WEBVTT 00:01.400 --> 00:03.533 align:left position:10% line:83% size:80% AMNA NAWAZ: Good evening, and welcome to the "NewsHour." 00:03.533 --> 00:07.966 align:left position:10% line:77% size:80% Regional banks took a beating today, suffering their deepest losses on the stock market in 00:07.966 --> 00:10.066 align:left position:40% line:89% size:50% years. 00:10.066 --> 00:12.766 align:left position:10% line:77% size:80% GEOFF BENNETT: It follows the failure of two major banks, and after the government's top 00:12.766 --> 00:17.766 align:left position:10% line:77% size:80% financial authorities spent the weekend taking action to shore up confidence around the larger 00:18.366 --> 00:20.333 align:left position:30% line:89% size:60% banking system. 00:20.333 --> 00:24.300 align:left position:10% line:77% size:80% No other bank failed today, but the pain is hardly over for certain banks. 00:25.433 --> 00:27.566 align:left position:20% line:83% size:70% Economics correspondent Paul Solman reports. 00:27.566 --> 00:32.166 align:left position:10% line:77% size:80% PAUL SOLMAN: Markets opened this morning, and investors promptly dumped bank stocks, 00:34.133 --> 00:36.633 align:left position:10% line:77% size:80% despite President Biden's efforts to reassure customers and investors. 00:36.633 --> 00:40.366 align:left position:10% line:77% size:80% JOE BIDEN, President of the United States: Americans can have confidence that the banking 00:40.366 --> 00:41.900 align:left position:30% line:89% size:60% system is safe. 00:41.900 --> 00:44.033 align:left position:10% line:83% size:80% Your deposits will be there when you need them. 00:44.033 --> 00:49.000 align:left position:10% line:77% size:80% PAUL SOLMAN: Damage control after the largest U.S. banking failure since the 2008 financial 00:49.500 --> 00:51.533 align:left position:40% line:89% size:50% crisis. 00:51.533 --> 00:55.300 align:left position:10% line:77% size:80% On Friday, regulators shuttered the Silicon Valley Bank, SVB, and promised that insured 00:56.766 --> 00:59.566 align:left position:10% line:83% size:80% depositors would have access to their money today. 00:59.566 --> 01:04.533 align:left position:20% line:71% size:70% But that left uninsured depositors with large accounts to pay their employees desperate. 01:06.566 --> 01:09.933 align:left position:10% line:77% size:80% Lindsey Michaelides, who runs the start-up Strongsuit, said she wouldn't be able to pay 01:09.933 --> 01:12.933 align:left position:20% line:83% size:70% her employees or even feed her own family. 01:12.933 --> 01:15.000 align:left position:20% line:89% size:70% On ABC, she elaborated. 01:15.000 --> 01:17.600 align:left position:10% line:77% size:80% LINDSEY MICHAELIDES, CEO, Strongsuit: We have people who just bought their first house, 01:17.600 --> 01:22.166 align:left position:10% line:77% size:80% and they're scared of, how are they going to make their mortgage payment and are they 01:22.166 --> 01:24.200 align:left position:20% line:89% size:70% going to lose their job? 01:24.200 --> 01:28.300 align:left position:10% line:77% size:80% PAUL SOLMAN: So, yesterday, the government extended its promise to all depositors, insured 01:28.300 --> 01:29.300 align:left position:40% line:89% size:50% or not. 01:29.300 --> 01:32.100 align:left position:10% line:89% size:80% Now, a bit of basic context. 01:32.100 --> 01:37.100 align:left position:10% line:77% size:80% Banks take deposits, on which they pay interest, and then lend out the money at a higher rate. 01:39.166 --> 01:42.533 align:left position:20% line:71% size:70% But depositors can now withdraw their money in a heartbeat, while the loans can't be recalled 01:43.433 --> 01:45.466 align:left position:10% line:89% size:80% or sold off that quickly. 01:45.466 --> 01:49.766 align:left position:10% line:77% size:80% Until yesterday, depositors at Silicon Valley and every other bank in America had their 01:51.400 --> 01:54.800 align:left position:20% line:77% size:70% deposits insured, but only up to $250,000 per person in most cases. 01:56.733 --> 02:01.700 align:left position:10% line:77% size:80% Problem was, almost half of all U.S. bank accounts are greater than $250,000, and thus 02:03.866 --> 02:05.433 align:left position:30% line:89% size:60% uninsured. 02:05.433 --> 02:09.866 align:left position:20% line:77% size:70% In SVB, uninsured money was almost 98 percent of all deposits. 02:11.766 --> 02:15.566 align:left position:10% line:77% size:80% That works so long as depositors believe the bank has enough cash in the vault. 02:15.566 --> 02:20.566 align:left position:10% line:77% size:80% And the banks are forced by regulators to keep a cushion of reserves, in supposedly 02:21.433 --> 02:23.500 align:left position:10% line:89% size:80% super safe U.S. Treasury bonds. 02:23.500 --> 02:28.233 align:left position:10% line:77% size:80% But, as interest rates have soared, those bonds have lost value, and, therefore, banks 02:30.000 --> 02:32.200 align:left position:20% line:83% size:70% don't have the cushion they once did. 02:32.200 --> 02:36.566 align:left position:10% line:77% size:80% What happened last week is that depositors like billionaire investor Peter Thiel pulled 02:36.566 --> 02:41.566 align:left position:10% line:77% size:80% their companies money out of SVB, which triggered a bank run not unlike during the financial 02:43.433 --> 02:47.533 align:left position:10% line:77% size:80% crisis or the Great Depression, frightened depositors determined to take their money 02:48.033 --> 02:50.133 align:left position:40% line:89% size:50% and run. 02:50.133 --> 02:53.900 align:left position:10% line:77% size:80% Which is why Treasury Secretary Janet Yellen and Fed Chief Jay Powell and the FDIC announced 02:55.900 --> 02:59.666 align:left position:10% line:77% size:80% yesterday that the government will now reimburse the uninsured depositors, to reassure the 03:01.166 --> 03:04.066 align:left position:10% line:83% size:80% likes of you and me and prevent a nationwide run. 03:04.066 --> 03:07.466 align:left position:10% line:83% size:80% That came as a big relief to people like Lindsey Michaelides. 03:07.466 --> 03:12.066 align:left position:10% line:77% size:80% And the government also threw a lifeline to customers of Signature Bank, which regulators 03:12.066 --> 03:14.033 align:left position:10% line:89% size:80% shut down over the weekend. 03:14.033 --> 03:16.100 align:left position:20% line:83% size:70% But some customers remained skeptical. 03:16.100 --> 03:20.933 align:left position:10% line:77% size:80% ALLYN EHRLICH, Signature Bank Customer: I'm coming here to see if I have to close my accounts 03:20.933 --> 03:23.066 align:left position:40% line:89% size:50% or not. 03:23.066 --> 03:26.933 align:left position:10% line:77% size:80% Hopefully, the bank will be bought by another bank, and I can keep my accounts here. 03:28.866 --> 03:32.400 align:left position:10% line:77% size:80% But if they're not or if there's any question, I want to empty my accounts and bring them 03:32.400 --> 03:34.433 align:left position:30% line:89% size:60% to another bank. 03:34.433 --> 03:38.400 align:left position:20% line:71% size:70% PAUL SOLMAN: And as some customers lined up outside Silicon Valley Bank today, trading 03:39.566 --> 03:41.400 align:left position:20% line:83% size:70% was halted in roughly a dozen other banks. 03:41.400 --> 03:44.066 align:left position:20% line:83% size:70% For the "PBS NewsHour," Paul Solman reporting. 03:44.066 --> 03:49.066 align:left position:10% line:77% size:80% GEOFF BENNETT: As you can see from the reaction today, plenty of questions remain about the 03:51.100 --> 03:53.866 align:left position:10% line:77% size:80% government's action and the potential fallout from the collapse of these two banks. 03:53.866 --> 03:56.000 align:left position:20% line:83% size:70% Simon Johnson is closely following this. 03:56.000 --> 04:00.700 align:left position:10% line:77% size:80% He's a former chief economist of the International Monetary Fund and a professor at MIT's Sloan 04:01.433 --> 04:03.366 align:left position:20% line:89% size:70% School of Management. 04:03.366 --> 04:07.266 align:left position:10% line:77% size:80% And Anat Admati is professor of economics at Stanford's Business School. 04:07.266 --> 04:10.666 align:left position:10% line:83% size:80% She has written extensively about the banking system. 04:10.666 --> 04:12.700 align:left position:20% line:89% size:70% Welcome to you both. 04:12.700 --> 04:16.666 align:left position:10% line:77% size:80% And, Simon, government agencies taking emergency measures to backstop the financial system 04:18.566 --> 04:23.000 align:left position:10% line:77% size:80% after the collapse of two banks, that sounds eerily reminiscent of what happened some 15 04:23.600 --> 04:24.833 align:left position:30% line:89% size:60% years ago. 04:24.833 --> 04:26.866 align:left position:20% line:83% size:70% Help us understand why this time is different. 04:26.866 --> 04:28.900 align:left position:10% line:77% size:80% SIMON JOHNSON, MIT Sloan School of Management: Well, let's hope it's different. 04:28.900 --> 04:32.900 align:left position:10% line:77% size:80% Let's hope we don't get this kind of serious repercussions we experienced 2008 and in 2009. 04:32.900 --> 04:37.800 align:left position:10% line:77% size:80% I think, this time, what we're what we're looking at is some relatively small banks 04:37.800 --> 04:41.700 align:left position:20% line:89% size:70% that had bad assets. 04:41.700 --> 04:44.033 align:left position:20% line:83% size:70% They had a lot of scared depositors. 04:44.033 --> 04:46.533 align:left position:10% line:89% size:80% There was a run on those banks. 04:46.533 --> 04:48.300 align:left position:20% line:83% size:70% And then people start to say, well, who's next? 04:48.300 --> 04:50.333 align:left position:20% line:83% size:70% What kind of dominoes could fall? 04:50.333 --> 04:53.533 align:left position:10% line:77% size:80% The government, through the Federal Reserve, the FDIC, and the Treasury Government, stepped 04:53.533 --> 04:56.733 align:left position:10% line:83% size:80% in this weekend, and has attempted to stop the panic. 04:56.733 --> 04:59.266 align:left position:10% line:83% size:80% And I think, so far, they have been quite effective. 04:59.266 --> 05:03.566 align:left position:10% line:71% size:80% GEOFF BENNETT: Anat, the government's expansive response here to stabilize the banking system, 05:04.733 --> 05:06.633 align:left position:20% line:83% size:70% do you think that will be enough? 05:06.633 --> 05:08.133 align:left position:10% line:77% size:80% ANAT ADMATI, Stanford University Graduate School of Business: We don't know for sure 05:08.133 --> 05:10.500 align:left position:10% line:83% size:80% because there are a lot of hidden losses in the system. 05:10.500 --> 05:12.733 align:left position:20% line:83% size:70% And it's just fragile all the time. 05:12.733 --> 05:17.733 align:left position:10% line:77% size:80% So, if you put a lot of backstops on it, then you will stem at least some runs. 05:19.533 --> 05:22.100 align:left position:10% line:77% size:80% But a lot of these accounts, deposit accounts, are very large. 05:22.100 --> 05:24.200 align:left position:10% line:89% size:80% So they are very finicky. 05:24.200 --> 05:26.266 align:left position:20% line:89% size:70% And they could run. 05:26.266 --> 05:29.566 align:left position:10% line:77% size:80% Now, when they raise the insurance limit to infinity, then people will stay home. 05:29.566 --> 05:32.000 align:left position:10% line:83% size:80% And that's what they did during the financial crisis as well. 05:32.000 --> 05:37.000 align:left position:10% line:77% size:80% GEOFF BENNETT: And, Simon, if the government says that we're going to guarantee deposits 05:39.000 --> 05:43.400 align:left position:10% line:77% size:80% above the established $250,000 threshold, doesn't that in some way reward irresponsible 05:46.033 --> 05:48.066 align:left position:30% line:89% size:60% behavior? 05:48.066 --> 05:51.100 align:left position:10% line:77% size:80% I mean, what's the point of bank risk management at all if the federal government is going 05:51.100 --> 05:53.766 align:left position:10% line:89% size:80% to come in and backstop it? 05:53.766 --> 05:57.200 align:left position:10% line:71% size:80% SIMON JOHNSON: No, I think what rewards irresponsible risk management is when you keep the management 05:57.200 --> 05:59.200 align:left position:20% line:83% size:70% on and when you protect the equity holders. 05:59.200 --> 06:01.400 align:left position:20% line:83% size:70% That's not what happened over the weekend. 06:01.400 --> 06:05.866 align:left position:10% line:77% size:80% Silicon Valley Bank, and in the other bank that failed, management has been removed, 06:07.000 --> 06:09.966 align:left position:20% line:83% size:70% and the equity holders have gone to zero. 06:09.966 --> 06:13.766 align:left position:10% line:77% size:80% The question of depositors is different, I think, particularly in this situation, particularly 06:13.766 --> 06:17.400 align:left position:10% line:71% size:80% in the modern world, particularly when Silicon Valley Bank, for example, on Thursday, about 06:17.400 --> 06:22.166 align:left position:10% line:77% size:80% a third of their U.S. deposit base tried to leave, withdraw on the same day, same business 06:22.166 --> 06:24.100 align:left position:40% line:89% size:50% day. 06:24.100 --> 06:28.166 align:left position:10% line:77% size:80% That's a digital economy phenomenon, I think, the intensity of that kind of run. 06:29.566 --> 06:32.633 align:left position:10% line:83% size:80% And, honestly, I think it's time to ensure all of deposits. 06:32.633 --> 06:34.533 align:left position:10% line:83% size:80% I understand not everyone's ready to go there. 06:34.533 --> 06:36.733 align:left position:20% line:83% size:70% And the government hasn't done that yet. 06:36.733 --> 06:41.100 align:left position:20% line:71% size:70% But once you do that, as Anat said, you stop anybody's incentive to move to another bank. 06:43.000 --> 06:46.500 align:left position:10% line:77% size:80% There has to be then, of course, very strong supervision, and high capital requirements 06:46.500 --> 06:48.533 align:left position:10% line:89% size:80% and very effective regulation. 06:48.533 --> 06:51.333 align:left position:10% line:77% size:80% And we have struggled on all of those over the past 15 years, but that's what you're 06:51.333 --> 06:53.366 align:left position:10% line:89% size:80% going to need going forward. 06:53.366 --> 06:55.966 align:left position:10% line:77% size:80% GEOFF BENNETT: So, Anat, as you well know, the blame game here in Washington is well 06:55.966 --> 06:58.000 align:left position:30% line:89% size:60% under way. 06:58.000 --> 07:01.966 align:left position:10% line:77% size:80% There are lawmakers pointing to what happened back in 2018 under the Trump administration, 07:03.900 --> 07:07.000 align:left position:10% line:77% size:80% when some of the Dodd-Frank regulations were rolled back for midsized banks. 07:09.000 --> 07:12.100 align:left position:20% line:71% size:70% In your view, what does responsible, practical regulation look like for regional community 07:14.166 --> 07:16.133 align:left position:30% line:89% size:60% midsized banks? 07:16.133 --> 07:19.766 align:left position:10% line:77% size:80% ANAT ADMATI: Well, I have ideas about what regulation should look like for all banks. 07:19.766 --> 07:22.300 align:left position:10% line:83% size:80% They always say, oh, the small banks are not a problem. 07:22.300 --> 07:24.366 align:left position:10% line:89% size:80% But then they are a problem. 07:24.366 --> 07:28.900 align:left position:10% line:77% size:80% All banks are a problem when they are run, with basically taking the upside and leaving 07:30.333 --> 07:32.400 align:left position:10% line:83% size:80% the downside to others, much more than they need to be. 07:32.400 --> 07:36.900 align:left position:10% line:77% size:80% So, you can have a bloated system in that way where, you know, everything's fine until 07:36.900 --> 07:39.066 align:left position:30% line:89% size:60% it's not. 07:39.066 --> 07:42.900 align:left position:20% line:71% size:70% So, the -- what Simon just mentioned, what I have been advocating for is a lot more what 07:43.700 --> 07:45.633 align:left position:20% line:89% size:70% they call capital. 07:45.633 --> 07:49.166 align:left position:10% line:77% size:80% But I think you have to be very careful that it's not thought of as some cash reserves 07:49.166 --> 07:54.166 align:left position:10% line:77% size:80% held on the sideline, but as equity funding coming from investors that cares about the 07:54.800 --> 07:56.700 align:left position:30% line:89% size:60% downside. 07:56.700 --> 07:59.500 align:left position:10% line:77% size:80% Right now, there's too little care about the downside in the private sector. 07:59.500 --> 08:03.466 align:left position:10% line:77% size:80% And when the downside comes, then they go running to the government. 08:03.466 --> 08:08.300 align:left position:10% line:77% size:80% GEOFF BENNETT: Simon, will this change the way the Fed calculates the next rate hike, 08:08.300 --> 08:09.300 align:left position:10% line:89% size:80% what happened over the weekend? 08:09.300 --> 08:10.300 align:left position:30% line:89% size:60% (LAUGHTER) 08:10.300 --> 08:11.300 align:left position:10% line:89% size:80% SIMON JOHNSON: I think so. 08:11.300 --> 08:13.266 align:left position:40% line:89% size:50% Geoff. 08:13.266 --> 08:14.500 align:left position:10% line:77% size:80% I mean, we will have to, obviously, see how the rest of the week plays out. 08:14.500 --> 08:16.533 align:left position:20% line:83% size:70% A couple of problems for the Fed here. 08:16.533 --> 08:19.500 align:left position:10% line:77% size:80% One is that it's their raising of interest rates that has caused some of these issues 08:19.500 --> 08:21.433 align:left position:30% line:89% size:60% for banks. 08:21.433 --> 08:24.033 align:left position:10% line:77% size:80% Now, why the Fed's own supervisors didn't flag that, very interesting question. 08:24.033 --> 08:25.566 align:left position:20% line:83% size:70% They're going to have sought that one out. 08:25.566 --> 08:27.666 align:left position:10% line:83% size:80% And then, of course, there's issues for the real economy. 08:27.666 --> 08:30.566 align:left position:10% line:77% size:80% Are there going to be problems because some people couldn't make payroll or because credit 08:30.566 --> 08:34.066 align:left position:10% line:77% size:80% is becoming -- going to become a little more shy under these circumstances? 08:34.066 --> 08:36.333 align:left position:10% line:77% size:80% That is all going to have to be factored into the Fed's decision-making? 08:36.333 --> 08:41.333 align:left position:10% line:77% size:80% GEOFF BENNETT: And, Anat, how do regular people know if their bank is well-managed, if they 08:42.966 --> 08:46.600 align:left position:20% line:77% size:70% happen to have their money stored away with small regional banks? 08:46.600 --> 08:50.633 align:left position:20% line:77% size:70% ANAT ADMATI: That's a great question, Geoff, because we don't. 08:50.633 --> 08:52.666 align:left position:10% line:89% size:80% And that's the whole idea. 08:52.666 --> 08:56.066 align:left position:10% line:77% size:80% We want to just trust that it's taken care of, and the job of people to take care of 08:56.066 --> 09:01.066 align:left position:20% line:71% size:70% it, just like the job of ensuring our safety on the roads, is of the policeman or, in this 09:03.600 --> 09:05.666 align:left position:20% line:83% size:70% case, their supervisors and regulators. 09:05.666 --> 09:08.966 align:left position:10% line:77% size:80% And they're the ones that are supposed to know that the assets are down in value, and 09:08.966 --> 09:13.033 align:left position:20% line:71% size:70% that there are a lot of uninsured deposits to this bank who are going to be unpleasantly 09:13.033 --> 09:14.300 align:left position:30% line:89% size:60% surprised. 09:14.300 --> 09:18.066 align:left position:20% line:83% size:70% So the key to all of it is effective regulation. 09:18.066 --> 09:19.733 align:left position:10% line:89% size:80% And we just didn't have that. 09:19.733 --> 09:22.000 align:left position:20% line:77% size:70% GEOFF BENNETT: What does effective regulation look like, in your view? 09:22.000 --> 09:26.400 align:left position:10% line:77% size:80% SIMON JOHNSON: Well, I think the cornerstone of effective regulation is to have, as Anat 09:26.400 --> 09:30.500 align:left position:10% line:77% size:80% said, very strong levels of equity, and real equity, not fake equity -- and there's many 09:30.500 --> 09:33.500 align:left position:20% line:77% size:70% ways that it can be fake -- the real equity that can absorb losses. 09:33.500 --> 09:36.366 align:left position:20% line:77% size:70% So, Silicon Valley Bank obviously didn't have enough equity. 09:36.366 --> 09:41.133 align:left position:10% line:77% size:80% They were running a $200 billion bank on a couple of billion dollars of equity at the 09:41.133 --> 09:42.133 align:left position:40% line:89% size:50% end. 09:42.133 --> 09:43.300 align:left position:20% line:89% size:70% That doesn't work. 09:43.300 --> 09:44.300 align:left position:20% line:83% size:70% That's when depositors start to worry. 09:44.300 --> 09:46.233 align:left position:10% line:89% size:80% That's how you get panic. 09:46.233 --> 09:50.166 align:left position:10% line:77% size:80% So, first and foremost, get the equity right, larger buffers, more resilient buffers. 09:50.166 --> 09:53.666 align:left position:10% line:77% size:80% And then, of course, you have to have sensible regulation about, how much risk is a bank 09:53.666 --> 09:55.766 align:left position:10% line:89% size:80% like that allowed to take? 09:55.766 --> 10:00.233 align:left position:10% line:77% size:80% Again, Silicon Valley Bank, we already know took a lot of risk, funnily enough by buying 10:02.666 --> 10:06.066 align:left position:10% line:71% size:80% government bonds, but they bought long government bonds, which were very exposed to -- which 10:06.066 --> 10:07.700 align:left position:20% line:83% size:70% fall in value when interest rates rise. 10:07.700 --> 10:09.733 align:left position:10% line:83% size:80% And they funded themselves with short-term deposits. 10:09.733 --> 10:13.433 align:left position:10% line:77% size:80% So they pay more on deposits, the value of their assets is less, they have no equity. 10:13.433 --> 10:16.300 align:left position:10% line:77% size:80% And that was the realization people came to on Wednesday of last week. 10:16.300 --> 10:21.300 align:left position:10% line:77% size:80% End of Thursday, the bank is gone completely, because they couldn't find enough liquidity 10:22.166 --> 10:23.100 align:left position:10% line:89% size:80% to match their withdrawals. 10:23.100 --> 10:25.200 align:left position:10% line:89% size:80% One day, that's all it took. 10:25.200 --> 10:27.233 align:left position:10% line:77% size:80% GEOFF BENNETT: Anat, what do you see as the ripple effect here for the tech sector? 10:27.233 --> 10:31.700 align:left position:10% line:77% size:80% ANAT ADMATI: Well, the tech sector got saved because they wanted to make payroll, and the 10:33.266 --> 10:35.333 align:left position:10% line:89% size:80% government didn't want panic. 10:35.333 --> 10:39.666 align:left position:10% line:77% size:80% So they kind of could breathe a little easier in terms of their deposits. 10:39.666 --> 10:42.133 align:left position:10% line:83% size:80% The tech sector funds itself in all kinds of ways. 10:42.133 --> 10:44.500 align:left position:10% line:83% size:80% A bank is not usually the way they fund themselves. 10:44.500 --> 10:45.700 align:left position:10% line:89% size:80% They go to venture capital. 10:45.700 --> 10:47.766 align:left position:20% line:83% size:70% They fund themselves in other ways. 10:47.766 --> 10:52.100 align:left position:10% line:77% size:80% So, the tech sector has its own problems right now, the crypto turmoil, all kinds of other 10:52.600 --> 10:54.700 align:left position:40% line:89% size:50% things. 10:54.700 --> 10:58.533 align:left position:10% line:77% size:80% But, I mean, this banking part of it is just a wakeup call on the fragility of banking, 11:00.500 --> 11:01.633 align:left position:30% line:89% size:60% basically. 11:01.633 --> 11:03.466 align:left position:20% line:83% size:70% And the bank couldn't raise equity. 11:03.466 --> 11:05.000 align:left position:20% line:89% size:70% That was a huge flag. 11:05.000 --> 11:07.633 align:left position:10% line:83% size:80% That means that they were too deep in the hole by that time. 11:07.633 --> 11:12.600 align:left position:10% line:71% size:80% It was for the regulators and for the supervisors to know that that was really an accident waiting 11:14.066 --> 11:16.100 align:left position:30% line:89% size:60% to happen. 11:16.100 --> 11:17.700 align:left position:10% line:77% size:80% GEOFF BENNETT: Anat Admati and Simon Johnson, thank you both for your insights. 11:17.700 --> 11:18.700 align:left position:30% line:89% size:60% Appreciate it. 11:18.700 --> 11:18.833 align:left position:20% line:89% size:70% ANAT ADMATI: Thank you.