Popular. That is more than that it was anticipating. That is getting close to the true price. How will shareholders react . Washington watch. Just session Jeff Sessions has suggested he may resign with a widening rift with the president. This is as James Comey Testifies in front of the senate tomorrow. Huge breakinga story, it is as if someone splashed the news with the bucket of ice water. Santander is buying popular for one euro. They will raise 7 billion euros of capital. We will continue to pay keep on top of the story. Futures are down across the board although the ftse futures are little changed. If you look at the miss price calculation by bloomberg, it is not look nearly that bad. Take a look also at the bund t rade. Investors selling off bunds, driving up the euro, the bund trade still at a very low although the yield rising still at a very low level. It will be fascinating to see how santander trades today. I am trying to figure out, get to the bottom of what is happening in terms of how they are classified in the deal. What the value is there. The popular shares are suspended as we have been talking about. I am suspecting they will trade but we will see. Off fromequities are yesterday. The u. S. Dollar is trading fairly flat. The aussie dollar which is trading up by. 4 of 1 . Byis the story dominated what is happening in the u. K. And also what is happening in european banking. The ecb, thursday will be an important day for the ecb. Lets get a bloomberg first word news update. Heres juliette saly. Juliette u. K. Premised or theresa may said she would be willing to tear up human rights legislation and the battle against terrorists. Germany corbyn set the correct response was to invest in the police and Security Services while protecting Democratic Values including the human rights act, security continues to dominate the general election with one day to go before polling day. Attorney general seth Jeff Sessions it does has suggested he might resign because of a widening rift with donald trump. Hisas come under fire for recusal of an investigation of russian meddling. Spicer would not say whether trump still has confidence in sessions. Fbi fired fbi director james comey will describe conversations with donald trump stop short of saying the president sought to obstruct a probe into russias role in that election. He has coordinated his testimony to the Senate Intelligence committee with robert mueller, another fbi chief who is special counsel in charge of the rush investigation. In the middle east the biggest oil and container ports have banned all vessels sailing to and from qatar. A different crisis gripping the main energy exporting region. Saudi arabia and bahraini officials have closed their ports coming to or from the persian gulf state. Terminals also banter traffic to any ships touching qatar. The austrian dollar, firstquarter gdp came in above expectations. The economy expanded from a year earlier and. 3 of a percent on the quarter. The rba signal yesterday it would look through slower First Quarter growth when it left the bench mate benchmark rate on hold saying it expects the pace to accelerate in the next couple of years. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. Bloomberg. Guy thank you very much indeed. The story still unfolding and we are getting details emerging of how different assets will be treated. Santander is to raise capital as it acquires struggling popular. It was failing or likely to fail due to significant deterioration of its liquidity situation in recent days. Lets get details from spain on this. We are joined by our bloomberg spent reporter. Lets deal with what is happening to popular. Everything is being written down to zero. So shares and tear when assets are being written down to zero. To assets are being written down to one euro. Chunk, is a big presumably santander does not have to absorb. Roderigo that is correct. That seems to be the case. Were not sure how this works up at what we know so far is that there was a lot of concern i the government and the eu to find a solution for this and there was some kind of auction according to what santander said at the firm which takes care of bad banks. They decided that this was the best resolution for someone to take over the bank which was santander. Are is this good news, we getting word that she expects santander to achieve a 25 market share in spain. Says, the press release says this will make santander the biggest bank in spain and portugal. By several metrics. The biggest retail bank in spain isn you look at only spain [inaudible] whether the markets perceive it that way we will see in a few minutes. Santander is having a call with investors and im sure that will be one of the questions it has to be answered, how people see this area did there is a lot of questions. There is no fixed answer. Guy lets address what we are acquiring here. Youre picking up the deposit base which should be a fairly straightforward exercise but you are also picking up a portfolio of property. The legacy story surrounding this Property Portfolio will be where the questions lie. How concerning will that be for shareholders . Roderigo that is the biggest concern. In general, the spanish Banking Sector did a good job of cleaning up their game, cleaning up their real estate portfolio over the last two years following the crisis. The one big exception has been popular. Maybe because it came in later or how the bank was handled. It has a very strong sme business and Retail Business which is what santander wants. Question is one that they were not able to solve. Everybody will have to wonder if santander can solve it. They probably have a plan. How is the Retail Business been affected by this. Ould assume even in informed customers do not feel so comfortable having a lot of their money in that bank. Roderigo. They do not and there has been a drop, a consistent drop over the last few months in the number of deposits and the chairman has been going out of his way to push his staff to convince people that the bank is doing well, that the bank can handle their money and he has been trying to convince his people to stay at the bank and to go on with business as normal. Informedy, even account holders are concerned about the bank get it has been affecting them, obviously. Guy one final quick question. How did this happen . I am curious as to the politics surrounding this. Was this something that you think has been imposed upon santander, did santander do it willingly or was it something and the came from madrid the politics and saying we need this done . At theo if you look spanish Banking Sector traditionally and santander there has been always a strong relationship between politics and the Banking Sector and has always been open to these kinds of pressures you are pointing out. The relationship changed event. It is not exactly the same as it was 10 years ago when the answer would have been a straightforward yes, this is political pressure. That said, the government was extreme and concerned about the situation and the eu showed some concern. There has been a lot of talk in the government with the entities to try to find a solution. Obviously, they got into this money and thees bank. Has the been political question pressure . Al yes. Has she bought it because of political pressure . I doubt it. Guy thank you for joining us. We will see what happens with santander and popular. The shares are suspended. Fors an interesting toy hours, 48 hours. We have a lot still coming up. The spanish banking story and there is a italian banking story surrounding some of the phoenician banks. Just keep an eye on what is happening there. There is a reluctance to add to risk positions, i would argue the ecb, you have the election, the yen trading near its highest level in months while gold is holding on to a gain. I want to prevent from the banks more broadly into the risk story. Trade this year, the surprise trade has been to be positive on europe. Do you think the fact that europe is having banking problems may slightly take away from that trade question market may reintroduce a little bit of caution into some of those positions. Mark definitely it will remind people that europe has a major banking issue and as you mentioned it is more iffy than in spain. If you want to look at more positively it is great this deal has gone through in a time of exuberance. This has been sorted out to the private sector, not through the government sector. There has been a private sector solution with no state aid and that is important. This deal has been at a good time for europe and it has been in a good way and that is a positive message. It reminds people that the italian situation has not been sorted at and that remains in the background and it will rear its head again. Guy does this change the attitude toward what mario draghi says tomorrow question market does reinforce the issue that banks are a problem. You wonder whether or not given the fact that we have an election before may next year in italy, whether or not mario draghi is prepared to change about or giving hints changing course. Isk i do not think draghi forgetting about the italian banking system. He is italian, he is aware of that facet he needs to deal with. He sounded quite dovish and there is speculation there might be a hawkish twist or a less dovish twist. Clear line give a for tapering. He will say it is a dissent a issue to discuss. Overall i think he is pretty dovish because he knows that italy is not sorted. It is an immense problem, not just the banking issue but the election as well. Guy always a pressure pleasure. At mliv. Around key events. For instance, the u. K. Election. Forget projections putting labor within spitting distance of conservatives. Fearing the loss of dozens of seats. Britain coast to the polls tomorrow. Youth turnout looks like it will be key. Anna edwards is in westminster. Anna thank you. We will get to some of those great themes in our conversations this morning. We will have a conversation about Financial Services and what it wants to see for the next government. Us greatic has joined to have you on the program. Let me start from asking you what you want to see from the election. On the face we have Jeremy Corbyn who likes to talk about greedy bankers, theresa may who wants to say that brexit means brexit and is talking tough on immigration. You thing any do you see anything the Banking Sector gets excited about . Miles it is clear that whoever gets into power, we will make sure that the economy continues to work. If you look at trade surplus we generate more trade surplus than trade surplus generating parts of the economy. We generate sound at one billion pounds worth of tax revenue from the Financial Services element of that ecosystem. Article issue is making sure that is understood i whoever comes into parliament. The role of the industry plays understood and incentivized and we get the right result from the brexit talks. , getting much of that brexit right, how much is there a clearing business . Ites there is no desire for , from amongst our members, from the people that use clearing and it is illogical. If you take it away from london why arent you taking it away from new york . It starts to look like a punishment agenda. Anna the risk is bigger, having such a large [inaudible] that londonreflects is successful. Anna you are expecting that logic is the only factor or suggesting it should be. Miles if there are moves to take it away that will be a political issue rather than a commercial issue or anything else. What we need to make sure is anything that happens in london has a risk application or applications in other parts of the world including europe is reflected the way we regulate and supervise. There is no commercial or economic logic in moving it away from london. Anna you talked to the government and lobbied on behalf of the industry. Have you been talking to other political leaders, other than the other parties you talk to regularly . Miles yes we do. We had a meeting with the labor Shadow Treasury Team led by john mcdonald. It is the leaders in scotland, wales who we meet regularly and Northern Ireland and the other side of the channel. , i was inbrussels berlin yesterday. There is an ongoing positive dialogue. Sectorsat with the response be if we did see what still seems to be not what is indicated by most of the polls, what with the reaction be . The decision of who will be elected is down to the british people. We have a track record of working with governments of whatever stripe and contribute in the uks success and we look forward continuing to do that. Anna a lot of the cities around europe want to eat the citys lunch. Are you impressed by any of the teams you have seen trying to lobby against you, trying to win your business like frankford, dublin . Miles i have not seen anybody who impresses me. Anna do you sense that . Miles there are attempts of people coming in and selling their wares but london is one of two genuinely international Financial Services. Of see a rise in the the third center in asia. If any jobs move from london that will depend on the nature of the final brexit deal. The first place they go is to the next International Financial center, new york area there is a trench where stocks are happening. The final tranche fractures and splinters across europe. There is no single obvious other International Financial sector. Anna thank you for your time this morning, good to have you here. Matt anna edwards there with the ceo of the city u. K. Were building up to the u. K. Election all day on tv go ahead and check it out. London dab Digital Radio will be building up to it here. Everything you need on boomer television and Bloomberg Radio concerning the u. K. Election. Tune in for our onehour special on thursday at 10 00 p. M. After the voting is finished. We will get instant analysis of the markets as exit polls are published. I believe we are putting the band back together for that one. Santander, the rescue, the spanish lender will pay one euro Banco Popular. What is the price here for the ceo . Well give you the stocks to watch next. The european open just nine minutes away. Guy welcome, 52 minutes past the hour. Where counting down to the european open. Santander am a they will raise 7 billion, that is a little high. We are talking about sentiment santanderover a taking over Banco Popular. One shares and tear to assets are being downgraded. It will be interesting to see what happens to trade. This is one of a number of this, i will assume these are converted. These are trading, the shares in popular are not trading. Will see exactly what happens. This would could be one of our better indicators in terms of what is going on here. Matt i will tell the viewing public that you are jeh johnson 87 at the burke and case they want to i am you. And at that it is interesting that the chairman of santander saying the capital increases fully underwritten. That is a very interesting headline we have got across the bloomberg terminal. A build some confidence, i would guess and she says santander the spanish of market. It is spain but that is still a good thing. There are some good News Headlines coming across that you may not have expected 15 minutes ago. In thethis unfolding last 54 minutes. Absolutely fascinating hour for financial news, for banking history as the single resolution board comes. Yesterday we were getting reports from the chairman of popular they did not need ecb help and in the last hour we find out the ecb has looked at the box and think the bank is going to fail. The single resolution board has brought in, they made the decision the shares are zero. Really fascinating string of events and the way it unfolded like a waterfall. Guy it will be amazing to see how this works way through. We have seen this work, we have seen this not work. The biggest take away is some of the mechanisms we put in place post financial crisis may be starting to come to light and working. The focus will shift to what is happening in italy which represents a significant thorn in the side of europe right now. A , use it, there is bunch of functions that are fantastic. You can watch what is going on on the telly. And i urge you to use this loop button down here. Ask the guess the question. The market open is next. Guy welcome back. One minute to go until cash opens in europe. Cocos arehe open. Effectively, it has been written down to zero, so you are seeing a big drop this morning. You are getting some trade surrounding that. I will with through and show you the fair values. It looks like london will open flat and europe will be opening a little down, but spain is the one that is going to open softer than most, down by. 6 . Santander could be under a little bit of pressure this morning. Matt it could be. To highlight, as we really see this european story picking up, investors that were disappointed with the trump trade in the u. S. , getting into european stocks. On the two of 29 groups have not shared in this years rally, mining and energy stocks. Guy let us show you what is going on, the picture as you can see, flat. So many risk events coming up. I think people are not going to be taking positions. They have probably locked in where they need to be. 7525 is where they are this morning. As soon as we get santander, we you it. W youre up marking time. Yesterday, a bit of a selloff. We are not recovering from that, as you can see. The london market down by. 1 pure manus cranny. What way youter cut it up over the next 48 hours, you have a trifecta of risk. Comey goes in front of the committee. He will not talk about obstruction of justice. You have the u. K. Election risk. Gap, and it is wider than the watford gap. Quo attus grow at s p. Financials are off or down. If you do get the santander price, flash it up. There it is, bottom of your screen. It will take over bank of popular Banco Popular. 35 billion euros worth. German factory orders dropped by the markethan what had expected. Business confidence, the highest since 1991. Manufacturing and services, the fastest into tears. This is btv 9196. Matt miller got into the machin