10/10/2012 World Business Report

the latest headlines from BBC World News. Now for the latest financial

news and World Business Report. The deal to merge BAE Systems with the

owners of Airbus is in trouble. The firms have to decide today whether

to go ahead. The giant US bank Wells Fargo is accused of reckless

behaviour during the housing boom. The ironman has released its report

on financial stability -- the IMF. Plans to create the world's biggest

aerospace and defence firm seem to be falling apart. Top executives at

EADS - the owner of Airbus and BAE - have been trying to negotiate a

merger. But the talks are close to collapse. BAE has been insisting

the French and German governments limit their ownership and control

of the new company. Shareholders are also unhappy as our Europe

Business Reporter. Reports. For a deal to create in the world's

largest F Company in aviation hangs in the balance. Will Germany except

new power-sharing arrangements? Arguments about protecting jobs and

national interest have been put by ministers from all the countries

involved. Political agreement is the only solution. Defence

Manufacturers' ten to be seen, even if the companies are privatised, as

national assets. The government and are loath to agreed to external

ownership. That is true of the French, German and indeed the US

government with which BAe systems have strong contacts. As a formal

bid acts as a sign of confidence the two sides believe a deal can be

done. Settling arguments over whether one-quarter will be an

about shareholdings will be difficult. The fact its largest

shareholder is so sceptical means they need to be convinced the deal

is worth doing. So apart investors are unimpressed. -- so far. They

can do a deal which brings synergy and benefits to shareholders was

not rationalising any manufacturing capability or indeed, operate as a

company free from political interference but which still has

significant state shareholdings of France and Germany. In other words,

squaring the circle which to my mind is impossible. They had

convinced themselves the future lies together, convincing investors

may take all the powers. The IMF has one risks to local stability

have risen, leaving confidence very fragile. In spite of efforts to

resolve the crisis, the newly released report says the reason

remains the biggest source of concern. Tell us more about this

report. One of the top lines coming out of the report is that European

banks will have to sell trillions of dollars worth of assets over the

coming months. The problem is that if the European situation gets

worse, they could be forced to sell as much as 4.5 trillion dollars

worth of assets. That is an 18% increase in the forecast the IMF

made just six months ago. A sign that confidence his really becoming

a problem. The lack of confidence. That lack of confidence is aiming

in impact on what people are doing on financial markets. Just to go

back to what we were talking about with banks having to sell of vast -

- assets. It is to do with funding difficulties. That causes problems

for the broader economy because it means ordinary people will find it

harder to get credit. As we know, that will have a knock-on effect on

growth. The IMF cut its forecast for global growth. One of the

problems it is an issue of complacency. I spoke to the author

of the report and we talked about what he sees as the flight to safe

havens where investors put money when they think will be safe and we

have an environment where the Monetary System, central bankers,

and doing more follow rates to help stimulate the economy. That can

lead to complacency. Up the combination of these - for example

in the US - which have been necessary, but they may lead to a

sense of complacency on the part of the political actors in that

they've may not take action to put the public finances in order as

speedily as it is needed. Let's be careful not to fall into a false

sense of security. The world leaders and gathering here - the

message is Clear. Whether you are talking with the United States,

Europe or Japan. Policy leaders must act now. The US government is

suing the bank Wells Fargo for what it describes as reckless behaviour

during the housing boom. The lawsuit says that a government

agency had to pay out hundreds of millions of dollars in insurance

because Wells Fargo did not approve and track mortgages properly. Wells

Fargo denies the allegations. It is the biggest bank in the US and a

well regarded lending institution but that reputation has taken a hit.

In a lawsuit filed in New York, the government alleges that between

2001 and a 2005, Wells Fargo certified mortgages that did not

meet the requirements needed by the government insurance programme.

When those loans eventually went into default, the agency overseeing

mortgage lending had to pay hundreds of millions of dollars.

When they be paid out, they're coming back and saying we should

never have had those lines in the first place. Probably true but it

is ubiquitous and we have event Wells Fargo doing this it points to

how we got here in the first place. Wells Fargo is the country's

largest servicer of mortgages and it is the latest bank to have

lawsuits filed against it. The New York Attorney General sued and JP

Morgan Chase. Wells Fargo denies any wrongdoing, saying it acted as

a prudent and responsible lender but these allegations from come as

his country's be as banks are due to report their third-quarter

earnings and analysts still expect a positive earning result from

Wells Fargo up but they do not do much for the bank's reputation. The

world's biggest shipping container company, Maersk Line has stopped

shipping to Iran. Sanctions have made it impossible to conduct

business in the nation, they say. Iran's currency has lost about a

third of its value over the pass way. A quarter loss and due to

falling aluminium sales for Alcoa. In part that is due to weak demand

from the construction industry. In Brazil, the central banks are

expected to cut interest rates. It currently stands at 4.5% after nine

consecutive cuts. The economy is lot sluggish. Markets are

struggling today - the news from a colour did not help. The lack of