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Quest Means Business
U.S. Envoys Witkoff And Kushner Meet With Putin In Moscow; Trump: U.S. Strikes Inside Venezuela To Begin Soon; BOE Governor Bailey On A.I.'s Risks And Potential Rewards; Dell Founder Pledges $6.25 Billion To Millions Of U.S. Children; Bank Of England Governor On A.I. And U.K.'s Economic Growth; Canada To Co-Host World Cup Tournament With U.S. And Mexico. Aired 4-5p ET
Aired December 02, 2025 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:16]
PAULA NEWTON, CNN INTERNATIONAL HOST: Really decent day for the markets, they are up modestly. A lot of fears about A.I. and Bitcoin being put to
one side. I will note as well that the NASDAQ is up a little bit more than half a percent, 10 percent, Boeing stock on NASDAQ was up today. Those are
the markets and these are the main events.
Russia's President is meeting with Donald Trump's Special Envoy Steve Witkoff and son-in-law, Jared Kushner, I will speak with a top Russian
banker on what a peace deal could mean for the Russian economy.
The Bank of England governor tells Richard Quest soaring A.I. valuations pose a risk to British financial stability, and Michael and Susan Dell
donate more than $6 billion to fund so-called Trump accounts.
Live from New York, it is Tuesday, December 2nd. I am Paula Newton in for Richard Quest and this is Quest Means Business.
And a very good evening to everyone. High-stakes diplomacy underway at this hour in Moscow. Top U.S. negotiator, Steve Witkoff and President Donald
Trump's son-in-law, Jared Kushner have been locked in talks with Russian President Vladimir Putin for the past few hours. I will note it is just
past midnight in Moscow.
Now, they've been presenting the latest version of a U.S.-backed peace deal to end the war with Ukraine. That draft is understood to have been modified
in recent days during negotiations between U.S. and Ukrainian officials in Geneva and Florida.
Now, an earlier version was widely criticized by European officials, who said it heavily favored the kremlin.
Stephen Collinson is following all of these developments for us this hour. I mean, look, not for nothing, it has been several hours. They are up late
at the Kremlin, I can tell you that from personal experience, but this is at least perhaps getting into the heart of the deal one way or the other.
STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Yes, and what we know from previous talks with the President of Russia, Vladimir Putin, and foreign
leaders and representatives, there is often a long preamble from President Putin about the history of the conflict and everything else, but the
mission here for these two U.S. envoys is to try to present and make that plan the modified plan that was initially considered in Europe as far too
favorable to Russia. Can they sell it to Vladimir Putin?
Going into the talks, you have to say the signs weren't particularly promising because they underscored, I think the fundamental reality here,
which is the doubt whether Putin really wants a peace or is prepared to make any kind of peace that can be acceptable to Ukraine.
He talked about how European powers were trying to block Trump's peace efforts and trying to interfere with Trump. So, you know, the mood music
isn't that favorable, I think, but we will just have to wait and see. A lot of people didn't think Witkoff and Kushner, Jared Kushner, the President's
son-in-law could pull it off in the Middle East. And by all accounts, they've done some pretty serious work there, so I guess we should wait and
see what the outcome of this is.
NEWTON: Yes, and to that note, there was bipartisan gratitude really, on the part for the Trump administration for coming to that deal. This one, I
would argue, is much more complicated, especially when it comes to the Europeans really looking at this deal, which is being negotiated between
Ukraine, Russia and the United States.
The Europeans might really be a spoiler here and the trump administration knows that.
COLLINSON: Yes, and it is interesting the way this has all developed is that Marco Rubio, the Secretary of State, who was seen as very instrumental
in trying to make the plan more acceptable to the Europeans in Ukraine, he is not in Moscow, he was at the President's side in an almost endless
Cabinet meeting in Washington today, and I think if you think about who is there, Steve Witkoff and Jared Kushner, both of these men are not official
long term U.S. diplomats. They don't necessarily have real official roles, Cabinet level roles in this administration, but they are business people
and real estate guys. And that is the frame through which they and which Donald Trump sees this.
So you can see why the Russians have been talking about potential economic deals for the United States, cooperation in extracting vital minerals from
places in the Arctic. They are trying to sell the Trump administration on a deal that doesn't necessarily take into all the historical and territorial
problems that Ukraine and the Europeans have, and everything that the Europeans want, a fair land deal for Ukraine and security guarantees, these
are all things that the Russians have repeatedly said they won't accept.
[16:05:10]
NEWTON: Won't accept and obviously, clear that Europe would be involved in guaranteeing any of that if that happens. Stephen Collinson, for us, as we
continue to keep an eye on the Kremlin. Appreciate it.
Now, Russian President Vladimir Putin was more than an hour late to meet with those White House negotiators. When he was meant to be meeting with
Steve Witkoff and Jared Kushner at the Kremlin, Mr. Putin was actually several miles away giving a keynote speech at the Annual VTB Investment
Forum.
In that address, he praised Russia's economy and it's drop in inflation. Listen.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): The reduction in inflation has been a significant achievement this year. While inflation was
estimated at double digit rates in March, it is now below seven percent year-on-year. It is expected to be around six percent by the end of
December.
It means it will be below government and Central Bank forecasts.
(END VIDEO CLIP)
NEWTON: VTB is the second largest bank in Russia.
Andrei Kostin is the CEO of VTB and one of the country's top bankers and he joins us now from Moscow, just fresh from that investment forum. And I
thank you for being with us.
I have to ask you right off the bat, how crucial is a peace deal to the Russian economy, an economy that, according to President Macron, will begin
to feel the pain more and more as the months wear on here.
I mean, Macron calls, you know, the heightened European sanctions, along with new U.S. sanctions, he calls them a game changer for your economy.
ANDREI KOSTIN, CEO, VTB: Good afternoon, Paula or rather good night from Moscow.
Yes, of course, the geopolitics has a big effect on the Russian economy, but surprisingly, Russian economy is doing quite well, taking into account,
of course 30,000 sanctions and increased military spending. Of course, I don't see anything good in sanctions. Some people say, oh, its good
sanctions and we started to think about this and that. We started to produce that.
But of course, sanctions is completely illegal measures. They are outside any international legal framework, but somehow the economy is coping with
these problems. As you just mentioned, that Mr. Putin said about inflation, about low unemployment and other things. But on the other hand, at the
moment, what we have is what we call the controlled cooling of the economy.
There is a slow economic growth this year, probably less than one percent, but with very low, unemployment, with a substantial increase actually in
real income. But sanctions are having a bad effect, and the new sanctions introduced already by Trump administration probably would also have a
negative effect because of the probably higher discount of the Russian oil.
NEWTON: Now, having said that, the Russian Central Bank itself, and I am quoting them now say that "... geopolitical tensions remain a significant
uncertainty factor in the next year." They certainly are looking at some of the pitfalls of what is to come and I am wondering, have you spoken to
President Putin about the fragility of the Russian economy and the fact that CEOs like you, you need more foreign investment opportunities.
You know, is a peace deal sooner rather than later really crucial at this point, even for Russia? I mean, how much longer can the Russian economy
withstand this sanctions regime?
KOSTIN: Well, I think quite a long because, you know, this kind of war, that requires probably less people, require less money because it is kind
of a new war. You know, we don't have thousands of tanks or thousands of aircraft fighting. You know, it is some kind of -- we call it a special
military operation rather than war, and probably it is justified, this kind of wording.
But, I think Mr. Putin understands quite well the problems and we are all trying to do our best, of course, to cope with the economic problems, but
frankly speaking, if you come to Moscow and you walk in the street, not only Moscow, you don't see much of the war here. People are living normal
lives, you know, restaurants are working, you know, theaters are working, you know the Bolshoi is still --
NEWTON: Certainly, Mr. Kostin, in large cities -- in the large cities, I know that that is happening. That's not true in some of the regions in
Russia, for sure and many of them are suffering quite a bit economically and otherwise because of the conditions right now.
I do want to ask you, though, given what is on the table right now for Russia, I am curious, do you know Mr. Witkoff and Mr. Kushner personally?
Have you ever discussed investment opportunities with either of them or their representatives?
I mean, you know President Trump has spoken about wanting to jump start U.S. investment with Russia.
[16:10:08]
KOSTIN: Yes, I mean, first of all, we don't know much about what is on the table, you know, because there are only leakages about this American plans,
but there were never any, you know, details published officially or whatever. We know some comments of Mr. Putin who said that the original
plan actually was probably a good basement for the Turks, but after discussions with Ukrainians and with Europeans, we don't know what is on
the table.
But yes, I mean, there is a big room for cooperation, though I should tell you that the trade relationship, economic relationship between Russia and
the United States we are not too big, with exception probably of the financial markets, because about 60 percent of the foreign investors and
financial markets were Americans and we had extremely good relationship with American banks, all the investment banks worked very hard on the
Russian territory, I would say, and did a lot of transactions.
So of course there is room for cooperation. You also, I mean, in the beginning mentioned about these minerals, you know, Arctic and so on and so
forth. Space, of course. Nuclear issues, and many, many others and I mean, we would like to see more relationship with America, and of course, it is a
great economic nation and Russia is very much interested.
Russia doesn't want a war. Russia definitely wants to have a peace with America and with the rest of the world.
NEWTON: On the issue of Mr. Witkoff and Mr. Kushner, they are prolific dealmakers. Do you know them? Have you met with their representatives? Have
you discussed investments with them?
KOSTIN: Well, I think Mr. Witkoff has quite a high reputation here in Russia, and we strongly believe that he definitely represent the opinion
and position of Mr. Trump and we very strongly believe that Mr. Trump is quite sincere in trying to resolve this issue, just as he managed to
resolve the issue in Gaza region.
So we very much hope that tonight, discussions will bring some positive results. Unfortunately, there is no yet any information, but we are looking
forward that as soon as it finishes, there will be some statement.
NEWTON: But you have had dealings with Mr. Witkoff then? You have spoken to?
KOSTIN: I beg your pardon?
NEWTON: You have spoken to Mr. Witkoff then? You have had dealings with Mr. Witkoff?
KOSTIN: No, no I didn't. No, no, no, no, I didn't -- I don't know, Mr. Witkoff myself.
NEWTON: Okay.
KOSTIN: No, no, no.
NEWTON: Just put a button on that.
I do want to ask you and it is significant, given what you're trying to do for the Russian economy. You're not only under sanction in the United
States, you're actually under indictment and according to the Department of Justice release on you, they've accused you of flouting U.S. sanctions to
support, in their words, your exceptionally lavish lifestyle through complex schemes, they say, involving shell companies and illicit
transactions. And that includes money laundering.
Under these circumstances, and listen to the question carefully here, even with a peace deal, do you expect Russia and sanctioned individuals like
yourself to be able to snap back right where you were before to return to international finance and investment? Do you believe that should be a
condition of any peace deal?
KOSTIN: You know, it is not so important for me, frankly speaking. You know, I was living under American sanctions since 2018. I think it is just
the politics. It has nothing to do with me.
You know, I have a very friendly relationship with all probably major bankers in America. They know me quite well as a reliable partner. So I
don't very much care about this, and unfortunately I think that will not happen very quickly. I think, what has happened, the attitude of America
and the administration, previous administration particularly, and Europeans toward the Russian business in general, when all the assets were arrested,
when all property were arrested, you know, it showed that, you know, it will not go on like this.
You know, I think, we will be more and more focusing on the countries like China, India and Arab countries in our future international cooperation
rather than the West, because we don't trust West very much now. We don't trust them.
NEWTON: Regardless, you believe Russia will not be -- will be turning away from the West in the years to come and I hear you. You don't believe there
will be a snapback very quickly at all if ever.
I do want to ask you on something that you have commented on already, you say Russia will retaliate if the E.U. uses foreign Russian assets for a
loan, or just give it to them, Ukraine, those Russian assets will be handed over to Ukraine. You say Russia should retaliate? Will retaliate? How? What
advice would you give President Putin on that?
KOSTIN: Retaliate in what sense? Sorry, I am a bit --
NEWTON: If the E.U. seizes the assets, the Russian assets. If the E.U. seizes them, how do you believe Russia should retaliate?
KOSTIN: That is robbery. That's robbery. That's robbery. Our assets were, for example, arrested in Germany. Our bank was arrested in Germany and the
money is spent now.
[16:15:10]
You know, we will never get them back, I am sure even if sanctions, you know, are eliminated. So basically, there is no any legal really reason to
arrest assets, to take them away. If the West is just trying now, Europeans trying just to take the sovereign money of Russian Central Bank and to
spend them on war, that is unprecedented in the history. It never happened before.
And we think it is just a robbery, nothing else, you know, so there is no - - there could be no justification, and in spite of the fact that Europeans are trying to find any legal way to do it, they still cannot do it.
NEWTON: Mr. Kostin, we will have to leave it there, but we really do appreciate your time, especially at this late hour in Moscow, as we wait to
see what comes out of this meeting between the U.S. negotiators and President Putin.
KOSTIN: Yes.
NEWTON: Appreciate it. Thanks so much.
KOSTIN: Let's hope for the best. Thank you very much.
NEWTON: Thank you.
KOSTIN: Thanks. Bye-bye.
NEWTON: Now to a stunning escalation in the showdown between the United States and Venezuela. In the past few hours, President Trump said that he
will soon begin striking targets inside the country. He made the announcement after this Cabinet meeting.
Now, so far, Washington's pressure campaign has focused only on attacking boats that officials claim are carrying drugs to the U.S. The Defense
Secretary says strikes have only just begun. He, in fact, is under fire for authorizing an admiral to order a follow-up strike on September 2nd, The
White House saying Monday the Admiral acted within the law for ordering a strike on the survivors of an initial attack. Pete Hegseth says he did not
personally see any survivors. Listen.
(BEGIN VIDEO CLIP)
PETE HEGSETH, U.S. DEPARTMENT OF WAR SECRETARY: I watched that first strike live. As you can imagine, at the Department of War, we've got a lot of
things to do. So I didn't stick around for the hour and two hours or whatever where all the sensitive site exploitation digitally occurs. So I
moved on to my next meeting.
I did not personally see survivors, but I stand -- because the thing was on fire. It exploded and fire and smoke, you can't see anything. You've got
digital. This is called the fog of war.
(END VIDEO CLIP)
NEWTON: Alayna Treene is at The White House for us. I know he is calling it the fog of war. And yet, in terms of issuing clarity there from this
Cabinet meeting, I monitored it. I really didn't see how Americans would be clear on what happened during that boat strike.
What else is The White House saying?
ALAYNA TREENE, CNN WHITE HOUSE REPORTER: Yes, look, I think there are some really notable points made during this Cabinet meeting, specifically on
this line of questioning, Paula, and I think the one that you pointed out is one of them, for sure. I think you rightly pointed to the fact that
Hegseth was saying that he was not in there for both of these strikes, that he only saw the first strike, and then he left the room. So that is very
notable.
The other is that we heard from President Trump himself arguing that neither him nor Hegseth actually knew about the second strike. And so
that's also a little bit of an inconsistency, of course, with what we've heard now from The White House Press Secretary and others defending this.
But when we get down to the bottom line here, I think where these comments are going to really matter is how we see this ending up playing out on the
other end of Pennsylvania Avenue, how Congress is going to respond to this. Because, you know, the key thing that they are really concerned about,
lawmakers on both sides of the aisle, not just Democrats, but Republicans as well, is this idea of did this administration know? Did Hegseth, did
Admiral Bradley, who they've really been pointing the finger at for all of this, for being the one to actually direct and order this strike despite
him being authorized to do so by Secretary Hegseth? Did they know that after that first strike, there were still two survivors who were not
killed? And did they then order the second strike after that? That is going to be the key question, the one that some Democrats are saying, if that is
the case, it could potentially amount to a war crime.
We've heard Republicans argue if they're not going that far, that they need more information on this, and that they do find it highly concerning. And
so this wasn't, I think, just getting back to your original point, Paula, this wasn't really a fuller clarity. They weren't offering much more
clarity on what had actually taken place. But they did continue to distance themselves from specifically that second strike and reminder that the
second strike is really what all of this scrutiny and concern is really focused on.
NEWTON: Yes ,and I am wondering, given what we heard in that Cabinet meeting, do we have any more clarity going forward on this issue of
bringing these strikes, you know, on the ground in Venezuela? He keeps saying land. The President keeps saying it will be on land and it will
happen very soon.
Any more outlines on what the strategy might look like?
TREENE: Yes, well, he didn't get into details, I will say that. The President did not share any details on this and they did have a meeting
last night in the Oval Office with the President, as well as top members of his National Security team and Cabinet.
But what he did say, he said that we are going to start doing these strikes on land, too. We know where they live. We know where the bad ones live. I
am quoting the President here, and we are going to start that very soon.
Now, look, that's not much different from what we have heard the President say in the past about, you know, potentially beginning strikes on land in
Venezuela soon.
[16:20:10]
But he did argue that land strikes are actually much easier and those are his words, much easier than strikes trying to target some of these boats
that we know are off the coast of Venezuela and in the Caribbean.
Look, I think what we do know from our reporting at least, is that they have been looking at trying to target some drug facilities and drug routes
and potentially even some of the leaders they think that could be crucial in having the flow of drugs from Venezuela to the United States.
One very notable thing as well on all of this, Paula, that we should mention, is that he said it is not just Venezuela that they would be open
or that at least the President would be open to targeting with land strikes. He said -- he mentioned Colombia at one point as well, saying, I
hear they make a lot of cocaine.
And so he is starting to maybe broaden the picture a bit more on where some of these targets could go next.
NEWTON: Yes, it was an interesting conversation there at that Cabinet meeting, not any more details necessarily, but certainly an indication of
where the strategy is headed.
Alayna Treene for us. Thank you.
Next, we will be hearing from the Governor of the Bank of England, Richard Quest, sat down with the bank's chief on the latest financial stability
report.
(COMMERCIAL BREAK)
NEWTON: The Bank of England warns that soaring prices of some A.I. stocks and their influence on the markets could pose a risk to the U.K.'s
financial stability. Governor Andrew Bailey spoke to Richard Quest about the bank's latest Financial Stability Report, and why there are reasons to
be optimistic about the global economy.
(BEGIN VIDEOTAPE)
ANDREW BAILEY, GOVERNOR, BANK OF ENGLAND: Growth and activity in the world economy has been more robust this year than I think we would have probably
been expecting if you and I had been having this conversation back in the spring.
Now, alongside that, though, I think we have seen a number of developments, which are the things that we are focusing on and just to quickly run
through them, I mean, we are seeing stretched valuations in some equity markets, particularly A.I.-related companies, particularly in the U.S.
markets.
Now, I would say, look, I think it is important to put this into perspective. I think and hope that A.I. is going to be the next sort of, in
a sense, source of what I call sort of dial-moving productivity growth for all of us because we need it and that's what really drives living
standards, but of course it is quite possible that markets have to value this future stream of returns, and they could overvalue it clearly, so we
have to watch it.
[16:25:10]
It is concentrated -- very concentrated in a number of companies. Those companies do have, you know, do have their own cash flow, as it were. But
it is something we have to watch.
The second thing I would draw out is the world of private assets, which has grown very rapidly -- private credit, private equity. And there, I think
we, you know, we are at the stage of having to do a lot more work to understand just how this area is developing. We have announced today that
we are going to do a further what we call system-wide scenario exercise to test it out. So that's the second one I would particularly, you know,
particularly focus on as an area that I think is something that has to be examined in terms of the overall financial stability situation in the
global economy.
Another one is the development of alternative payment mechanisms and stablecoins. We are looking very carefully at how that will emerge. So
again, an important one. The fourth and final one I would draw attention to, which we have before, is the extent of leverage in markets,
particularly government bond markets, which has changed dramatically over the last five years or so.
RICHARD QUEST, CNN INTERNATIONAL HOST, "QUEST MEANS BUSINESS": When we take the totality, the thing that struck me this morning was this idea of the
interconnectedness, if you will, the spider's web of many of these A.I. companies and the way in which you would now have got this circular
financing that's taking place, because what basically you're saying is, if there is a fall or if something slips over, then it will mushroom and will
get worse.
Now I wonder, are you concerned that there is an opacity now to all these transactions and to the way these interconnectedness is working that does
reminisce of 2008-2009?
BAILEY: Well, I think two things. You're right that there is growing interconnectedness. Now that's not surprising in some ways, because these
business models are built on quite heavy, heavy levels of connection because some of them are sort of at one end of the sort of production
cycle, and the others are at different ends of that production cycle now. But it is growing, I think, so we have to watch that.
The second thing is that, I mean, in some ways, naturally they are moving from being financed out of cash flow to debt financing, and the debt
financing is growing very rapidly as the investment demand grows very rapidly.
Now, again, I don't think there is anything surprising about that in abstract, but I think we do have to look very carefully because the scale
of it is very big.
On the other hand, of course, that is actually how we will get stronger productivity growth if this all comes to pass in ways that we hope it does.
QUEST: To those of us of a certain age that remember dot-com boom and bust, and then go on to remember the GFC, I guess --
BAILEY: Indeed.
QUEST: I guess, are we seeing -- is this report a canary in the mine? Is it an early warning that that we have time now to put right errors or at least
imbalances that you're seeing and that now is the time to do that?
BAILEY: Well, I think there is a number -- you're right. I mean, you and I, Richard, have been around too long. But you know, we both remember those,
both of those periods. And look, there are various elements of those periods that I would point to as you do.
One in the dot-com period, I mean, there were companies coming in which had value, had stretched valuations and almost no cash flow. Now, we are not
seeing that at the moment, but we went through that period with one thing leading to another. So that's why I think we have to be on to these issues
and looking at them very carefully early on.
If we go to the financial crisis, it is very interesting and you know, I would look particularly -- one of the things that I say to my colleagues a
lot is, you know, before the financial crisis, if you look at the U.S. subprime mortgage market, we spent a lot of time looking at that and
concluding it wasn't big enough to be a global threat to financial stability and we were wrong.
Ex-post, you can look back with benefit of hindsight and say, well, you know, the default rates in the U.S. mortgage market, yes, it went up, but
it wasn't that high.
But in the middle, we had a financial crisis. So what happened?
Now, one of the things that happened was that we had a loss of confidence in the markets. We had complex repackaging of instruments going on, which I
think in a sense exacerbated that loss of confidence. You remember the sort of slicing and dicing that was talked about. So we have to look out for
these warning signs. Are we seeing -- and we are beginning to see some elements of repackaging, you know? Are we seeing excessive reliance on
ratings? You know, well, we are beginning, I think, to see a bit of that going on.
And so we have to get in there early and lift the lid on this stuff and say, look, good things can come out of all these developments, but we have
to be careful because we've had these lessons in the past.
(END VIDEOTAPE)
NEWTON: QUEST: Indeed we have and we will have his thoughts on Britain's economy later in the program.
Still to come for us, it is one of the largest private investments in American children in history, what the founder of Dell computers and his
spouse have pledged to do with more than $6 billion.
[16:30:43]
(COMMERCIAL BREAK)
[16:33:45]
NEWTON: Hello, I'm Paula Newton and there's more QUEST MEANS BUSINESS in a moment when Michael and Susan Dell donate more than $6 billion to fund
child investment accounts. We'll discuss how it could work. And the Bank of England's Andrew Bailey says the U.K. needs to achieve stronger growth.
You'll hear more of his conversation with Richard Quest, but before that, the headlines this hour.
Talks at the Kremlin going late into the night as two U.S. special envoys meet with Russian president Vladimir Putin. Steve Witkoff and Jared Kushner
are bringing U.S. proposals to end the war in Ukraine. Earlier today, a senior NATO official said there's no indication that Russia is willing to
make any meaningful concessions.
Pope Leo is urging U.S. officials to avoid military conflict with Venezuela. He called on the United States to find another way to handle the
escalating tensions between the two countries. The Pope also says Western nations should be a little less fearful of immigrants.
The death toll from recent flooding right across parts of Asia has now risen to more than 1200 people. Two cyclones and heavy monsoon rains have
caused damage from Indonesia to Sri Lanka. Hundreds are still missing after floods and landslides, and more than one million people have been
displaced.
[16:35:08]
Now to an absolutely enormous philanthropic pledge in the United States. Michael and Susan Dell say they'll donate more than $6 billion to fund
investment accounts for millions of children. Their gift aims to expand the reach of so-called Trump accounts, which are set to launch next year. Now
the tax deferred accounts would give parents of newborns $1,000 to invest for their child's future. President Trump formally announced his plan for
those accounts. Listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Trump accounts should grow to be worth many thousands of dollars by the time the child is 18, and even
more by the time they are 20 or even 30 years old. We think it's going to be something really unique and really special. We hope many others will
follow Michael and Susan's example and make their own contributions. I'll be doing it, too.
(END VIDEO CLIP)
NEWTON: Now, other countries have already put in place a tax advantaged savings and investment accounts for their children. For instance, in the
U.K., people can deposit up to 9,000 pounds a year in junior individual savings accounts. The money collects interest free. In Canada, some
children can receive grants of up to $7200 for their registered education savings plan. Additional money is available for lower income families.
Other countries, including Israel and Singapore, have similar programs.
CNN business and economics reporter Anna Cooban joins me now from London.
And you've been looking into this, Anna. I mean, it's an intriguing concept, really, because it is giving the money directly to families. But
given the U.K. example, there are some pitfalls.
ANNA COOBAN, CNN BUSINESS AND ECONOMICS CORRESPONDENT: Yes, there are, and I think a really good direct comparison, Paula, is what the U.K. has done
previously. So not that junior investment account that you just mentioned there, but a defunct policy that was alive between 2002 and 2011. This was
called a child trust fund.
Now, similar to the account that Trump is talking about in fact there will be this lump government sum at the start, it was around 250 pounds back in
the day in the U.K., with the idea being that this would accrue over time and that when the child turned 18, they then had this lump of money that
had compounded to really set them off on a good start to their adulthood. But there was research by Aston University and Lincoln University that
looked into whether the scheme had been successful.
And this is what they found. They found that, yes, there were small positive impacts on the amount of savings that these children had relative
to children that didn't have these accounts. But crucially, these were -- these benefits were concentrated among affluent families. And then
secondly, and importantly, about 27 percent of the matured accounts were never touched. So those savings have just really sort of lying there
dormant.
And this is really to do with the fact that many parents forgot about these accounts, or they fell by the wayside. In this research they literally say
that, you know, parents would move house, of course, across these 18 years, and these letters would get lost in the post. So if there's any kind of
feedback or lessons learned for the U.S. scheme, it's make sure that parents of all income distributions are seeing the benefits for their
child. And also make sure that the operators of this scheme are keeping in touch with parents because 18 years is a very long time.
NEWTON: We all have to be reminded, Anna. It is a very long time.
Anna Cooban for us from London, appreciate that.
And we will bring you the second half of our conversation with the governor of the Bank of England. Hear Andrew Bailey's thoughts on A.I., Britain's
economic headwinds and the recent budget leak, right after the break.
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[16:41:38]
NEWTON: OK, this just in to CNN, we are learning that the meeting at the Kremlin between President Vladimir Putin and U.S. special envoy Steve
Witkoff and Jared Kushner, those meetings have wrapped after almost five hours. Now they presented the latest version of a U.S. backed peace deal to
try and end the war with Ukraine. And of course, we will bring you more updates as we have them.
Now, the governor of the Bank of England says A.I. is likely to lead the next cycle of innovation in the U.K. economy. Here's the second half of
Andrew Bailey's conversation with Richard Quest. Richard asked Bailey about the premature release of the U.K. budget by Britain's fiscal watchdog.
(BEGIN VIDEOTAPE)
BAILEY: We look very carefully at what actually happened in terms of the release last week, because we all learn lessons. I mean, you know, good
practice is to learn from lessons from these sorts of things. And we looked at them carefully. There are differences in the way we do our -- do our
releases. But, you know, we all learn all the time. That's the first thing I'd say.
More substantially, I'd say this. I think it's important to concentrate on the substance of the of the underlying issues. And it comes back to this
point about needing to have stronger growth in the economy. Just to give you the example, the U.K. is by, you know, is in a lot of company amongst
countries in this respect. But over the last 15 years or so we've had a growth rate in terms of the potential growth of the economy and the actual
growth, which is about 1 percent lower than what it was in the preceding 20 years.
So we've gone down from having about a 2.5 percent sustainable growth rate to a 1.5 percent sustainable growth rate. Now that's a big change. The
effect of that is to constrain, frankly, a lot of policy choices. You know, the policy environment, particularly in that world of fiscal policy, will
look very different if we had a higher growth rate. Now it's what are the reasons for this fall in the growth rate? Well, let me point to a number.
One is in that 15-year period, productivity growth has fallen. I think that is a good part due to sort of cycles of innovation. That's what economics
tells us. So again, we have to come back to investments. I think the next cycle of innovation, it's more likely to be A.I. than anything else. So I
think we have to support, you know, sensible, safe innovation in that area.
Second thing I'd point to is trade. You know, if you make economies less open, you do affect growth. You do affect productivity growth. And the
third thing I'd point to is I think is a lot of countries, the U.K. included, have got at least three headwinds that were running against. One
is that we have populations that are on average aging. Secondly, we've got, sadly, the end of what I call the post-Cold War dividend in terms of
defense spending.
Thirdly, climate change. Whatever you do about that. So those are all big headwinds. And that's why raising the sustained rate of growth is so
important.
QUEST: If we -- obviously I watched this morning the various little short clips on the bank's Web site that you put out following the last MPC.
[16:45:02]
It's very well done, if I may say, Governor, the way you just sort of answer quick little snippets about the decision and your clear direction of
monetary policy is there for future. I'm just wondering between the last meeting and where you think you are now, and I guess there's a thousand and
one ways that I can ask what you think will happen next. But they all lead to the same road of the data that's coming in. When I asked A.I. to give me
an opinion on it, it sort of said the bank still has a very tricky job.
BAILEY: Oh, well, I can't disagree with A.I. on that point. Look, we'll be starting the next monetary policy round next week, actually, and we'll
announce just over two weeks from now. Look, my own view, and I said this in the last round was that I think the path of rates remains over time
downwards. I think we have seen some -- we'd seen some news when we got to the last decision that supported that.
I will be looking very carefully at all the evidence that has come in since then when we start the round next week because my view was and we're now
publishing each of our views, so you can see my view in there was that it was premature at that point to reach a conclusion that we have enough views
to confirm another step downwards, but I will come back to that when we start the round next week. And nothing has changed in my view on that.
QUEST: Final question, Governor, because I'm obviously based in New York, where I follow as closely as the MPC, I follow the FOMC. And I'm fascinated
by when there are disagreements within the committees, how much strength and weakness we all give to this. And you seem to be much more relaxed at
the Bank of England versus, say, the FOMC and the Fed when you do have disagreements within the committee that sort of spill over into the public
domain. You seem to be much more, well, the vote was this, the vote was that, and not everybody agreed.
BAILEY: Well, I can't speak for Fed because I'm not involved in obviously at all in Fed policymaking. So I can't speak for any other central bank.
Look, one of the things that I think we've certainly been accused of over time, particularly when inflation is above target, is groupthink, so-
called, and I've never felt there was groupthink on the MPC, but I think, you know, we are very transparent in the different views we hold. And I
welcome that.
You know, I'd say to other members of the committee, I think it's important that we see the same evidence. We all look at the same evidence. We've got
common body of evidence, but we draw different conclusions from it and that we're transparent in setting those out. And I see that as a strength,
frankly.
(END VIDEOTAPE)
NEWTON: And our thanks to Richard and the governor there for that interview.
OK. When we come back, the World Cup draw is going on this week. We will speak to one of the host nations, Canada, about how they are preparing for
their big World Cup debut. You'll want to stick around for this.
(COMMERCIAL BREAK)
[16:50:50]
NEWTON: All right. We are just days away from getting a sense of how the FIFA World Cup will actually play out. The final draw for the tournament
will be held on Friday in Washington, D.C. For the first time 48 teams will be sorted into 12 groups of four. Then on Saturday, FIFA will release the
full match schedule, including venues and kickoff times. Canada automatically qualified as one of the hosts of the tournament. That's
alongside the United States and Mexico, and it's hoping to make the most of it.
We will speak to two of the biggest names in football in Canada. Diego Moratorio is general manager of MLS Canada and Peter Montopoli is the chief
tournament officer -- chief tournament officer for Canada for the 2026 World Cup.
And I want to welcome you both.
Peter, first to you. Canada will never be accused of being the cradle of football. You and I both know that. We still call it soccer. So what are
Vancouver and Toronto, two of the host cities here, hoping to bring to this World Cup?
PETER MONTOPOLI, CHIEF TOURNAMENT OFFICER, FIFA WORLD CUP 2026 CANADA: Well, I think they're going to bring a lot of passion. I mean, right now
Toronto and Vancouver led for volunteer registration, number one and two of all 16 host cities. We're leading in merchandise sales, but also the energy
with both cities is that, you know, we've never had this before in Canada. And the interest and ticket demand is through the roof. Number two, in
terms of ticket sales of all 211 countries.
So I think, you know, they're ready. We want to take the World Cup to every province, every city in Canada. And we have plans to do that in the new
year. But overall, the excitement is at a level. Just looking at this week for the draw and looking at TSN is carrying it 12 hours straight live.
That's unprecedented in our country, so we're very excited.
NEWTON: Yes, TSN being the sporting network in Canada.
Diego, what a year for MLS in terms of interest in ratings. And Peter kind of alluded to that. The final is this weekend. Miami and Vancouver, Messi
and Mueller. Quite a showdown. But what does any of this have to do with the World Cup? I mean what is the MLS doing for the World Cup and what is
the World Cup doing for MLS?
DIEGO MORATORIO, GENERAL MANAGER, MLS CANADA: Well, I think the first thing to say is this -- the state of the sport in Canada is not a fluke. It has
been a systematic approach to developing the sport in the country. Billions of dollars in North America spent in state-of-the-art stadiums and
facilities. And it's not a coincidence that 22 out of the 26 members of the Canadian National Team are actually product of Major League Soccer, either
current or former players.
So on a side note, and just talking about MLS Cup, you've got two greats from the World Cup playing this Saturday. I work for the league, so I love
all my clubs. I just have a great match, and exciting 90 minutes of football or more. And let the best club win and the best club on that day
win.
NEWTON: And it will be a thing to come in terms of the enthusiasm for that World Cup.
I mean, Peter, can you give us an update on the preparations? There was major work to do on the pitches. There is the issue of visas for visiting
fans and ticket sales. Right? And obviously of concern to many is the affordability of the tickets. We've all seen the scramble for some of these
events and actually trying to get a ticket to them.
MONTOPOLI: Yes, well, look, here in Canada, we've had to upgrade our two stadiums and the upgrades are taking place. Started a couple of weeks ago
at Toronto Stadium, and B.C. Place has already started months ago. There is new grass going into B.C. Place. Toronto has had grass from the very
beginning, pretty much, so the stadiums have had to be upgraded, that's for sure.
I think from a ticketing perspective, I think that's just a sheer demand of what a FIFA World Cup asks for. And in Canada, it's like I said, first time
hosting. Yes, people are going to pay. I think we saw it for all of us that watched the Blue Jays run. We saw some of the prices going very, very high.
[16:55:04]
And that's the part of major sporting events. And I do feel the people in Canada will embrace it. They certainly will embrace this event.
NEWTON: And Peter and Diego, a quick question for both of you.
Diego, to you, first, you know, FIFA will get the proceeds from this World Cup and it will use the proceeds in each country to continue with this
soccer for forward program. And it's obviously to engage people of all ages, of all backgrounds to get into soccer. I am a former soccer mom in
Canada. So tell me, Diego, to you first. What is this World Cup going to do for that?
MORATORIO: Well, I think, I think this is a pivotal point. If you look at 1994 in the U.S. and what that led to 30 percent growth in fandom for the
sport, it led to the -- to MLS being created. I think let's not forget the great performance and success that the women's national team has had in
Canada and World Cup in 2015. That paved the way for us to have this World Cup coming in 2026.
And one of the key things that we can't forget in Canada is if we look at the last 10, 15 years, about 100 percent of the population growth has been
through immigration. And if you can, if you know what their favorite sport in their country of origin is, you know that soccer is here and it's here
to stay. We feel very bullish about the prospect of the game.
NEWTON: Yes. For those who've come to Canada recently usually you call it football. They are very passionate. I just want to give the last word here
to Peter because we're running out of time.
MORATORIO: Of course.
NEWTON: But, Peter, on that note, soccer everywhere for everyone. What were those funds do in places like Canada?
MONTOPOLI: Well, in Canada is going to continue to develop the sport. Diego is right. It's taken us 20 years to get this point. We feel like people are
saying it's an overnight success. Well, it's taken 20 years to get there. Women's World Cup, FIFA U-20 World Cup, FIFA U-20 Women's World Cup. Every
event that FIFA has hosted is added to the next level, and this one will add to the next level for all Canadians for development of the sport
significantly and for Canada soccer as well. That's where the funds do go to.
NEWTON: Sounds good. Peter and Diego, we will all be watching at the end of this week and of course be watching next year. We certainly hope those
pitches are ready because we don't want any more discussions about grass.
Thank you very much, Diego and Peter. Appreciate it.
That is QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD WITH JAKE TAPPER" starts now.
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END
