Topic: Basel Iii

Bloomberg reports that international banking standards (Basel III) have been softened, representing a victory for big banks dealing in the $300 trillion derivatives market. Simultaneously, Frankfurt has established itself as a major trading hub for the Chinese Renminbi (RMB). The hosts discuss the ongoing shift away from the US dollar as the sole global reserve currency and the rise of Chinese financial influence in Europe.

Dvorak discusses Michael Lewis's new book, "Flash Boys," with a banker friend in Austin. The banker claims the book's focus on fiber-optic speed is "bullshit" and that the real money in high-frequency trading is made by identifying small-cap stocks that will naturally follow the movement of large-cap leaders like Unilever. He also predicts American banks will double in size despite "too big to fail" concerns.