challenge, one cash flow, and the package yesterday, the response we have had from Business Leaders since that was announced by the Prime Minister, the chancellor last night, has been an extremely positive one. The measures were widely welcomed. We recognize we need to continue those discussions, and that is exactly what we are doing. Do you worry