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Quest Means Business
Global Markets Rattled, First Republic Slides Despite Rescue; SVB Crisis has Echoes of Previous Bank Crises; Biden Calls For Tougher Measures On Failed Bank Execs; Enormous Seaweed Mass Threatens Tourism Across Caribbean. Aired 4-5p ET
Aired March 17, 2023 - 16:00 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 hour to go of trading go, at least, we've come to four o'clock, the markets are just about to
close I should more properly say with the clock time change.
The markets are now closing down one-and-a-quarter percent. We are off 390 odd points. Just pause for a bit of the bell, a bit of a cheer.
There you are. As you can see, the market was down for the whole session. There wasn't even really -- it was miserable throughout. Those are the
markets. We'll talk about the main events and they are related as you see, investors continue to selloff bank shares over fears of the industry's
health. On this program, the former head of the ECB, Jean-Claude Trichet is with me.
President Biden is calling for tougher penalties for the executives of failed banks.
And the International Criminal Court has issued an arrest warrant for President Vladimir Putin.
The markets are now closed, live from New York, it is Friday, it's March 17th. I'm Richard Quest, back in New York, and I mean business.
With the close of business in New York, so a chaotic week for the markets has ended. Investors are not at all convinced the banking turmoil is over.
The three major averages are down, the worst being the Dow Jones, which is off one-and-a-fifth. The S&P is also -- and the NASDAQ as you can see, down
shy of three-quarters of a percent.
The rescue of First Republic by its larger peers didn't soothe its investors. The share price crushed the best part of 33 percent, and the
bank has announced that it is suspending its dividend.
And yet if you look at the S&P, you can trace the week and the crisis very elegantly.
So let's go back to last Friday, where you have SVB's collapse. Then on Sunday, you have Signature Bank being taken over; Wednesday, it's Credit
Suisse in trouble, and by time you get to Thursday, there is the 11 banks rescuing First Republic.
Rahel Solomon is with me.
Rahel, the week has been a series of events, with regulators and private banks moving in to prevent contagion or getting worse. Are we any wiser as
to how wide and far this is going to go?
RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: I missed that last part, but if you said are we any wiser about sort of the impact? Look, I think the dust
has yet to settle, Richard, right, and that is what you're seeing reflected in the market.
Investors, the investment community essentially waiting for the next shoe to drop, and the reality is that investors don't feel like even despite all
of that intervention that you just laid out there, Richard, that it will be enough, right, that we might still see some weakness, even with a First
Republic Bank, even with some of the regional banks and just the huge impact that has been on lending, in terms of the large US economy.
I just want to share with you for a moment, Richard, a stat that caught my eye today. These small and medium-sized banks, which we've just been
throwing around this week, these are major sources of lending. They account for 45 percent of consumer lending in the US. They account for 60 percent
of residential real estate lending.
So you have to imagine, in an environment like this where banks know that the heat is really on them, as they pull back on risk, as they pull back on
lending, they have to think about the knock-on effects and the spillover that then has on Americans and consumer spending, the economy, recession
risks, et cetera, et cetera.
QUEST: That is a fascinating aspect to it, which -- I mean, that could be doing the Fed's work for it. I know that's somewhat perverse, and the Fed
probably would prefer not to have it done in that way.
But if they do pull back on spending or lending, then there will be a greater slowdown in the economy.
SOLOMON: It's a great point, Richard. I would agree that it is a bit perverse. In fact, Goldman Sachs pointing out that the pullback that we see
in lending could essentially be the equivalent of 25 to 50 basis points in a rate hike.
So certainly making that point that this is doing a bit of the Fed's work, but Richard, as you know, the challenge remains the same, right? That if
you overdo it here, that it over does it in terms of inflation, that it over does it in terms of the recession risk and potentially causes more
damage and more pain than is necessary.
QUEST: Rahel, thank you. Thank you very much.
Now, on the other side of the Atlantic, there's been all sorts of issues going on with Credit Suisse, which received, of course, a more than $50
billion lifeline, and yet investors remain unhappy, down eight percent. It is mere a 1.8 Swiss francs, the shares.
QUEST: It is the $54 billion lifeline that has really got -- been questionable because it's not fully restored confidence, and that may have
more to do with the Credit Suisse's business model, the liquidity.
Anna is with me, Anna Stewart in London. So essentially, the Swiss National Bank, the SNB has said, we're not letting this go out of business. What's
wrong with the model?
ANNA STEWART, CNN REPORTER: Well, essentially what they did was they gave a magic pill that they hoped would solve some of the symptoms, at least short
term, but this is not the medicine really that Credit Suisse needed because liquidity isn't at the forefront of the big problems facing Credit Suisse.
And the problems facing Credit Suisse are problems we've had now for months, and actually years and it is in the middle of a restructure, but
perhaps it's not going fast enough, perhaps it's not doing enough with the restructure because investors have certainly lost patience.
Now, a lot of this is its investment bank, which we know is loss making. They are trying to spin that off. But what to do with the more profitable
elements like the domestic bank, the wealth management, the asset management? Will those at this stage need to be spun off as well? Perhaps
Credit Suisse is actually not worth as much at this stage as the sum of its parts, and perhaps that's going to be the solution.
I have to say, a few weeks ago, we were talking, you asked me what was going to happen? I said, muddle on through. I take it back, Richard, I
think more will happen than that now.
QUEST: Okay. But what? I mean, do you break it up? I think the fact that this SNB stood behind it means it's not a -- it may not survive as an
entity at the moment, but it's not going to go away.
STEWART: There are options. Option number one is do nothing. I suggest that's probably not viable at this stage. Option number two is sell off
some of the parts so get a much cleaner operation in place. Option number three is a complete takeover and that is something that is spoken about, it
is actually one of the most likely options in JPMorgan's research note yesterday. Option number four, and this is kind of end of the line worst
case scenario, and we're not there yet, would be a failure and having the Central Bank take it over and then make these decisions, one of those
QUEST: Thank you, Anna Stewart. Have a good weekend, crises notwithstanding.
STEWART: Thank you.
QUEST: While the crisis it all has echoes of the past. It is also a very modern failure. Let me take you back to 1929. The stock market collapsed
and just before it really got nasty, bankers, including JP Morgan, Jr. went to the floor of the exchange and bought stock designed to inject
confidence. As the market tanked, it didn't work in the longer run.
In the 2008, GFC, Great Financial Crisis, it wasn't so much a bank run, the bottom fell out of the financial system. Policymakers had to act fast to
prevent the collapse. And then within that, as it became clear, then, of course, things moved on and it did become a run on banks.
With SVB, the collapse happened in real time because of panic spread on social media. Throughout the week, we've heard from startup founders with
money in the bank about how fast it was before they took it out.
(BEGIN VIDEO CLIP)
FLORIAN SIMMERDINGER, CEO, SOUNDBRENNER: I remember going to bed, checking Twitter as I do every day and everything was fine. Then, you know, being
based in Hong Kong, I'm in a different time zone than in the US, so by the time I woke up in the morning, it was already too late.
STEFAN KALB, CEO, SHELF ENGINE: On Thursday, our wire was not honored. We were just past when they stopped wiring money, and so we knew that we were
kind of stuck from that point forward.
ASSAF RAPPAPORT, CO-FOUNDER AND CEO, WIZ: It's a bank that's helped the ecosystem for 40 years and build trust for 40 years, and in 40 hours, it
(END VIDEO CLIP)
QUEST: Jean-Claude Trichet is the former ECB President and former Governor of the Banque de France. He is with me from Paris. Let's deal with that
first. The speed under the new regimes, if you will, where chat groups, people can withdraw money using their phones. It has sped up the
possibility of a run on bank, which doesn't allow policymakers really the luxury of time to consider what to do.
JEAN-CLAUDE TRICHET, FORMER ECB PRESIDENT AND FORMER GOVERNOR OF THE BANQUE DE FRANCE: Yes, indeed, Richard, we in the new world, in comparison with
2009 with many crises of the past, but we know that since Northern Rock, we know that since Lehman Brother and of course, we have vivid example of the
financial sphere being a global village with SVB on the one hand, the Credit Suisse, on the other hand, connecting if I may, through contagion or
through a little bit of panic.
TRICHET: Because fortunately, Richard, as you know, the authorities were very swift also in line of course with this new world where we are, and the
Fed, the FDIC, the authorities in the US and in Switzerland, took decisions that were very bold, very rapid, but it was of the essence, of course.
QUEST: So people like myself have been broadcasting all week, and no way answering the question, is this a major crisis? And I always start off by
saying it's not 2008 all over again. The rot hasn't gone through the entire financial system.
But, Mr. President, we can talk ourselves into a crisis by creating a self- fulfilling prophecy here, can't we?
TRICHET: No, it's true and it is also true obviously that we are in a fragile financial sphere, because we have accumulated obviously, a lot of
outstanding credit, public and private, since Lehman Brothers, and we have also a world which is, of course, not less favorable from the standpoint of
interest rates than it was during the last 10 years since inflation came back with a vengeance.
So all of that being said, vigilance is of the essence in this world. No complacency of any kind should be accepted. And that is very important,
because it means that all the rules and regulations of Basel III, for instance, for the banks, should be fully respected.
We are not fully respected, I have to say, in the case of the regional banks in the United States of America, the net stable funding ratio was not
respected, there was some kind of waiver. But that being said, we are living in a world which is fragile, and it calls as I said, for a lot of
But that being said, I don't trust that the sequence in which we are today will be the equivalent of Lehman Brothers. One of the main reason is that
the authority knows that we are in a fragile world. In the case of Lehman Brothers, you might remember that there was the full acceptance of the fact
that the authorities would not intervene at the very beginning, and we had the full-fledged bankruptcy with all the consequences that we all know.
So we are in a different world, fortunately, but that doesn't mean that we can be complacent.
QUEST: This issue of moral hazard, I am aware it is a harsh concept. But the reality is, the moment the -- for whatever justifiable reasons, the
moment the authorities said everybody in SVB will be made whole, you are de facto saying banking crisis will always pay out that the customers because
yes, never mind the widows and orphans.
The argument here was there's too many small businesses who've got wages to meet. Well, that's the same in every banking failure. There are too many
small businesses over the deposit insurance. So moral hazard is a thing of the past?
TRICHET: No, no. And, again, as you know, in the case of SVB, if I'm not misled, of course, there has been generalization of the guarantee for all
deposits, including the non-insured deposit. But of course, the owners of stocks and shares have, a real, I would say loss, and this is for real, of
So again, we have to be very cautious and prudent. Maybe things could have been done better, with some difference made between the insured deposits
and the uninsured deposit. We have to reflect on that. And your remark on moral hazard is absolutely clear. It's a very, very important remark.
But there are ways in my opinion for the authorities not to embark in moral hazards, I would say a reason, but also to be able to avoid the catastrophe
because the catastrophe would be much worse, of course. And again, I don't criticize what has been done on both sides of the Atlantic in the cases I
QUEST: Sir, I'm grateful to you, as always. Thank you for joining us. Have a lovely weekend. Very kind of you. Thank you.
TRICHET: Thank you very much indeed, Richard. All the best.
QUEST: Jean-Claude Trichet, thank you.
Coming up next, the International Criminal Court is accusing Vladimir Putin and one of his officials of war crimes. Clarissa Ward is at The Hague with
QUEST: The Kremlin says it's outrageous and unacceptable for the International Criminal Court to accuse Vladimir Putin of a war crime. The
arrest warrant for the Russian President accuses him of illegally deporting children from Ukraine.
The Hague is going after Russia's Commissioner of Children's Rights, Maria Lvova-Belova. The ICC President told us why it was so important to make
these arrest warrants public.
(BEGIN VIDEO CLIP)
JUDGE PIOTR HOFMANSKI, PRESIDENT, INTERNATIONAL CRIMINAL COURT: Well, obviously, the arrest warrants are not the magic wands. This is not the
case that the violence will stop now. But we believe for the deterrence effect of the arrest warrants in our proceedings, issue denial proceedings,
and we believe that is a very important signal for the world that we are doing our job, that the victims are not left alone.
We have not forgotten, and we just are doing what is expected in their own status.
(END VIDEO CLIP)
QUEST: Chief international correspondent, Clarissa Ward is at The Hague this evening. The interesting thing about this as well, everybody says,
well, they've got very little to zero chance of getting Putin to The Hague anytime soon. The history of the ICC is that over time, that increases the
possibility they will get him.
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, it's interesting that you should say that, Richard, because that is exactly the
question that we put to the Chief Prosecutor, Karim Khan when we asked him about, you know, whether this is primarily symbolic or whether this could
potentially result in President Putin having to face his day in Court.
He talked about the historical significance, just the very fact that this is the first time in the ICC's history that a sitting Head of State of a UN
Security Council member has been issued with an arrest warrant, and he went on to say essentially that one should not underestimate the wheels of
justice. Take a look.
(BEGIN VIDEO CLIP)
WARD: Do you believe it's possible that one day, we will see President Vladimir Putin in the dock?
KARIM KHAN, INTERNATIONAL CRIMINAL COURT CHIEF PROSECUTOR: I think those that think it is impossible fail to understand history because the major
Nazi war criminals -- Milosevic, Karadzic, Mladic, former President Charles Taylor, Jean Kambanda from Rwanda, Hissene Habre -- all of them were mighty
powerful individuals and yet they found themselves in courtrooms whose conduct was being adjudicated over by independent Judges, and that also
just cause for hope, that the law can, however difficult it may be, the law can be supreme.
WARD: So is the message today that nobody is above the law?
KHAN: I think the message must be that basic principles of humanity bind everybody, and nobody should feel they have a free pass. Nobody should feel
they can act with abandon, and definitely, nobody should feel that they can act and commit genocide or crimes against humanity, war crimes with
(END VIDEO CLIP)
WARD: Now, the focus, obviously, of today's arrest warrants is the forced deportation of thousands of Ukrainian children from territory inside
Ukraine held by Russia into the Russian Federation, but Khan wanted to stress that that is not the only line of investigation that they are
They have made multiple trips to Ukraine. There are multiple war crimes to be investigated, and while this specific warrant pertaining to the children
is looking at potential war crimes, technically speaking, under the Rome Statute, the sort of founding principle of the ICC, genocide also entails
forced or can entail forced deportation of children.
So it is also possible that the charges could change from war crimes to crimes of humanity, or even genocide, meaning there is still a lot of
scope, Richard going forward for Khan and his prosecution team to push further charges.
QUEST: The interesting thing about the ICC is that Russia doesn't recognize it, China doesn't recognize it, even the United States, it doesn't
recognize it. So, now we have the somewhat strange position that the US will no doubt trumpet that how, you know, the ICC has indicted, or put a
warrant out for the arrest, but it is an organization that most of the superpowers don't recognize.
WARD: And that's been the trouble that the ICC has come up against time and time again, the allegation that it is overly bureaucratic, that it is
essentially toothless, that unless you have countries like the US, China, Russia, India, signing on, that it is very limited in terms of what can
actually be done.
And, you know, we did put this as well to Karim Khan, and he basically says that he hopes this can be a moment in which potentially that could change,
and there is more scope potentially for cooperation with the US, for example, which as you rightly point out, has often had a very
confrontational relationship with the ICC.
And I think he really sees it as part of his mandate to try to ensure that international law is as relevant as possible, and that it becomes a real
lever of justice, not in a sort of geopolitical construct. But for the victims of these war crimes, for people living on the frontlines in refugee
camps. Those are the people who desperately need for things like today's investigations and today's arrest warrants to be properly enacted, even if
that takes a long time, although the hope and effort again of Khan's team is to try to precipitate that process to make it work more quickly and more
efficiently -- Richard.
QUEST: Clarissa, thank you in The Hague, this evening.
China and Russia have announced that Putin will host the Chinese President Xi Jinping in Moscow next week. This will be President Xi's first trip to
Russia since Russia invaded Ukraine.
The Foreign Ministry in China said the visit will take place from Monday to Wednesday at the invitation of the Russian President and confirmed that the
war in Ukraine would be a core part of the talks.
The Foreign Ministry spokesman Wang Wenbin said China's proposition boils down to one sentence, which is to urge peace and promote talks.
In Taipei, CNN's Will Ripley reports.
WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: . to the West, Despite now this news of an arrest warrant against Russian President Vladimir Putin
that President Xi Jinping is going to visit him in person, his first overseas trip since getting this massive endorsement in Beijing for an
unprecedented third presidential term.
President Xi is really making his priorities crystal clear here, and those priorities are not working with the United States and the West in trying to
punish Russia for its unprovoked invasion of Ukraine. Note, China has not condemned it. They say that Russia's security concerns are justified.
They've never criticized Russia or even called it an invasion even in this peace plan that they drafted up claiming to be neutral, while having
regular communication between Xi and Putin.
RIPLEY: And on top of it, even though China and Russia are saying that they are going to be talking about strategic cooperation, signing important
bilateral documents, a partnership that will benefit their peoples and benefit the world, there is real concern in the United States and NATO,
that they're also going to be talking about something that could change the whole equation on the battlefield in Ukraine, and that is sending Chinese
weapons in, Chinese weapons that would potentially give Russian soldiers a far greater fighting edge than they have right now, and that could be very
problematic analysts say for the Ukrainians, even with the Western weapons, primarily from the United States flowing in.
So the outcome of this meeting between two strong men in Moscow with all the storm in the West about this arrest warrant, they're going to be
talking about something that could have real life and real death implications on the battlefield in Ukraine.
Will Ripley, CNN, Taipei.
QUEST: Now, to France where the government faces a no confidence vote over its controversial pension reform. People there are furious that the
retirement age was raised without a vote in the National Assembly taking place.
Some of the protests that took place today, you're looking at the moment. The Mayor of Paris says 10,000 tons of trash have been left uncollected on
the streets, and protesters last night set fire to that rubbish. More than 300 people have now been detained across France.
CNN's Sam Kiley is in Paris tonight.
SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Richard, here I am on the Place de la Concorde, where there are several hundred riot police
have bottled up a large number of demonstrators, it is, I think, coming to the end, but they've got them bottled up here on the opposite end of the
square to where they had begun their demonstrations, which was partly to attack these monuments that are being renovated.
But at the end of the square and just across the river, the other side of the Seine is the National Assembly, and that is where really the
spontaneous demonstrations started when the government of Emmanuel Macron's ruling party said that he was going to use presidential fiat to force
through legislation that would mean that the pensionable age in this country has been raised from 62 to 64.
Now, not, you would imagine the sort of thing that would bring people out in most countries to near riots. But here, after what happened in the
National Assembly, that building at the end day with the blue lights underneath, there have been now two evenings of relatively violent
demonstrations, very, very heavy police presence indeed, because from Macron's perspective, he mustn't allow this to catch fire.
The reason for that is later on, on Thursday this week coming the unions, that's private and public sector unions are expected to bring many millions
out to strike, and perhaps even that kind of number to demonstrate against his policy.
So it's very important for him as a President, that this doesn't escalate beyond what the unions and he wants, which is quieter forms of
demonstration, but he is also facing on, Monday, Richard, a potential no confidence vote.
Now, it is unclear as to whether or not that would go against him because of the many different factions in the National Assembly, but if that were
to go against him, of course, he is not going to be affected because he is not elected here by the National Assembly. He has his own franchise --
QUEST: Sam Kiley in Paris tonight as the situation settles down. Thank you, sir.
New restrictions could be coming for failed bank execs in the United States President Biden's regulation wish list, and joining me will be a member of
the US House Financial Services Committee. Jim Hines is just next.
QUEST: President Biden wants tougher penalties for the executives of failed banks. He's asking Congress to give the FDIC more authority which would let
them make executives return compensation after a failure. Lower the threshold for fines and bar failed executives from working in other banks.
It follows the report that the CEO of SVB sold more than $3 million worth of stock in the days before the bank crashed.
Jim Himes is a U.S. House Democrat, a member of the Financial Services Committee. The Congressman joins me from Washington, D.C. Good evening,
sir. I'm grateful for you. Thank you. And I sort of have a certain weariness that we're talking about regulation to, if you like discord or
punish. I thought we did all this back 10 years ago after the great financial crisis. So, why are we doing it again?
REP. JIM HIMES (D-CT): Well, Richard, I -- you're right. Dodd Frank, of course, gave the government the ability to claw back bonuses that were
awarded to executives, prior to banks having difficulty. Now, the problem is, as we're now learning, that that authority may not be specific enough
to allow for that in the case that we of course, we've been dealing with in these last couple of days.
And you know that the underlying issue here, of course, is that it is not hard in the financial services industry, certainly in the banking industry
to make more money simply by taking on more risk. And so, I do think we've got to look into see whether we need more expansive authority to make sure
that accountability is visited on those people who take unnecessary risk.
QUEST: The problem here is they took more risk, but with not very risky assets. In the sense that, you know, we're not -- we're not -- we're not
back at GFC with subprime and various tiers of mezzanine finance. Here, we're talking about rising interest rates, which cause problems in balance
sheets, basically. And I'm wondering why regulators in California, banking regulators, state banking regulators weren't more on the job.
HIMES: Well, I'm Richard, I'm not sure I agree. I mean, yes, United States treasuries have no repayment risk at all. Of course, assuming that we get
the debt ceiling done. They have no repayment risk, but it's banking 101 to know that any long-dated bond, any, you know, anything is not very, very
short term in the fixed income in the bond world. As rates rise, the value of that bond will go down, even if it is the United States Treasury.
And that's precisely what happened. And again, it's banking one on one. It's the thing that people first learn when they go to work at a place like
Citibank or J.P. Morgan or presumably Silicon Valley Bank.
So, they were absolutely not risk-free securities in the context of rising rates. And these bankers back to your earlier question, they get paid an
enormous amount of money to manage that risk. And they just blew it on one of the most sort of fundamental principles of banking this time.
QUEST: So, how do regulators stop -- I mean, people, you'll tell me, and I will agree that this is not 2008 all over again. But the speed of
communication that we've seen. Earlier, I was remembering 1920s and Morgan buying a stock on the floor of the exchange, Northern Rock bank runs. This
happens faster, and regulators as they did this week have to be sharper.
HIMES: That's exactly right. And again, you need to divide -- you need to sort of draw a little bit of a line between the obvious things that Silicon
Valley Bank got wrong, you know, the fact that you can lose a lot of money on a long-dated bond in a rising interest rate environment. And the things
that are sort of unique here, which is, I was on a call with regulators and -- one of the regulators made the point that this bank operated in a
uniquely incestuous was their word environment.
Meaning that the depositors and the investors and many of the people with relationships in his back were in various chat rooms together, you know,
sharing their concerns. And this is to your point about the speed of communication. It's worth, of course, us doing some work to figure out
whether other banks could be subject to that kind of community challenges. But it was unique in this case, I think.
QUEST: I am troubled, Congressman, by the moral hazard question. And I know, it's sort of a hard-hearted aspect of it. But deposit insurance was
designed to make ordinary people whole. When you have small businesses, who say what if you don't pay us all out? We'll have to put people out of
business, out of jobs, we can't make payroll, then they've got a valid point. But where do you draw the line?
Do -- doesn't --- for example, does deposit insurance need to rise to a more realistic amount? 500, 750,000?
HIMES: Well, that's a really good question. And so, we've we saw irresponsibility on the part of the risk managers inside the bank. I
suspect we're going to find just as you alluded to irresponsibility on the part of some of the supervisors in the bank. But let's face it, those
people who put $50 million into deposits in one bank knowing full well, it's on a sticker on the door of the bank that that account is only insured
to 250, they also bear some blame.
And this is where the moral hazard comes in. So, we know two things. We can't guarantee every last dollar in the banking system. That just -- that
creates an immense amount of moral hazard with respect to how the banks would then use those dollars. So, I think inevitably, we're going to see
treasures, and we are seeing treasures, move deposits into other short term, safe places for their cash.
The problem with that, of course, that's going to put tremendous pressure on our smaller and medium-sized banks. And we're going to need to grapple
in the medium term with what we need to do to make sure that we don't become a country of a couple of mega banks.
QUEST: OK. So, Friday night. We're all going off after a very long, exhausting week, as I'm sure you're on. You have plenty of work over the
weekend. Can you reassure us tonight it's not 2008 again?
HIMES: Oh, absolutely, Richard. This is -- this is nothing like 2008. In 2008, the money center banks, the city banks, I remember when Citibank
almost went belly up. We're overloaded with profoundly toxic paper. That is not true today. The fundamental structure of the banking system is very
sound. What we had was a panic where people said I need to withdraw my money now. That's a classic bank run. They've been happening for hundreds
The -- really where we are today bears almost no resemblance to the really toxic environment of 2008, 2009.
QUEST: Really wish -- all (INAUDIBLE) wish you a good weekend, Congresswoman. And thank you. As always, thank you for joining us.
HIMES: Thank you.
QUEST: Thank you. Now, a complete different attraction. Seaweed, massive, epic proportions, and it's heading towards the Caribbean. It's threatening
the summer tourism season. And it's a mass that spans more than 5000 miles across the Atlantic at the moment. And one researcher says it could pile up
as much as six feet of seaweed rubbish on the beaches. Locals in Barbados are already using thousands of dump trucks every day to keep the beaches
And the worst is yet to come in Florida. CNN's Layla Santiago reports from the Sunshine State.
JOE KAPLAN, RESIDENT, KEY WEST, FLORIDA: It's the ache in the summertime builds up and smells terrible.
LEYLA SANTIAGO, CNN CORRESPONDENT (voice over): Joe Kaplan captured these images about a week ago. Massive amounts of seaweed washing up at Smathers
beach. A beach he knows well, because he walks it several times a week.
KAPLAN: I was shocked when I saw it that day where it wasn't even Spring yet. It's still winter which is very unusual.
CHUANMIN HU, PROFESSOR, USF COLLEGE OF MARINE SCIENCE: And this is about a 5000-mile long.
SANTIAGO: Professor Chuanmin Hu is one of the leading experts on what many have referred to as a massive blob of seaweed heading to Florida's coast.
SANTIAGO (on camera): Fair to call it a blob?
SANTIAGO: No. We can't call it a blob. OK.
HU: I would never call that a blob.
SANTIAGO: OK. Why?
HU: Because it's not.
SANTIAGO (voice over): Satellite images, he says show it's not one massive body of seaweed, rather a bunch of patchy clumps traveling from West
Africa. It's called the Atlantic Sargassum Belt and is considered a natural phenomenon. Right now, it's twice the width of the U.S. carrying 6 million
tons of seaweed and headed to the east coast.
HU: In June of this year, it may turn into 20 million pounds.
SANTIAGO (on camera): So, let me get this straight. This what we're seeing the last month is six million tons and it's going to get bigger.
HU: Yes. There's no way to stop that. This is nature just like no one can stop a hurricane.
SANTIAGO: Should we be worried about that?
HU: Reason is Sargassum is not toxic.
SANTIAGO (voice over): But it smells pretty bad. And it's a nuisance for those trying to keep beaches clean to attract tourists. Just a few years
ago, here's what it looks like in Mexico. Officials in Monroe County, which includes the Florida Keys have set aside more than $200,000 to clean and
remove Sargassum from its beaches.
DAN MATTHEWS, OWNER, MISS CHIEF FISHING CHARTERS: Seaweed is a mixed blessing. We need it. Seaweed is a nursery for all these large pelagic
fish. The negative sides of that seaweed is if it comes in the concentrations that are believed we're going to see, our fishing grounds
are going to be completely covered with it. There's almost no point to fishing because we're going to be spending the entire day cleaning weed off
SANTIAGO: And as the Sargassum Belt heads toward Florida. Another natural phenomenon is already hitting its beaches on the West Coast. Red tide. It
can be toxic, kill fish and cause respiratory issues. This year's red ride concerns were enough to cancel at least one major event here in Indian
Rocks where one family visiting told us.
MARGO SAGE, CANADIAN TOURIST: That as soon as my son and my husband and I got out of our car, we all started coughing.
SANTIAGO: But for spring breakers like this group from Iowa, the concerns of massive amounts of seaweed or red tide were not enough to change
ANNA SANDERS, TOURIST: I would rather it'd be red tide than raining every day.
SANTIAGO: Tourists noting friends back home.
SAGE: They'd be pretty jealous regardless of having a little bit of the red tide symptoms. They'd be pretty jealous that we're here and they're not.
SANTIAGO: Because the pristine beaches of the Sunshine State are hard to resist for many, despite what may be looming offshore.
QUEST: And that is QUEST MEANS BUSINESS for tonight. I'm Richard Quest. Whatever you're up to in the weekend ahead, big gardening or whatever, I
hope it's a profitable time. Coming up next Africa Avant-Garde (INAUDIBLE)