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It's locked down time again in some countries, and Bloomberg's friend Sead McCall and Tom Kean had a chance to ask our Davies he's chairman over at NatWest Group. About what's been happening in the UK and elsewhere and what it all means For some of the region's economies. Let's listen in on the lock down licious. It is quite difficult to keep up on DH. There do seem to be a lot of different, rather confusing changes in the regime. So It'll have to reflect on how that is. But on ly upside on the optimistic side. What I observe is that people are now finding ways of carrying on that business. In the midst of all of these restrictions on DH, not ignoring restrictions, but nonetheless finding ways of working around so I don't think that a second lock down is going to be anything like the one at the end of March and in April, we're basically the economy simply throws. I think we're now finding that people have found ways of working much special working home a lot more from get done. We observe that within the bank. So I wass. It's It's bad news clearly that we are moving into more difficult environment, aspiring managing that the virus is concerned. I personally don't think The's further locked down, this is will have as damaging economic consequences as the first wave did. Howard. Maybe that's what for a 70% of the economy. What about the other 2030%, which makes it much more difficult? I'm thinking of either the arts or travel and leisure. And what does that mean for bank lending? Do you worry that they're going to be defaults, and we certainly feel for those people and they're clearly businesses that famous city sandwich fast, but also the airlines and Travel industry generally, who are going to suffer on just feels for them because they have been desperately planning in imaginative ways to reopen and that looks as though that's going to put on put on hold. So, yeah, that is a chunk of the economy that will not work but death. Most banks and with the exception, provided at the first half for a large proportion of bad debts are in their accounting rules require you to provide in advance and I think all banks would say that the actual lived experience is not as bad as the provisional The actual bankruptcies have been some, but they haven't been a great weight off. And that's probably largely because the economy is that somebody said to me the other day advertised in that The provisional liquidity by the central banks on the one hand and provisions by the government of financial support is is preventing the disasters occurring. If you like that, at the moment, the economy is just on life support like so and I think that probably governments will just have to continue with that now that's dangerous for fiscal one point of view. But clearly, if the government's going to lock down again, then they will have to put in place extensions of the various measures they've had in order to support the economy. So at the moment, I think most banks and I'll be talking to a lot recently because it's the because you do, you will know where we normally would be less speed dating course in Washington, but We've been talking to each other a lot anyway of the last two days, and I think everybody is in a similar position well provided in terms of protect potential losses, not seeing those losses company yet. Won'th about next year, but no over anxious about the position of the financial sector. Sir Howard Tom Keen in New York, you know we already I don't know what Manchester Grammar School if you were forced to gunpoint to read the plague by Albert Camus, But there's a number of points in that wonderful book that stark book. Where things unravel. Do we completely misjudged the need for fiscal stimulus? Now just tow actually jettison austerity to get to a vaccine. I do think that we're in a position where governments are going to have to continue with their fiscal stimulus that is going to be difficult for some countries because the Germans have put in place at €1.3 Trillion Pakistan only spent about a billion of it, actually, so the Germans have got plenty of room to continue to support their economy. The UK is not in such a good position, but I think probably given that we went into this with not a huge debts GDP ratio we can probably continue with what we're doing on perhaps a slightly lower scale. Other countries in Europe, maybe under more pressure, So I think my worry now is not so much as a sort of aggregate worry or worried, particularly the UK, Germany. It's that we will now identify. Weak thoughts in the European economy, which will require help from the center of a big bazooka of the €750 billion. A communitywide package is there and I think that's gonna have to be used. So if I were in Brussels Today. I would be making sure that that is going to be mobilized as quickly as possible to help the people who are in trouble. That would be Germany. But it might be some other Southern European countries and that was Howard Davies, chairman of NatWest Group. And that's it for this edition of Bloomberg best. I'm Ed Baxter. And I'm to these Pelligrini. This.

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