Lets check quickly on the markets. If you look at the markets, and a lot of them are looking at the concerning news or news brexit is going to weigh markets were hoping. The stocks european 600, down and the pound, looking to see if there is any swing on that. 1. 3243. Lets get to the first word news with leighann gerrans. A british official says brexit talks need to show progress by tonight if they are to continue. European unions chief negotiator is said to have denied any breakthrough on the issue of fishing license. Boris johnson is due to speak with the Commission President ursula von der leyen. Donald trump says his personal lawyer Rudy Giuliani has tested positive for coronavirus. The New York Times says the 76yearold was admitted to hospital yesterday. The president wished him well. Giulianis son tweeted his well. Is feeling the u. S. Is said to be ready to sanction more chinese officials over the role of the recent disqualification of hong kong legislators. Familiar,to people the latest round of sanctions could be rolled out today with as many as 40 people reported affected. Joe biden has picked hobby or becerra has his health and Human Services secretary. He would lead efforts to curb the pandemic and strengthen the Affordable Care act. The president elects priorities will likely include expanding toting, improving access ppe, and distributing a vaccine. Would be the first latino to lead the agency. Goldman sachs is weighing plans for one of its key divisions. Executives are scouting Office Locations in the south with a view to relocating Asset Management arm. To newd be a blow yorkss stature as the home of the u. S. Financial services industry. Global news 24 hours a day, onair and quicktake by bloomberg, powered by more than 2700 journalists and analysts in. Ore than 120 countries im leighann gerrans. This is bloomberg. Francine thank you so much. Lets get the latest on the pandemic and the global economy. Virus numbers rise with President Trump saying his lawyer has tested positive. The Administration Says all americans who want a vaccine should be able to have won by the middle of next year as several states that infection records. The u. K. Is said to be rolling out the vaccine tomorrow so is their light at the end of the tunnel and what does it mean for markets . Joining us now for an exclusive conversation is the chairman of. Bs, axel weber thank you for giving a little of your time to bloomberg. Vaccine and how quickly we got to a vaccine and probably have three viable vaccines right now, what does it mean for the economy . Will we see a boost from the vaccine or is it just the scarring we could have expected will be tempered somewhat . Axel i think it is a bit of both. Thank you for having me. New forecasts and we have turned our optimistic scenario into and remain shows you most of the forecasts are heading into a better direction, but im continuously warning that what the outlook is while the outlook is somewhat better, we will not get out of this very quickly. We expect to get close to herd immunity sometime during 2021 for the Major Economies, which means the two vaccines that have shown to be very effective, plus the immunization that comes from those recovered is going to help us come down to very low numbers of new cases, and that will change the mood in the economy, so we expect a pretty strong rebound. It depends on other things. In the u. S. , it depends on the size of the fiscal package. Are expecting the midsize package around 480 billion than the one trillion. There are signs in both directions, but this will take a long time for things to go back to normal. It will only be next year in some of the Major Economies where we go back to precrisis levels of gdp and it will be a long haul to go to precrisis growth path and unemployment to come down. No quick fix here. Francine what does it mean for the kind of rebound we will get . Can it be sooner than expected and deeper rebound . What does that mean for markets . Have they gotten ahead of themselves . Axel what markets are pricing in, the endpoint of the trajectory we see, we expect a strong rebound in the u. S. 3. 9 pect under 4 growth, reported in 2021 and 3. 8 in 2022, but the point is, these are average projections. There are many upsides and many downsides around these projections. At the moment, it is not sufficient to focus on forecasts alone. You need to think scenarios. It could be the rollout of the vaccine or the production is delayed, there is less acceptance for vaccination in the public. There are many unknowns to look into and i morning against focusing too much on your average projection. We really need to think in scenarios and there is downside in the u. S. Particular around whether there will be a divided senate. Ratic and quitewns still, an uncertain outlook, but a better outlook than a couple of weeks ago. Francine you have a new chief executive at ubs. How is he settling in . Any points to focus on or change the direction in ubs . Axel i think like every time, im a Firm Believer that somebody whos coming to the job hes doing a fantastic job, settling in with the team very well. They have many interactions with the board. The board to the whole new dimension in the theme team and we will bank on that. What we are seeing is, their take in a close look at the various businesses because we are at a junction in the road. Like in the financial crisis, part of what we have seen over the past couple of months will stay there for much longer than anticipated, and you need to look at the bank and its profile in a postcovid environment. Will we do as well as recent years . That is what the team does. Roughly 100 days or so to look into various aspects of the strategy. The board and management are focused on that. We will probably come out with a strategy and announcement with our First Quarter results were shortly thereafter, but this is something that requires a reasonably intensive look and which requires time. I live by the rule that everyone on a new job has 100 days to sort out what he wants to do before we make big announcements around that. Thate getting ourselves time to look into things and you will hear from us around the First Quarter on what the future direction of travel will be. We are needing a rush to change things, because weve had a pretty good year not in a rush to change things because we had a pretty good year. We are doing well, but we need to prepare the bank for the future and the more distant future and there will be some impact of covid, not just in the short run, but longerlasting and thats what we are focusing on. Francine Credit Suisses departing chairman intimated there could be a deal in the cards between Credit Suisse and ubs. With such a deal makes sense to you . Axel well, look, weve had that discussion in the media for some while now. I would say two things. First, Europe Clearly is ahead of the wave of consolidation in the banking scene. When i say europe, i mean in the eurozone and basically the european union, because that is the Single Market and the banking market is still fragmented, so mergers among major european banks to get a holistic access to the entire market does make a lot of sense. I expect some dynamics. On the domestic front, we are a strong bank. Credit suisse has done well. Switzerland as a country has come through. Two domestic banks talk mergers but they are hard to implement. This is a very unusual time, very high uncertainty and in such a highly uncertain environment, such talks would be much more difficult. I dont expect these things to happen at the current juncture. I think this will be a thing people will talk about for years to come before we see any concrete movement. The ones driving the consolidation are the ones that have problems. Neither ubs nor Credit Suisse are in that area, so i think this is not going to be something that you see any news from switzerland anytime soon. We had two new managements, the chairman over there is changing, my term is nearing an end. This is not the time to go into questions like that. Francine your term is coming to an end, but will you try to stay on . Axel no, im pretty clearly determined. Ive done this job 10 years. Krauthammers is the first of a generation to change at the top on ae bank and sergio left fantastic high note. Im wired the same way. It is good to go when things go well and a decade at the helm is a good time. In the u k, it is regulated that every seven years, there need to be changes at the top of the board so i feel a decade is a good time. Ill be around, but probably time to pass the bank up to the next generation at some point. Talking about a brexit deal, what is the hope for Financial Services at this late stage . Financial services really isnt part of the discussion here. Weve had trade and the new relationship with the eu. Questions like switzerland has with the eu for many years. Who will call the shots when there is a dispute between the u. K. And eu . A difficult discussion in switzerland and i do not expect a less difficult discussion in the u. K. , if im honest. Francine but will we get a deal . Axel i think in the end, both sides will come to an agreement. It will be more a transactional deal and whatever is agreed to will be subject to review at highfrequency annually. Take financial markets. If a union like switzerland gets agreement on equivalence, because the u. K. Is super equivalent in every dimension, but that is only a snapshot. As soon as the u. K. Uses its freedom and changes the laws for financial institutions, it will be reviewed by the union and switzerland has lost its equivalents for the stock exchange, not because of anything happening in switzerland or the eu, but equivalents judgments are a political judgment, and granting of Market Access by the european union. It is not a reliable twoway contract that can be enforced by either side. It really is a onesided benefit granted by the union and can be withdrawn at the discretion of the union without really going into a deep discussion of why that is. , the ubs axel weber chairman stays with us. We will talk more about brexit and may be about policies and crossborder consolidations. I havent asked axel weber about that for two weeks. Changing of the guard at ubs. More with the lenders chair, axel weber, next. This is bloomberg. Francine economics, finance, and politics. This is bloomberg surveillance. Im Francine Lacqua in london. Lets get back to our conversation with axel weber, chairman of ubs. Thank you for staying with us. We talked about consolidation within switzerland. What would it take for crossborder consolidation in europe to happen . Axel i think what europeans need to acknowledge is the way they tried it so far to get a Banking Union has worked hasnt worked. We are still quarreling about insurance, still dont have a Capital Union and ive been arguing that what europe needs is a think tank at the talk big bank at the top. It needs a new legislation that creates a European League of banks that can operate across the european union. Pretty much what the United States did with the National Banking act. Mind you, that was in 1863, so europe needs to have its european moment for the Banking Union and Capital Markets union and that can only happen if there are european rules, european regulation, european supervision, european deposit insurance and you and only need that for the most global banks. You dont need that for saving and corporate banks in germany. , the a deal breaker differentiation across the union that needs to be revisited. Why should a German Savings Bank become european . They should be regulated as a european bank, but there is room to maneuver for local rules, but truly european banks need european rules. Ubs in europe,s 27 banking licenses and 28 supervisor on top. We are working from a piece of paper that has 27 lines drawn across it and we try to make a plan on how to deal with all our clients across the union. You wouldnt start such a system if it wasnt historical, so you really need to reset now. Francine what does it mean for acquisitions for ubs Going Forward . Is there something that would make sense for ubs, or do you want to more focus in europe or on the u. S. Market . Axel for us, im afraid to say that for ubs, the most important part is our home market, the u. S. And asia. Our fourth market we focus on and we are largely a Wealth Management. Because they and are more institutional especially the Investment Banking, we have more flexible rules across europe than others. We focused strongly on getting our business in the u. S. Going further. For us, the competition with u. S. Banks as a Global Leader in Wealth Management is really the number one focus we have. Is a great doorstep market for us from switzerland, but we are not a european in the sense of Eurozone Bank and therefore, the focus for us is more on asia and china on the one hand side and the u. S. Business and addition to the domestic business. Outlook forr your the investment bank, how is your pipeline looking compared to a year ago . Axel we had we basically exceeded even the most optimistic forecasts for the investment bank, but let me remind you a large part of ubs profitability and income comes from the areas i mentioned. The Asset Management and Wealth Management business is over 50 of our return. What we tried to do over the decoupled years is somewhat from the volatility of Investment Banking returns by putting a larger focus on asset and Wealth Management and on the profitable domestic market. Weve succeeded in doing that and have seen that pay off in the Financial Results since covid has started, so it looks to us to be the right way and what we need to do is accelerate now further to really accelerate the Digital Transformation of the bank, to bring digital frontendo the client in wealth and Asset Management because with covid, the one thing wealthy clients didnt do much is meet their client advisors facetoface. We have moved to a more Digital Offering but can improve the Digital Offering and that is what we are focusing. Is the new hamers ceo, that is his focus, to accelerate delivery of services. Francine given what we are living through, hanging onto your top performers should be a priority, how do you do that in a pandemic . Many ofsically because our clients have been with us for generations. The second advantage we are seeing with switzerland doing much better on the pandemic numbers, but on the economy. We know there is an inverse relationship between the severity of the lockdown and Economic Performance and switzerland has very good numbers to start with, so we havent seen any large increase in credit expenses on the domestic front. It is trickling in, but low compared to european banks and the swiss economy to hold up quite well. Most of our lending, or junk part, 50 roughly is to our wealthiest clients. Collateral lending, where they borrow against assets, Central Banks have intervened so massively in the market. Most markets are up, the value of assets hasnt really severed suffered. Weve been holding up pretty well given the circumstances because of the specific shape of our business and our credit exposures either to the swiss market or to wealthy clients, whose portfolios have been strong. So far, im quite pleased with the way weve dealt so far with the crisis at ubs. Francine axel weber, thank you for your time and insight. The ubs chairman joining us this morning. Later on bloomberg surveillance, we speak to the london mayor and ask him about brexit, covid, and lockdowns at 11 00 a. M. London time. This is bloomberg. Francine this is bloomberg surveillance. Im Francine Lacqua in london. This week, the you ks nhs rollout the new vaccine, the ecb will meet thursday and eu leaders will meet in brussels thursday and friday. They will likely talk about the approval of the next budget, the ratification of the 2030 climate goals, and about brexit. Is a brexit breakthrough possible . Michel barnier denies progress on fish, while the council says Boris Johnson is ready to walk away. We will be live from brussels. We heard axa labor say he wasnt expecting a deal by the weekend, but he thinks there will be a deal. Time, each side talking to their constituencies. Cable, 1. 3 233. This is bloomberg. The usual gifts are just not going to cut it. We have to find something else. Good luck what does that mean . We are doomed. [laughter] thats it. I figured it out were going to give togetherness. That sounds dumb. Were going to take all those Family Moments and package them. Hmm. [laughing] that works. Francine economics, finance, politics. This is bloomberg surveillance. Im Francine Lacqua, here in london. Brexit negotiators are striving to finalize a deal by this evening after resuming talks yesterday. 27a meeting with the blocks members, Michel Barnier threw cold water on news of fisheries. Boris johnson is