Return to Transcripts main page
Quest Means Business
Russia Launches Deadly Missile Attacks On Across Ukraine; Nobel In Economics Awarded To Trio For Work On Banks; AF447 Trial; U.K. Brings Budget Forward In Attempt To Reassure Markets; U.K. Budget Plan To Reveal How To Pay For $49B In Tax Cuts; Major U.S. Indices Set For Fourth Straight Losing Session. Aired 3-4p ET
Aired October 10, 2022 - 15:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: There is an honor to go before the close of business on Wall Street. You and I start a new week together. Not
particularly brilliant news, I'm afraid. Take a look at the numbers.
You'll see the NASDAQ is now hitting a two-year low. So, the bear market is entrenched for the time being, but otherwise, it is small movements in the
course of the day. The markets very much responding to the events of the day and this is what they're looking at.
Russia lashing out with airstrikes that target cities across Ukraine.
Kwasi Kwarteng has now moved the date of his budget forward. The bid to reassure and reinsure rattled markets.
And the new Nobel Laureate in Economics, Douglas Diamond joins me live. What can we learn about the banks in times of crisis?
Live from New York, together we start a new week on Monday. It's October 10th. I am Richard Quest, and I mean business.
Throughout the course of the day, Russia has unleashed its biggest missile barrage on Ukraine since the start of its invasion. The attack struck
cities like Kyiv and Lviv, far from the fighting in the east and the south.
Civilian targets were hit, this footbridge in the capital, as well as power plants and roads. A driver in Dnipro 500 kilometers to the south narrowly
escaped these blasts.
Ukraine says the strikes killed at least 11 people. President Putin says, they are Russia's response to this explosion of course, which was the Kerch
Bridge linking Russia to Crimea and President Putin threatened more.
(BEGIN VIDEO CLIP)
VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): If attempts to carry out acts of terrorism on our territory continue, Russia's response
will be harsh and its scale will correspond to that of the threat made against the Russian Federation. No one should be in any doubt about that.
(END VIDEO CLIP)
QUEST: You can see the escalation and how bad it is and how worse it might get.
CNN's Fred Pleitgen is in Kyiv tonight.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): It was in the middle of Monday morning rush hour that waves of Russian
missiles started hitting Ukraine's capital and other cities across the country, sending people scampering for their lives.
UNIDENTIFIED FEMALE (through translator): My hands are trembling as I've just seen how the missile was flying overhead and I heard that sound.
PLEITGEN (voice over): Ukraine says the Russians launched more than 80 missiles and more than 20 attack drones at targets in Ukraine. While the
air defenses took many out, they couldn't stop them all.
Ukraine's President quick to condemn the attacks.
VOLODYMYR ZELENSKYY, UKRAINIAN PRESIDENT (through translator): We are dealing with terrorists. They want panic and chaos.
PLEITGEN (voice over): Ukrainian cities like Lviv, Kharkiv, Dnipro, and multiple others reported power outages after Russia's attacks. The Deputy
Head of Ukraine's Presidential Administration telling me they are working to get the electricity grid back up and running.
KYRYLO TYMOSHENKO, DEPUTY HEAD, UKRAINIAN PRESIDENTIAL ADMINISTRATION: Of course, critically, for us, it is critical infrastructure like electricity
PLEITGEN (voice over): But Russian missiles also struck sites that were anything but critical. Several cars were destroyed at this busy
intersection outside a museum.
PLEITGEN (on camera): Even hours after the initial attacks by the Russian military, air raid sirens are still going off here in the Ukrainian
Look over here, you can tell, this is just one site where there was an impact of a Russian rocket. It absolutely ripped through the tarmac of this
road on this intersection, and the Ukrainians say, here five people were killed.
PLEITGEN (voice over): The attacks come just days after a major Russian logistics route, the Crimean Bridge was heavily damaged by an explosion.
Moscow blames Ukraine for the blast though Kyiv has not taken responsibility for the attack.
The Russian Army showed video of ships launching missiles toward Ukraine and Russian President Vladimir Putin acknowledged he is taking revenge.
PUTIN (through translator): A massive strike was carried out with high precision long range weapons of air, sea, and land based systems on energy,
military, and communications facilities of Ukraine.
PLEITGEN (voice over): But this clearly was not a command facility. In Central Kyiv, a playground took a direct hit, leaving a giant crater. The
capital's Mayor, former heavyweight boxing champ, Vitali Klitschko, vowing to stand strong.
PLEITGEN (on camera): Your message to Putin?
MAYOR VITALI KLITSCHKO (Kyiv, Ukraine): When they're going back to Russia empire, we see our future, part of European democratic family.
QUEST: The condemnation was swift from all sides. France's Emmanuel Macron described them as a profound change in the war. President Biden said they
demonstrated Vladimir Putin's utter brutality, and President Zelenskyy will address an emergency meeting of the G7 on Tuesday.
Nick Paton Walsh is in Dnipro. And, Nick, the first thing we should say is we were looking at the map earlier. And obviously, it was one of those
places targeted, I suppose, how was it when it happened?
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it appears from what we saw of the two strikes we know of here. They seem to have
tried to target the same building, but that building was an abandoned telecoms facility, speaking to people who -- well, the security guard
there, he said at the time it was hit, there may have been a few people inside of it.
But looking at its actual building itself, it has been abandoned and vacant, empty, missing windows, it seems for months, so unclear quite why
it was hit.
Also, next to it was a busy main road down with a civilian bus was traveling when the second missile slammed in. That critically injured five
people on the bus, many more taken to hospital as well. So, civilian casualties there, certainly, and windows blown out in a number of apartment
blocks that were just right next to that road, too. So blatant disregard for civilian life.
But Richard, it is important to point out to people, perhaps seeing this and thinking to themselves, the war has taken a significantly uglier turn.
Yes, in terms of the volume we've seen today, and the fact that cities that have felt perhaps the war was happening in a different part of the country
were hit today, particularly the capital, particularly Lviv.
But this is something Russia has been doing since the beginning. They have been hitting bomb shelters, they have been hitting hospitals, particularly
in Mariupol. So, civilian casualties are not new. I think what was new today was the volume of the attack, this attempt to use technology and the
fact that barely a city seemed to escape these least air raid sirens, if not actual missiles in the morning -- Richard.
QUEST: So from your experience and knowledge, Nick Paton Walsh, how long could Russia keep up this level of ferocity?
WALSH: Well, we don't know how many cruise missiles, the calibers they use, the other types of missiles they used today that they have in their
arsenal. And I would suspect that if they had an unlimited supply or a very large amount, we would have seen more of them being used over the past six,
seven months, particularly over the past disastrous month that they've been experiencing on the battlefield.
So, it's likely to be a limited commodity, and it is likely today that the ferocity they showed was to send a message to Ukraine, possibly, but also
to answer the loud critics inside Russia's own elite who are demanding a tough Russian military response for their abysmal failures of the past
And so I think, this is something we may see a little more of. Do I think we're necessarily going to see this volume of attacks happening nightly,
until there's a change in things in Ukraine? I don't think they really necessarily have that.
We'll have to be surprised if that is the case, but this may be designed to show force, to show that Vladimir Putin can control the narrative if
required, and potentially make people feel there is still some military might left of a military that is struggling to get its partially mobilized
conscripts into uniforms and with food to the frontline -- Richard.
QUEST: Take care and safe, Nick Paton Walsh in Dnipro.
The force that Nick was talking about just there, Ukraine says 84 Russian missiles -- cruise missiles were fired in its territory and Ukraine says
the Kremlin used 24 Iranian-made attack drones.
Also, piling on, Belarus, one of Russia's few European allies, says it will participate in a joint deployment of troops. It has so far not committed
any troops to Russia's invasion of Ukraine.
We need to look at the military aspect of this. CNN's military analyst is retired Colonel Cedric Leighton. He is with me now.
Colonel, so let's just dissect this because you and I have talked before about what Putin still has in his armory, short of the tactical nuclear
weapons. Is this just a case of more of the same and similar? Or is he actually using more powerful weapons and missiles now?
COL. CEDRIC LEIGHTON (RET), CNN MILITARY ANALYST: Right now, Richard, it's more of the same and similar. The types of missiles that he used in this
particular case, the 84 missiles that Ukraine says were launched against it today. They are a part of the same arsenal that he has used since the
beginning of this war, and the types of missiles include the cruise missiles, the caliber that Nick mentioned in his report. There's also the
Iskandar missile, each of these missiles have the maximum range of somewhere between 400 and rumored to be 500 kilometers.
So, these missiles are important to the Russian arsenal. They are a considerable part of the Russian arsenal and that is basically more of the
same type scenario that he is employing here.
QUEST: Right. Between what we're seeing now, and God forbid, a tactical nuclear weapon, what else does Russia -- is Russia believed to have that it
LEIGHTON: So, there are various weapons systems that they have, including some of the newer weapons that like the Avangard system that uses -- the
hypersonic missiles, some of which were actually used at the beginning of this conflict. So far, they have not been used in this particular phase of
the conflict, but that is certainly something that he could use short of the tactical nuclear weapons.
And I guess I should also say that the Avangard can be fitted with a tactical nuclear weapon. So it could be made to do what he wants to do in
that case, as well.
QUEST: Putin -- can he make progress simply by using, if you like, distance war, missiles? Can he get what he wants by continuing to prosecute
the war this way? Or eventually, does it come down to further territorial games?
LEIGHTON: It really matters, you know, in the sense of a completion of the war, if he goes with the territorial game part of this. So, if he does it
this way with a standoff type war, that is not going to get him the types of results that he is envisioning.
He would want to -- his initial war games included the decapitation of the Ukrainian government, those kinds of things, he will not be able to achieve
that, unless he gets a direct hit on a government institution with people in it. He will not be able to achieve that using this type of distance
So this type of warfare is not going to be effective in the long run. It will expend a lot of munitions. He has probably spent somewhere around $300
million, just in the launching of these missiles today, but that's the kind of thing that he has to evaluate and make the calculation on.
QUEST: Okay. Now, he also has another problem, doesn't he? In that he can't replace these missiles and these higher tech warfare as easily
because of international sanctions, and perhaps he can't get his hands -- I'm sure there are ways at the right price to get the necessary
semiconductors in this, but it's not going to be easy.
And we've seen this in the West. Even the Pentagon, the MOD, the German Defense Ministry have all admitted that they are potentially running short
of missiles and need to rearm. It must be much worse for President Putin.
LEIGHTON: Yes, definitely, it is Richard and that is a very interesting point because every single major power in the world today is experiencing
some kind of munitions or weapons shortage, but that shortage is exacerbated by things like sanctions and that vehicle, that particular
international mechanism of sanctions against Russia has had a very profound effect on their ability to get chips into their weapons systems.
They are able to do some pretty good engineering with some fairly common household items. But even with those common household items, common
household chips that you find in like vacuum cleaners and washing machines, they still are not able to get the types of chips that you would need to
have the most effective weapon systems and that is going to be a serious detriment to Putin.
He can have a certain impact with these weapons, even in spite of the sanctions, but eventually he's going to run out and the chip shortage is
going to be a major component of those logistical difficulties.
QUEST: Colonel, grateful. I'm very grateful that we are clearing this up, even though it's grim news, but there we go, sir. Thanks you. We'll talk
Tonight on QUEST MEANS BUSINESS, we are delighted to have the Nobel Prize winner in Economics, one of the three who for their work on banks and
financial stability, we will speak to one of the winners after the break.
QUEST MEANS BUSINESS.
QUEST: Nobel Prize in Economics today awarded to a trio and that includes the former Fed Chair Ben Bernanke. Bernanke along with Professor Douglas
Diamond, and Professor Philip Dybvig were recognized for their work on banks and financial crises.
Bernanke, of course, knows the subject well. He was in charge of the Federal (Reserve) in the 2008 financial crisis when Lehman Brothers et
cetera collapsed. It required the Fed and Congress to take unprecedented measures. Since then, regulations have put the industry on firmer ground.
The Bank of England had to address systemic risk only this month, of course, you'll be aware. The other two winners are Professor Diamond and
Professor Dybvig and they are recognized for their work on bank runs, which has been applied to similar behavior during financial crises.
Professor Diamond is with me. He is the Economics Professor at the University of Chicago's Booth School of Business, an extremely eminent
school of business that collects Nobels beautifully.
Professor, first of all, thank you, congratulations -- many congratulations for this. It is the right subject at the right time, if you consider what
we went through, through 2008 and 2010.
DOUGLAS DIAMOND, 2022 NOBEL LAUREATE IN ECONOMICS: Yes. That's correct. The work that I did with Dybvig and by myself, it was sort of informed by
the experiences of the 1930s around the world, but it turns out that the insights from thinking about those and what are the key features in the
financial system that make it potentially unstable fit pretty much exactly in the post Lehman period.
QUEST: One thing that was surprising, of course, in 2008 and 2009 was the prospect of a bank run. We saw it with Northern Rock and a couple of other
institutions elsewhere, even where deposit insurance and deposit protection existed.
DIAMOND: Right. So, part of the point of our paper is that because if you set up banks in the proper way, as opposed to a crazy way, they are still
subject to runs. That is one reason you need something like the government to prop them up and deposit insurance is probably the most notable way, it
is a little better than lender of last resort to prop them up.
In the Northern Rock case, it was a little more complicated because it wasn't just people pulling their money out, there were all kinds of
securitization, mortgages and things like that that they were also using as funding, so that the funding sources for something like that wasn't just
the traditional deposit.
In fact, that was the part of the point of the paper with Dybvig. It's not anything about banks, it's about any institution, that finances long-term
illiquid assets with short term deposits, or things like swaps that require collateral calls if you lose money or extra margin calls, things like that.
QUEST: So, we are seeing a bit of this now. Some of the major banks, JPMorgan, for example, Jamie Dimon, they've suggested that the post recent
crisis bank reserve requirements are now too onerous, that actually, they are required to put too much on deposit or in reserve. Is this a valid
DIAMOND: I mean, it could be. I think -- let me put it another way, I think the financial system and at least, the banking part of it is in a
much more resilient state right now than before 2008.
So we're going to get some fairly big shocks as nominal interest rates go up, and we try to fight inflation and we do quantitative tightening. We do
pulling liquidity out of the system. I think if we had the financial system that we had, in 2007, that could break from this current set of tightening.
I'm guessing that the banks will actually be okay in this period. If we see troubles, it will be outside the banking system, maybe even directly in the
corporation, the highly levered corporation sector.
QUEST: I guess, if we take the depression, and then we take the last few crises that we've had, we obviously learn from them, and we improve to
protect against them again. It is the unknown, isn't it? It is the one that comes along that we don't know.
So for you at the moment, if it is not an oxymoron, what is the unknown that you don't know that you're worried about?
DIAMOND: Actually, quantitative tightening that I just mentioned, we've never really tried it before, we haven't really tried quantitative easing,
where the government was just buying, buying, and buying long-term bonds in huge quantities and pulling them off the balance sheets of the private
And now to unwind that, we're going to be at least maturing, if not maturing out, if not selling those back into the market. And the question
is, is the withdrawal of liquidity is going to leave the financial system in a trickier state than we estimate. We sort of have to use guesses and
theory, essentially, to do it, because we don't have past experience.
The other thing that I'm worried about is just the fact that there are so many what are called leveraged loans out there, firms that issue loans that
are highly levered that are highly risky, and I've been worrying for a while that if there is a big enough shock, those firms when they can't
refinance those loans, could by themselves get in lots of trouble that could spread throughout the economy.
QUEST: Fundamentally, do you see current systemic risk?
DIAMOND: I guess, we are almost talking about the unknown unknowns. There is always going to be some systemic risk, just because the economy as a
whole, you know, refinances its claims on all of the plant and equipment more frequently than the plant and equipment pay off.
So, if everybody tried to ask for their money back, they couldn't possibly get it. So, it is always going to be a possibility that there is going to
be a systemic risk. If we knew exactly what it was in advance, we clearly wouldn't put money into something that was going to cause trouble. It's the
fact that there are certain parts that we can't predict, it is the fact that -- that's the prediction. There's always going to be a financial
crisis, and it's usually going to be in a fairly unexpected place, but if we have proper regulation and resiliency, that happens, you know, one time
in 50 years rather than, you know, 30 times with this year.
QUEST: Professor, I'm grateful. Congratulations again. Thank you so much, sir, for talking to us tonight. Thank you.
DIAMOND: My pleasure.
QUEST: It is one of the seminal air crashes in recent time. Air France, of course, the Flight 447 from Rio to Paris, and now, the two -- and now they
are going -- the airline and the manufacturer are going to stand trial over the crash over the Atlantic. Two hundred and twenty eight people were
Mary Schiavo is with me at the moment.
Mary, they are accused of not providing Air France sufficient training to pilots and Airbus is accused of not fixing a known fault. The reality is
here, we do know how this crash happened. There is no real dispute about what happened and how the pilot -- the junior pilot, who was the pilot
flying flew the aircraft. Does it meet the standard for the airline and the manufacturer?
MARY SCHIAVO, CNN AVIATION ANALYST: Well, no, it does not. But you know, the interesting thing is, there were three pilots on this flight, as you'll
recall when we talked about it years ago, as well, and when the most senior pilot came into the cockpit, he'd been on a break, he found that the most
junior pilot was pulling the stick back and it was a stall, they needed to push the stick forward.
So you know, clearly they knew what they should do, but in the end, they discovered from the cockpit voice recording and the flight data recordings
miraculously recovered two years after the crash from the bottom of the ocean floor that even after the most senior pilot came into the cockpit and
said, "No, no, no, push the nose down. This is a stall." The junior most pilot continued to pull the nose up -- at the end -- and sometimes as much
as 40 percent nose up, which is unheard of. And even at the end, as they were crashing, continued to pull it up.
So I think they knew, I mean, obviously pilots know, if you're in a stall, you put the nose down and regain that airspeed, but this pilot was clearly
QUEST: Right. But within -- I mean, the four minutes that it took to get from air to ground, besides being just unbelievably harrowing and horrific,
I don't even -- I don't even think any of us could even conceive what that would be like.
But Mary, you know, the one thing that always having sat in a sim and seen it recreated, and a senior instructor saying to me, if the pilot had sat on
his hands and done nothing, the plane would have jiggled around in the air, but it would have flown perfectly.
SCHIAVO: Well I don't know about perfectly, but the planes -- as you know, planes want to fly. They try to right themselves. Planes are manufactured
so they can in some situations balance themselves up, and the report from the French investigators was that maybe the pilots didn't realize that once
they lost reliable airspeed, their aircraft went from what is called normal law, meaning the computer tells the plane what to do if it is in a normal
situation, to alternative law where they didn't have airspeed protection.
And at some point, by the way, they didn't even have stall warnings because the nose was so high up. The aircraft said, "Oh, This just can't be."
So they were criticized for not -- for the pilots, apparently not understanding what happens in alternative law.
QUEST: Do you -- I mean, the way this goes, Airbus supposedly knew about the pitot tubes and didn't do anything about it. But I can't all help
feeling, and I don't want to blame it all on the pilots, when -- you know, that's the last thing we want to do. But there isn't -- there is a case to
be made on the pitot tubes, and there is a case that the pilots should have been better trained for the startle effect of these particular situations.
SCHIAVO: Absolutely. They said things were confusing in the cockpit and it was very startling. Well, when things are going horribly wrong, it is very
startling. And you know, I'm going to add one more entity in here for a little bit of blame.
The problem is, you correctly stated, it was known that these were tails or Thales T-H-A-L-E-S pitot tubes and that they had a problem in icing
conditions, which is what they had entered when they got into trouble.
SCHIAVO: But they didn't issue an airworthiness directive, meaning that's a mandatory replacement. And who issues the airworthiness directives? The
government does, and the FAA has been at fault for not issuing them sometimes, too. So, had they made this mandatory, perhaps it would have
QUEST: Mary, always good to talk to you. I'm so grateful you're available today. Thank you.
SCHIAVO: Thank you.
QUEST: Thank you, ma'am.
Now, the markets: A Halloween to remember. Well, Kwasi Kwarteng's new budget comes out on October 31st and his credibility depends on its
QUEST: Welcome back. Britain's chancellor, the finance minister could make Halloween even scarier for investors. He has selected the date of October
31st for a new budget released plan three weeks ahead of schedule and the plan is expected to reveal how the trust government will pay $49 billion in
unfunded tax cuts. Three days before next interest rate decision.
But after of course, two weeks, the emergency bond buying. Clarity is what we want to what the market is looking for after the previous budget,
torpedoed the markets. The Bank of England has been taking emergency action. And those expire ahead of the budget. Marc Stewart is with me in
New York. I'm not sure. I don't know. I mean, would you have chosen Halloween as the appropriate date (INAUDIBLE) the obviousness of the jokes
are there, but why did they decide to bring it forward?
MARC STEWART, CNN CORRESPONDENT: Well, I think as you mentioned, Richard, the markets, investors, economists, bankers, they all want some clarity.
I'm also going to add the words stability and reassurance to that plan. And I think the question is, is this going to be a wholesale new approach to
the budget where we will see some new innovations? Or is it going to be kind of a refinement of the past plan where we will see tax cuts on the
high yielding individuals, on businesses.
Or will there be reliance more so on borrowing? I think those are all the questions that the interested parties want to know. You did talk about
timing, you showed that timeline. I should also point out that on the day, this plan is revealed. The non-independent -- the independent financial
watchdog in the United Kingdom, the Office for Budget Responsibility is also going to offer its own assessments.
So there is more pressure on this new government to present something that will bring some credibility within the public at large. And then Richard,
of course, this is all happening on this backdrop of inflation, you know, 10 percent nearly in the United Kingdom. So there are a lot of obstacles
QUEST: You raise the point about -- the fact is they backtracked on the higher pay. They backtracked on a date, and now they've backtracked again,
on the date. All begs the question. If you could do it, then you should have all done it in the first place. Changing the date earlier for this
statement merely adds to an appearance at least of incompetence.
STEWART: Well and you could also argue as well -- I mean, as you know, the last thing that the investment community wants is a surprise. Surprises
don't go very well. That's what we saw here. And the surprise element is certainly not just limited to the United Kingdom. I was messaging with an
investor today who is part of a big portfolio. I mean, he wants stability, because what happens in the U.K. is going to also determine the value of
the U.S. dollar.
So whether that's incompetence or whether it's just perhaps an attempt to stay ahead of the game by creating this environment of no surprises. That's
what we're going to see. We'll see how it's digested.
QUEST: Marc, thank you. Marc Stewart. It's an awkward week for the British Chancellor as he also is going to Washington to the IMF annual meetings.
Less than two weeks ago, the IMF publicly rebuked him for the mini budget, calling it untargeted and at odds with monetary policy and they urge and
recommended it be withdrawn. Such a warning is almost unheard of, for an economy the size of the U.K.
U.K. backtracked on the tax cut and just one step into the long battle ahead for quite anxious establishes credibility. More trouble ahead, the
IMF could downgrade global growth this week. Vince Cable was the business secretary as the Liberal Democrat in the David Cameron coalition government
and a leader earlier. He joins us from London. So Vince, so you're going to get the dates and you're going to get the meter, you're -- the statement,
the budget, and it's going to be earlier than he'd said.
What sort of impression does it create when these changes happen every two or three days?
VINCE CABLE, FORMER BRITISH BUSINESS SECRETARY: Well, the oppressions domestically and foreign markets are not good. I mean, there are two
fundamental problems. And then one is political, the position of the government, the prime minister is structurally weak. And then she was
chosen by a minority of members of her own party which is a microscopic fraction of the British public.
She's supported by only a small minority of her own M.P. So position is weak. And she's underlying the weakness by just choosing supporters,
cronies like to be in her cabinet. So a political position is weak. And then in addition, we've had this, you know, fundamental misjudgment about
the fiscal policy and borrowing for tax cuts, which few people even sympathizers believe will have the effect of stimulating growth.
And there isn't simply a problem showing that the numbers add up. So that - - the external impression, and the internal impression is poor. They go to work hard to improve it.
QUEST: So, on the fundamental thought that the prime minister expressed at her conference last week, this idea of, we are going to do it differently,
we are going to go in a direction that some would say is contrarian. Is there another point that she could be right? And that expanding your way
through growth is an answer here?
CABLE: Well, it's right that we should expand and achieve growth. But it's a platitude. The problem is, how do you achieve it? And then in the short
term, we're heading to slower growth. In the medium term, Britain is going to have to increase its taxes because we have a very large deficit. Public
spending is under a great deal of pressure in terms of health, debt services going to rise.
The one thing that she can't afford to do without completely sacrificing credibility is accessing public investment, which was fundamental to the
whole idea of leveling the underdeveloped bits of the rich economy. So yes, of course, everybody wants to see more growth, but not at the cost of
destroying the environment, widening inequalities, problems of that kind.
QUEST: How long do you think the government, the chancellor, I'll be more neutral, how long do you think the British institutions, the Bank of
England, the Treasury, et cetera have to regain the trust of markets?
CABLE: It will be difficult and I think you've put your finger on the two key institutional challenges and then the Bank of England has to
demonstrate that it is entirely independent, it's not subject to pressure and it is going to have to adopt to tough approach on interest rates.
One of the strengths of the British economy over the last 30 years or so has been that the Bank of England has been genuinely in the independence
and this new administration undermined it by threatening to reform it, implying that people are going to be sacked. We've had a similar problem
with the Treasury. I don't agree with a lot of the Treasury orthodoxies and I'm borrowing to invest but they are a bastion of stability.
And their authority has been undermined by the sacking of the official. And it's going to have to be reestablished by making sure the numbers are up in
a couple of weeks time. And there will be a temptation for the government to make the numbers (INAUDIBLE) by showing how public expenditure will be
cut in three or four years time when it will no longer be in power.
QUEST: So Vince Cable, grateful that you found time for us tonight. Thank you, sir. I appreciate it.
CABLE: A pleasure. Thank you.
QUEST: On Thursday, it's a special time, QUEST MEANS BUSINESS is live from the IMF and World Bank, the autumn meetings that the policymakers keep and
a highlights of the panel with some of the world's top economic policymakers. We've got the IMF Managing Director Kristalina Georgieva, the
Eurogroup, President Paschal Donohoe, Nigerian finance minister Zainab Ahmed and the former Bank of England governor Mark Carney. 4:00 p.m. in
Washington, 9:00 in London.
QUEST MEANS BUSINESS specialization from the IMF. I'll be back with you at the top of the hour for the dash to the closing bell. Next, Inside Africa.
QUEST: That time of the day, dash to the closing bell. I'm Richard Quest. We are just a minute and a half or so away from the end of trade at the
start of the weekend. They are marginally lower, but as you can see the losses are seriously paired. Many investors are waiting for Thursday's
inflation report and we're getting of course the start of Q3 earnings, Up and down throughout the session now down just around 100 or so points.
NASDAQ taking the brunt it's off one percent. It's now at its lowest level for two years. New U.S. trade restrictions are sinking chip stocks. That's
the reason the Dow components. Take a look and you'll see Microsoft and Intel near the bottom. That's expected. Reflecting that tech, otherwise
Walgreens and Boots Alliance is popping up some 4-1/2 percent. Earnings reports on Thursday before the bell, Merck is right behind.
That's the way the markets are looking at the moment. I'm Richard Quest. We'll have it all again tomorrow.
Whatever you're up to in the hours ahead, I hope it is profitable. John Berman has "THE LEAD" (INAUDIBLE)