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Quest Means Business

Russia Marks Victory Day With Fireworks Display; G7 Nations Agree To Phase Out Russian Oil Imports; Tech Sell-Off Sends Major Averages Plummeting; European Market Slide To Two-Month Low; Klarna CEO On U.K. Regulation Of "Buy Now, Pay Later"; London Stock Exchange Takes $70m Hit From Russia-Ukraine War. Aired 3-4p ET

Aired May 09, 2022 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:31]

RICHARD QUEST, CNN BUSINESS ANCHOR: We start the new week together, but I'm afraid it's a similar story in terms of the markets. They are heavily

down today. Once again, the NASDAQ is being absolutely pummeled, off three and a half percent with tech and growth stocks down very sharply.

It means NASDAQ is down more than 25 percent, just a quarter of its value this year so far. The market says they look in the events of the day, we

are watching.

A defiant President Putin uses his Victory Day screech to justify his war against Ukraine. He claims the West left him no other choice.

President Biden signs the Lend Lease Act. It's now easier to send Ukraine more military aid.

Uber's Chief Executive reportedly warns employees of a seismic shift in investor sentiment.

We are live in New York. It is Monday. It is May 9th. I am Richard Quest, and I mean business.

Good evening.

Tonight in Moscow even as we speak, there they are. There are fireworks, we will just pause for a second for you to see them. I was going to say enjoy

them, but what's going to follow won't be.

Right now these fireworks are commemorating VE Day and the Allied victory in World War Two, which of course is considered to be extremely

significant, particularly in Russia, but this year takes on a new importance.

President Putin is using the occasion to claim Russia is fighting a war of self-defense. The traditional military parade in Red Square commemorated

Russia's triumph over Nazi Germany and it remembers the millions who died during that war.

President Putin hijacked the ceremony and now justifies Europe's latest conflict, blaming his invasion of Ukraine on the West.

(BEGIN VIDEO CLIP)

VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): In Kyiv, they were talking about the possible acquisition of nuclear weapons. That NATO bloc

started actively developing territories adjacent to us, and therefore in a planned way, we're creating an absolutely unacceptable threat immediately

next to our borders.

(END VIDEO CLIP)

QUEST: So as Mr. Putin speaks of imaginary threats in Ukraine, the menace from across the border is more real than ever. Ukrainian officials fear as

many as 60 people may be dead after they say a Russian bomb struck a school in Luhansk. Ninety people were reportedly sheltering there when it hit and

caught fire.

Despite the devastation, President Zelenskyy remains defiant. He was speaking just as President Putin was -- and he promised a Russian defeat.

(BEGIN VIDEO CLIP)

VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): Very soon, there will be two Victory Days in Ukraine and someone won't have any. We

will then and we will win now. Happy Victory over Nazism Day.

(END VIDEO CLIP)

QUEST: Nic Robertson is with me. And so Nic, look at the pictures, I mean, the fireworks, there's certainly things to celebrate vis-a-vis events after

the Second World War, but the perversion of facts to fit today's awfulness is something else.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It's an inversion of reality. That's what President Putin was delivering, that it was Russia

that was under threat from NATO, and NATO that was stuffing Ukraine full of weapons and putting in hundreds of military trainers and that is what

caused Russia to have to defend itself, an inversion of reality.

But it is the version of Putin's reality that he is selling to the Russian people. And the message today was very much for the Russian people, not

just what we heard from President Putin, but the camera angles, the camera shots, it was all the pomp and circumstance that Russians that have come to

expect under Putin, but with that additional narrative drawing an equality between the fight of the Red Army and the Soviet Union against Nazism in

the Second World War, paralleling it with what he says Russia is doing again today, fighting Nazism within Ukraine.

[15:05:06]

ROBERTSON: So that was his message and he talked about the unity, he talked about the unity of Russians. He talked about the fighters in Donbas

and the Russian fighters in Donbas as well, fighting for the Motherland. It was for the domestic audience.

QUEST: It was, but he didn't ratchet it up by declare -- officially declaring war or setting new goals or targets. Should we read anything into

that?

ROBERTSON: A hundred percent we should. There was ambiguity that he can use later. He talked about Donbas. He didn't talk about the broader

Ukraine, he didn't say what his objectives were potentially to try to take Odessa where we know he is hitting it with heavier missiles now potentially

softening it up to try to take it.

But this gives him an ambiguity that he can stick by what has become the more recent narrative that they are just going into Donbas, whatever else

they get, they can sell as a success if he gets nothing else than the Donbas, which is where he had a presence already, pro-Russian rebels there

that he was supporting.

He can walk away with that, and he won't have oversold himself to the Russian population. It does feel like a Putin with his very strong

narrative domestically, but internationally reading between the lines, this does not appear to be a Putin who is emboldened and then full with his own

vision of what can happen as he was several months ago.

QUEST: Nic, I see you're in Helsinki in Finland, will they or won't they join NATO?

ROBERTSON: They will. Current numbers, 200 parliamentarians about 122 to 123, the latest, unofficial count, latest, will vote to join NATO. The

latest unofficial polls at the papers here, newspapers are reporting 76 percent of the population in favor, not everyone but a significant number

and a significant change over the past couple of months.

The President and Prime Minister will both speak on Thursday, and they are really likely to set the agenda for what will come after that, but I think

by the end of this week, we will know very clearly almost definitively what Finland will do.

QUEST: Nic Robertson in Helsinki in Finland, one of my favorite cities. Nic. thank you.

President Biden any moment now, he is going to sign the military Lend Lease Act for Ukraine. He will sign it into law after Congress passed it. It

makes it easier to send weapons to Ukraine.

The West is also ramping up sanctions on Russia, the G7 said on Sunday, they will phase out Russian oil imports in a timely fashion. That's the

phrase they used. The U.S. unveiled new sanctions against Gazprombank executives and Russia media companies.

Anna Stewart is with me. They are walking this line. I mean, a very narrow one, isn't it, with Gazprombank and Gazprom because they need Gazprombank

to affect the purchases of oil, and they had to walk this narrow line on the withdrawal of oil from Russia.

ANNA STEWART, CNN REPORTER: Yes, it's been interesting. It's been a weekend of some very nuanced sanctioned measures announced and as you say,

the one about Gazprombank from the U.S. is particularly interesting, because this is one of the largest banks in Russia that's been left off all

sanctions lists, and it still has actually, they're just sanctioning 27, Gazprom bank executives.

The bank has been left off because it's absolutely critical in the payments for Russian gas. And of course, no one wants to see any disruption on that

front for the E.U. at this stage, but the Biden administration, Richard said, this is not a full block.

Gazprombank is not a safe haven and they are targeting these executives, they said to create a chilling effect. And also, as you mentioned, the G7,

their notes on oil, also saying it would be done in a timely and orderly fashion. So not rocking any boats there.

QUEST: So where do we stand, particularly on this oil question with Hungary, essentially, saying they don't want the deal to go through, can

they massage it in a true Euro fudge way that they would put in place sufficiently exemptions for places like Hungary, but still get the general

principle through?

STEWART: Yes, so this proposal has now been on the table well, for many weeks, but announced around a week ago and it is getting a little bit stale

on that table as horse trading goes on.

There is lots of massaging going on, I think, behind closed doors, Richard. They are looking now, according to Reuters at potentially giving some of

these Eastern European countries maybe some funds, some investment for their oil infrastructure, also looking at some horse trading with Southern

European nations who are a bit worried about one of the proposed measures which was to ban E.U. tankers from holding Russian oil.

QUEST: Anna Stewart in London. Anna, thank you.

Stay in Europe for the French President who says Europe needs to rethink its institutions once the war is over.

[15:10:10]

QUEST: He told the European Parliament, a new European community could be on the horizon. President Macron says it should be built with

reconciliation in mind.

(BEGIN VIDEO CLIP)

EMMANUEL MACRON (French President): Because when peace returns to European soil, we will have to build new security balances and together, we must

never give in to the temptation to humiliation or a desire for revenge because we know how much that has ravaged the road to peace in the past.

(END VIDEO CLIP)

QUEST: Professor Niall Ferguson is with me, senior fellow at Stanford University's Hoover Institution and author of the book "Doom: The Politics

of Catastrophe." You were talking just last week about the Cold War Two. And we're clearly in it, and it is different because you say because of the

relationship with China vis-a-vis Russia, but how dangerous is the position we're now in?

NIALL FERGUSON, SENIOR FELLOW, STANFORD UNIVERSITY HOOVER INSTITUTION: Well, Richard, if you think of it this way, there was an interwar period

between World War One and World War Two and there was an interwar period between Cold War One and Cold War Two from 1991 until well, just about now,

most people assumed that the Cold War was over and the end of history had arrived and we were all going to live more or less happily ever after, give

or take the odd jihadist terrorist attack.

We've been reminded forcibly, not just by the Russian invasion of Ukraine, but by other events too that, in fact, Cold War can be back. And this time,

the difference is that China is the senior partner on the other side and Russia is the junior partner, whereas at the beginning of Cold War One,

China was clearly the junior partner and Russia or the Soviet Union, the senior partner. So that's how I would think about the world we find

ourselves in today.

QUEST: Right. But what is the significance of that shifting of roles between China and Russia, bearing in mind that it is Russia, that is doing

the fighting at the moment in Europe. China, seemingly for the moment on the sidelines, watching and waiting?

FERGUSON: Well, Richard, if you think back to the beginning of the first Cold War, the Hot War that really kicked things off was in Korea, and China

did the fighting there against the United States and other allies intervened on the side of South Korea.

This time around, Russia is doing the fighting and China is watching and watching a bit nervously, I would think. Xi Jinping clearly gave a green

light to Vladimir Putin prior to the invasion of Ukraine and said, you've got to wait until my Olympics are over and then you go do what you want to

do.

But I think he assumed that this indeed most people did, that this would be relatively easy for Russia, and a relatively short war. Now, the Chinese

find themselves backing a potential loser. They also find themselves being told by the United States, you better not break our sanctions and start

supplying military material to the Russians or we're going to sanction you.

And so China has, in some ways, backed away from full-blown support from Russia. In fact, its exports to Russia are down quite significantly since

the war began suggesting that the Chinese are listening to the threat that was made by the National Security Adviser, Jake Sullivan.

QUEST: President Putin's economy, the Russian economy is being decimated literally by the sanctions, and it will get worse, but if I take a look at

today's markets, and I look at the problems of the Fed, and I look at all the economic problems that had been exacerbated, they weren't created, but

they've certainly been made much worse by the war in Ukraine, inflation, et cetera.

To some extent, Putin is able to inflict a huge economic damage on us at a time when we least need it.

FERGUSON: That's right, Richard. There was already a pretty serious inflation problem in the U.S. starting last year through errors of fiscal

and monetary policy. But the outbreak of war has made the inflation problem significantly worse, and it has also made it global because of the

importance of Russian and Ukrainian wheat exports to so many developing countries.

I think we oversold sanctions, at least, the United States government did by suggesting first that they might deter Putin and then that they might

cripple his war efforts. They're actually more slow acting than that.

The ruble has not collapsed. The Russian economy has not even been decimated, the I.M.F. thinks it is going to contract about eight percent

this year, but there is a slow burn effect that means Putin can't really survive a long war and that is because Russia's industry depends on

important microprocessors and other high end stuff. And basically, without those, they can't make 21st Century weaponry.

[15:15:17]

FERGUSON: They're already pretty much running out of sophisticated weapons, which means they are now fighting essentially with 20th Century

technology against the Ukrainian Army that has been supplied on a massive scale by the United States and its allies with 21st Century weaponry.

That's a big problem for Putin.

QUEST: Niall, finally, what worries you most about the current situation? Is it the prospect of the U.S. being dragged in further? Is it as some form

of, God forbid, nuclear adventurism by Putin? If you look at the way this is likely to progress, what is most concerning to you?

FERGUSON: Richard, what most worries me is that the U.S. strategy seems to be to keep this war going, bleed Russia dry, hope for regime change in

Russia, and hope that that sends a message to China, "Don't mess with the West, keep your hands off Taiwan," but it's super risky.

We're putting Putin into a position where he could lose this war, his Army could actually unravel. We're getting reports of indiscipline and orders

not being obeyed. Does he just go on TV in Russia and say, I'm a very naughty boy, I resign and Mr. Navalny can be President? I don't think so.

He has the biggest arsenal of nuclear weapons in the world, and there is a nontrivial probability that if he is right up against the wall staring

defeat in the face, he resorts to using a tactical nuclear weapon and perhaps Western Ukraine, it's not clear to me how we would react to that,

but it seems to me that that's an option that we are underestimating and it would transform the world in a really quite terrifying way if it happened.

QUEST: Niall, I cannot -- I have to just say, besides thanking you for joining us, I cannot believe we're discussing this, having to discuss this

in such a way. It is extraordinary considering what you and I would have been talking about last year or whatever. Absolutely extraordinary.

Niall Ferguson, good to see you, sir. Grateful that you've given us time tonight.

The markets will lead to new heights with technology now tech stocks are truly dragging the averages lower. We're off three and a half percent on

the NASDAQ and that's just today alone. It's 25 percent since the beginning of the year. Rahel is with me in a moment to explain and discuss.

(COMMERCIAL BREAK)

[15:20:03]

QUEST: We are running out of adjectives to use to describe the market, so let us go with dismal today. We're off 400 Points. It's not the low point,

the low point was down 650 for the Dow, but we are under 33,000 and who knows where the bottom is on that one.

The S&P is off. It's fallen to a 52-week low. The NASDAQ is seeing the worst of the day, it's off more than three percent. If I just give you some

numbers from its all-time highs, the Dow is off 10 percent, so we have a correction there. The S&P is 16 percent, so you're between correction and

bear market, but the NASDAQ is absolutely full throttle, no questions about it, a bear market.

And it is the tech giants: Apple, Amazon, Netflix, Tesla, all of which are pummeling this market down today. I mean, Amazon hasn't been at this price

for three or four years. Netflix, who knows where the end is -- the bottom is for that particular share.

Rahel is with me.

These are large companies that are bellwethers of tech that were backbones of markets.

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: They were and it almost feels as if, Richard, that the music has stopped, that the party may be over.

For years, we saw very cheap borrowing, zero interest rates -- zero percent interest rates, and investors still rewarding companies who prioritized

growth over profits, but it appears that that may be ending.

Uber, perhaps a perfect example. Richard, over the weekend, Uber's CEO sent an internal memo to employees. This was first obtained and reported by

CNBC, but the CEO, Dara Khosrowshahi, saying essentially that the market is experiencing a seismic shift and that we need to react accordingly and then

laid out some cost cutting measures. You can see the shares are down about 10 percent -- and then laid out some cost saving measures in terms of

hiring, calling it a privilege.

Richard, I want to read for you a quote given to me today on the phone with an analyst that covers Uber very closely, Rohit Kulkarni saying that, "Uber

has been the poster child of burning cash since inception. They want to show that there has been an inflection in their fundamentals, that they are

now focused on generating cash and being cash flow positive."

But Richard, will it be enough for investors? Again, they're down 10 percent today, they're down almost 50 percent in the last 12 months. It

remains to be seen if this will be enough to appease investors.

QUEST: Okay, Rahel, but let's bring up that chart that we just had a second ago of the four stocks, the Apple, the Amazon, the Uber so we can

look at their share prices. Okay. All right, Rahel. Number one, Apple, people are still buying the phones and Apple Music and I've got my -- I

happen to use an Apple iPhone. So, they're still buying and selling phones.

Amazon, I think I spent 200 bucks on Amazon over the weekend buying household groceries and the like. Netflix is still getting $21.00 a month

from Chris and myself. Tesla, I haven't bought one yet, but there are plenty of people who are.

So my point is, this is -- people are still using these companies. Do these falls make sense?

SOLOMON: People are still using these companies. Absolutely. And let's still go with that analogy right, 15 to 18 million Uber rides today most

likely. So yes, people are still using these companies. The question is, are they worth what investors have said that they were worth over the last

few years?

Richard, these are the same companies by the way that have soared during the pandemic and now they have soured. So it's not a question necessarily

of are they providing the service or some sort of product? The question is, are they worth what investors have been pouring into them in recent years?

And with rates going up, there is a question that perhaps they need to reprice or recalibrate it.

QUEST: All right, thank you. You answered your own question there. Thank you, Rahel. I'm grateful.

Joe Biden has just signed the Lend Lease Act. It provides military aid for Ukraine. Let's have a listen.

JOE BIDEN (D), PRESIDENT OF THE UNITED STATES: Welcome folks.

Today, I'm joined by Senator Cardin -- Ben Cardin, Elissa Slotkin, and Congresswoman Spats -- Victoria Spartz, excuse me, who I was just talking

to her about her family back in Ukraine. God loves you.

I'm about to sign the bill that these folks are responsible and of course the Vice President is with me. Thank you, ma'am. I am signing a bill that

provides another important tool in our efforts to support the government of Ukraine and the Ukrainian people in their fight to defend their country and

their democracy against Putin's brutal war -- and it is brutal.

I want to thank Members of Congress here for getting this passed and everyone has supported the bill and the bill demonstrates the support for

Ukraine is pivotal at this moment.

Every day, Ukrainians pay with their lives and they fight long -- the atrocities that the Russians are engaging in are just beyond the pale and

the cost of the fight is not cheap. But caving to aggression is even more costly, that's why we're staying in this.

Yesterday, we celebrated V Day, Victory in Europe Day, marking the end of a transition of the devastation as a consequence of World War Two, and allied

nations defeated the scourge of fascism in Europe.

[15:25:17]

BIDEN: And today, Europe is honoring another important day, an anniversary.

On May 9, 1950, just years after the end of World War Two, Europe began to work to strengthen the bonds of unity among the nations, particularly

economic unity, and the shared economic prosperity. The idea ultimately grew into what is now a 27-nation European Union, the economic powerhouse

and a global force for peace and close partners of all the issues we face.

And it really has, I've said from the very beginning, it is something that is good for everyone who brings these countries together in ways that

cooperates closely economically, they also cooperate in other ways, and you've seen it in the support for Ukraine.

And with Putin's war once more bringing wanton destruction of Europe and to reaffirm the enduring commitment to the future grounded in democracy, human

rights, and peaceful resolution to disagreements, I'm now going to sign this bill. And again, I thank the colleagues who are standing behind me

because it really matters. It matters.

Here you go. Done.

[APPLAUSE]

QUEST: The President signs the bill. And as is tradition, with lots of pens, which he then hands out. Let's see if he takes any questions. Oh,

well, no, he didn't take any questions there.

That was the President signing the Lend Lease Bill.

You remember what that's all about. It's the idea. It was written for the Second World War of course with Roosevelt, when it came to Britain and

instead of selling goods so armaments and military hardware to Britain, which Congress wouldn't allow, he lent it to them or leased it to them and

that's what this is all about, then leased or changed.

Inflation is leaving more buyers to consider installation payments, but now pay later, the planner giant will soon report purchases for U.K. creditors.

The chief executive is with me next.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

[15:30:54]

QUEST: The war in Ukraine and the West's retaliatory sanctions are weighing in investors. The London Stock Exchange has it lost around $70 million from

actions taken to isolate Russia, the exchange stock trading its Russian listings and suspended products and services from customers inside the

country. David Schwimmer is the chief executive of the London Stock Exchange group.

I understand, sir, that the sum involved 60 million -- 70 odd million dollars. It's not significant per se. But it's a totem. Isn't it of the

difficulty now that the financial world faces cutting off Russia from the financial world?

DAVID SCHWIMMER, CHIEF EXECUTIVE OFFICER, LONDON STOCK EXCHANGE GROUP: Well, Richard, I would say there has been a lot of complexity associated

with this. And as you say, for us a pretty minimis amount, less than one percent of our total revenues. But a lot of work did have to go into it and

getting it right really for our customers, our members for traders, investors around the world.

And we -- not only did we have to address the sanctions with respect to companies listed on the London Stock Exchange, we also removed Russian

securities from our FTSE Russell indices. And we also have a business called World-Check that is one of the leading providers of background check

information, KYC anti-money laundering and sanctions individuals. And so, we saw a big spike in the usage of that product and have been -- have the

team that has been working around the clock to make sure that that has been up to -- up to date as the sanctions keep changing and getting added to it.

QUEST: If we look at the landscape, first of all, you've got within the U.K., which of course is your market. You've got the Bank of England saying

that recession is now looking likely. You've got markets in turmoil and unfolding sharply. How does that affect an exchange? I mean, obviously, if

there's fewer trading, it's less fees, et cetera, et cetera. But a more difficult environment in the market makes it more difficult for you too?

SCHWIMMER: Well, I must say, to a certain extent, the London Stock Exchange group is very well positioned in an environment like this and for markets

like these. So, just to give you a little bit of color on the London Stock Exchange Group, yes, of course, we have the London Stock Exchange and the

equity trading associated with that. That's a very important but relatively small part of our business from a revenue perspective.

We are one of the world's leading financial markets infrastructure and data providers. And that's 70 percent, 73 percent in fact, of our revenues are

on a recurring basis. And that recurring book is actually growing attractively so the market volatility that we see in times like this

doesn't have meaningful impact on that part of the business. And then as you suggested, in terms of our execution, businesses, our trading venues

and those are in equities, fixed income and foreign exchange.

And then of course, we also have LCH our clearing house, those businesses tend to benefit in times of volatility, in times of higher market activity

(INAUDIBLE)

QUEST: I think back 20 -- 25 years ago and I started at CNN and I even before that, of course, (INAUDIBLE) you know, the London Stock Exchange

there it was in its tower in London, and all the changes that have taken place over the next 20 odd years. What is the next change that you have to

do? The quantum change that you believe is necessary for the group for it to be for the next 20 years?

SCHWIMMER: Well, I would say we're working on that right now. The beginning of last year, we closed on the acquisition of Refinitiv. A $27 billion

acquisition and that has been completely transformational for ELSAG in terms of positioning us for the decades ahead. And just to give you a sense

of what I mean by that. Prior to last year, we were primarily a Europe- focused company with a European footprint.

[15:35:07]

SCHWIMMER: Today we are truly global. We operate in over 70 countries around the world. We serve customers in over 190 countries around the

world. Prior to last year, we were an important but niche provider of index data and fixed income analytics. Today, we are one of the world's leading

providers again on a global basis of financial data and analytics. And I should just also mention, prior to last year, our trading businesses were

largely inequities and the London Stock Exchange, of course.

And now we are one of the world's leading providers of execution venues in equities, fixed income and foreign exchange. So, pretty transformational

for us. We are continuing to work on that integration and the integration is going very, very well. But we have -- as we've told our investors, a few

more years of work to do, yes, but making great progress.

QUEST: We'll talk as those years go through. Thank you, sir, I'm grateful. A new fed survey says Americans are expecting inflation to last through

next year, stretched thin by higher prices, more shoppers are turning to buy now pay later companies. Klarna is such a lender partners with

merchants and vendors to let companies pay in installments. The Swedish FinTech's valuation soared 330 percent in less than a year.

Makes it worth more than Deutsche or Barclays. Now Sebastian Siemiatkowski is the CEO and -- of Klarna. He joins me now from Stockholm. The growth has

been phenomenal, I guess, you know, I'm sort of the harbinger of doom here. You got to be careful now, haven't you? Because with recession and economic

times, people will take on debt, they cannot afford. And what they think they can do even on your pay in 30 or 30 days and going into interest

before long they can find themselves in trouble.

SEBASTIAN SIEMIATKOWSKI, CHIEF EXECUTIVE OFFICER, KLARNA: True. Now I have the fortune as I've been running this company for 17 years. So, I did

actually run Klarna during the last financial crisis in 2007. And we did learn a couple of good lessons from that environment. And I would say that

one of those was that we do very different underwriting, we do underwriting per transaction, not on a limited basis, we do it in real time, we never

lend people cash.

And actually, if you look at our losses though, 30, 40 percent below record industry standards. We also have to remember here that we are in essence,

from a lending perspective, a factoring business. We turn around their balance sheet 12 times a year. And if we change our underwriting

methodology today, in two months, 50 percent of our balance sheet is underwritten by the new.

So we have a level of agility that you don't find your traditional bank have which is very, very different. And I think that's one of the -- some

of the strengths of our business model.

QUEST: The -- it's an ingenious system where, you know, what, what change do you think you're going to introduce over the next few months to account

for what will be -- because in some ways, the next year could be very, very difficult in terms of recession. What -- from what you've learned, what

will you now change further?

SIEMIATKOWSKI: Well, I think that like -- I mean, again, we really think of ourselves as a payment network of the future, much better than -- we are a

third party network, not a full party like Visa, MasterCard, that gives us an ability to innovate much faster because we're -- we can basically roll

out our services to 150 million consumers to a direct relationship. And if you look at our network, yes, people talk.

It's very much associated with credit, but actually 40 percent of our volume is debit. And we have much tougher rules on credit on our network

than you would find for credit card products. This is again, why, as I mentioned before and then -- and I think the art of this also is that our

product is not built on the concept of trying to get people to borrow as much money as possible and charge the highest possible interest rate.

It's clear, it's installments, you're supposed to pay off. There's no feasible consumers associated as they pay on time. And as I said multiple -

- it's very short lending. So, as a consequence of that, actually, you know, we don't -- that just drives much lower losses (INAUDIBLE)

QUEST: Are you -- as the regulator in the U.K. is getting more involved, as you're obviously aware, and you're now reporting certain things to the

various credit rating agencies. Are you worried that the regulators are going to clamp -- countdowns a horrible word because it suggests sort of

snuffing out but you know what I mean, that you're going to receive in -- let's put it in a harsh language, you can do receive greater regulatory

attention and that will have adverse consequences for you.

SIEMIATKOWSKI: Well, I think that any new product in this space is getting more attention and should get more attention, right? Because in essence, we

are still providing credit and with that comes a level of responsibility. Now we have to remember we are a fully licensed bank in Europe. So, we only

do at the moment, you know, and here told the regulation there are specific subset of our products that fall outside of what's currently regulated. And

we didn't set to regulate -- rates regulate.

[15:40:01]

SIEMIATKOWSKI: What I think fantastic about the U.K. regulator is that they're really focused on being outcome based rather than too prescriptive.

And that they're thinking in a proportional way about this. And so, I want a little bit more regulation, especially because I think it makes sense.

But I think at the same point of time, the banking industry has been protected by these regulatory protections.

And that's quite a very poor competition which is why we've seen too high profits. So I think the balance here is how do we keep competition in this

space, promote competition, but at the same time, protect consumers from bad practices.

QUEST: Excellent, sir. We'll talk more I'm grateful that you came on today to talk about it. Thank you very much. I can honestly say, I haven't tried

by now pay later, I keep intending to. I sort of guy something online. And there comes up the offer buy now pay later. And I think oh, should I

(INAUDIBLE) anyway, I will try. Thank you, sir.

(CROSSTALK)

QUEST: I'll try it. As long as it's interest free, because that's the key. I mean, you don't want to be falling into an interest payment, otherwise,

it's not worth. Anyway --

SIEMIATKOWSKI: We look forward to greeting you as a customer.

QUEST: Oh, there we go. Thank you very much. Good to have you on the program tonight. I didn't realize that many people are using the buy now

pay later. And it seems like an excellent way to manage that sort of discretionary purchase and why not keep the money in your own bank until it

absolutely has to go to the vendor? Anyway, that's QUEST MEANS BUSINESS. I'll have dash to the closing bell. I'm not sure we'll want to make a dash.

But whatever it is, we will do it at the top of the hour. Until then, Connecting Africa.

(COMMERCIAL BREAK)

[15:58:52]

QUEST: Now that's a picture of the Eiffel Tower in blue and yellow. Ukraine's colors. They'll start lighting it up and doing funny things with

it shortly. In respect to Ukraine. Coming to us tonight from Paris, we have just a minute and a half to go with the dash to the closing bell. Let me

show you the markets. We're at session lows. All right. So the Dow lost about 300 points. It's now come back just a little bit.

We were up over 750 points. But it's really the trick, the triple stack that I want to show you in detail. The NASDAQ is off four -- it was 4-1/2

half percent. We're up four percent now. Dow up 500 points. The truck maker Rivian, the electric truck maker Rivian is up 20 percent. That's because

Ford is going to sell its stake now the lockout is over. Uber is down 11 percent on cost cutting.

And if you look at the stocks that are Uber, Amazon, Apple and Tesla, you see just how they have been hit hard. Even Apple 152 is lower. So, that's

the way the market are. It's another dreadful day. The dash to the closing bell as the stock market -- as the day comes to an end. We'll do it all

again with you tomorrow.

[16:00:09]

END