15/07/2014 Asia Business Report

Church of England Synod to ordain women as bishops, after decades of

disagreement and debate. The Archbishop of Canterbury, Justin

Welby, who had urged members to vote in favour, said he was absolutely

delighted by the result. Now on BBC News, all the latest business news,

live from Singapore. Citigroup agrees to pay a fine of $7

billion over risky mortgages. And, we take you to Shanghai to find out

why the group's leaders want to set up a new financial institution

there. Thank you for joining us. The 2008

global economic crisis did not just wreck entire economies, it destroyed

lives as well. Citigroup has now agreed to pay out billions of US

dollars to authorities to settle an investigation into the sale of

risky, sub`prime mortgages. They have announced they will pay out $7

billion. More than half will be doing to the department of justice,

while 2.5 billion will be paid in consumer relief or some of the

Americans who lost their homes. Our New York business reporter explains

what this means to the US bank. The bank has been forced to acknowledge

that they were missed it, that it actually mis` sold some sort of

mortgage related instruments during the financial crisis. As a result of

that, it has been forced to reach an agreement with US authorities and

pay a huge fine. This isn't the first time we have seen a big bank

being penalised for this sort of business. In fact, it is almost

becoming routine on Wall Street these days. We heard from the US

attorney general, who described the egregious behaviour. He has said in

the past that no bank is big enough to jail, and he warned there are

others who would also face potential fines in the future. This action is

the latest step in our ongoing activities to see who the fraud had

the US people. Citigroup is not the first financial institution to be

held accountable by this justice department, and it certainly will

not be the last. We have seen that JP Morgan is one big American format

has been forced to pay huge fines before. `` firm. The bank of America

is another bank that is currently being investigated. Citigroup has a

large presence Will this huge fine of about $7 billion have any impact

on its global operations? We are certainly talking about a global

bank with operations in Asia, Europe, all around the world. I

suspect the staff have been waiting to hear what the outcome will be.

What is interesting is that the chief executive of the firm has come

out with a statement, saying they believe the settlement is in the

best interests of shareholders, allowing them to move forward and

focus on the future not the past. Clearly the shareholders feel the

same, because the share price actually rose. There are two global

organisations charged with stabilising finances and funding

major projects in the developing world, the World Bank and the IMF.

The countries most affected by their policies have often felt shut out of

the decision`making process, because it is a large Western economies in

Japan that hold the pursestrings. These countries will now try to set

up an alternative, as thou `` how Shanghai reporter tells us.

This will widely be seen as it answer to the perceived unfairness

in existing developing countries. With the BRICS countries concerned

with the slowdown, the job of this bank will be to fund big

infrastructure projects. To be fair, you can't find many on the

streets of Shanghai who have heard of it BRICS summit, but it strikes a

chord with anyone you talk to. TRANSLATION: It is getting worse,

this delivery man tells me. There is so much more competition in business

nowadays. The economy is pretty bad compared to last year. People just

aren't spending is not. This BRICS summit is also expected to pledge

another large sum of money, up to 100 billion US dollars, to a kind of

alternative to the IMF. An emergency pot of money to protect emerging

countries from the volatility of international capital. It is a sign

of the growing clout and confidence of the BRICS members, and also the

need for such a fund underlines their vulnerability.

The World Trade Organisation has ruled against the US, saying it

broke regulations by imposing duties on Chinese steel products, solar

panels and other goods. It found that Washington went too far in its

response to alleged government subsidies to Chinese countries. Thus

that companies. There were claims that these occurred against three of

the major companies. The depreciating Chinese economy has

apparently caused a fall in the share price of Air China. It has

warned of a $180 million for the first half loss. Chinese

telecommunications equipment maker, Z T E, has cited improving margins

in its global business and revenues from new contracts to build the next

generation of telecommunications. They expect a profit of more than

$160 million. Standard Chartered has big gun proceedings against the head

of the commodities trading form, suspected of loans fraud. It is the

fourth company to start legal action to recoup losses since Chinese

authorities launched an investigation into whether a private

metals training company and its related companies used fake

warehouse receipts as collateral to secure loans. A British man and his

American wife will be facing the courts in China next month in

connection with bribery allegations involving the pharmaceutical giant

GlaxoSmithKline. It is part of a broader Chinese anticorruption

push, but it is China's attempt to end the process, and the

multinationals have anything to see if they follow the rules? The

process looks very politicised, because that is what it the

headlines, but you have to see that behind the political process is an

economic reform agenda that drives the process, and that will in the

end decide how this process will unfold. There will be continuing

headlines, as the leadership struggles out who retains power. In

the long run, there will be continuing reforms, and what the

Chinese call anticorruption is a regularisation of government

processes. How would you rate so far the anticorruption campaign of the

new government? I think what one has to see is that the anticorruption

campaign is China's way of phrasing things. Actually, it is part of the

government programme, and the person who was put in charge of the

anticorruption campaign was one of the economic leaders under the

previous leadership, who was brought in to push the anticorruption

campaign as part of a largely de regularisation and marketisation of

the ranking system and the state enterprise system. That is where it

is happening, because you have basic interest sitting there in the

leadership, who has control over state`owned enterprises who are

being pushed out in favour of a more regular and government controlled

process. It is a very tangled web of corruption that has to be untangled

at the moment. Had you think this will impact multinational companies

in China? They have anything to fear if they follow rules? No, in the

end, it will go in the interests of multinational companies, because

they are the ones who want regular process. What will happen in the

short term certainly is that companies who have a network of

contact in China might see that upset by people leaving and new

people coming in, but overall, the process is very much in line with

what will be national companies have been asking for.

Before we go, a quick look at the markets.

been asking for. Before we go, a quick Asian stocks

are currently in positive territory in mid`morning Asian trade. This

after US equity rose overnight, boosted by strong result from

Citigroup and more deals in the healthcare space. As for the Dow

Jones industrial average hit a record high, but they are waiting

and watching for the testimony by Janet Yellen later today on US

monetary policy. Thank you for investing your time

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