07/01/2013 World Business Report

to write a new constitution. Those are the latest headlines.

Now it is time for World Business Report.

The headlines: Global regulators had given banks four more years and

greater flexibility to build up cash office in an attempt to make

them less vulnerable towards future financial shocks.

The death of the Megastore. Virgin France is expected to declare

itself insolvent today, putting 1,000 store workers' jobs at risk.

Google's chairman is set to visit North Korea. He is reportedly

interested in the reclusive country's economic issues and its

use of social media. For the first time, the world's

most powerful economies have reached agreement on rules that

will force banks to hold minimum quantities of cash and assets that

can be sold in an emergency. In 2015, it will be phased in, and it

will take full effect four years later. The agreement by the body

that oversees the basil Commission on Banking Commission is to prevent

financial shocks. To talk us through how they work, and what is

at stake, I am joined by European economist.

Tell us about the roles. What have they actually agree it?

Across a whole range of Spectrum's, including capital, trying to limit

the ability for banks to have the same kind of crisis as before. The

agreement covers one part of that regime, the idea is that banks will

be forced to hold sufficient reserves to be able to survive 30

days in the event of a funding crisis. They have got 30 days to

survive on their own. The issue, what the banks have been arguing

about, as what can count as the reserves. They have to be very high

quality, liquid assets that you can sell in a hurry. What has been

agreed last night is two things. They have broadened out the

category of assets that count as reserves. They will be able to use

equities, which is new, and more significantly, they have been given

a longer time to get to the point where they can meet the targets.

That was stretched to an additional four years, on top of the previous

stated date of 2015. This is quite a watered down dale, better for the

banks. It is a pragmatic deal. The reality is that to a certain extent,

a lot of what has been happening smacks of after the horse has

bolted. We are in an environment of banks, far from being in a position

to cause the next financial crisis by excessive lending, the problems

are potentially on the other side. We have to give them a chance to

heal, sort out the funding, and get sufficient liquidity. It is

interesting you should say that. In some cases, banks are holding more

in terms of reserves, and these rules state that they need to. They

have gone the extra mile or ready. Many argued that the situation

means there are economies that are not growing as fast, because banks

are not lending. They are being a bit too cautious. That is the

concern. In many ways, the market is providing the discipline rather

than the regulators. You have to demonstrate that you have got

sufficient access as a bank. If you do not, you struggle in the market

place to maintain the assurance of bonds. The market is imposing its

own discipline. We had been through an environment that is finally

beginning to ease, but in the last two years, banks have really

struggle to maintain access to wholesale markets, and that has

constrained of their business. feel that this agreement reached

last night draws a line under the crisis that we have had in terms of

where banks are at and the future for them, in a position where we

had to bail them out again? This is part of the framework. It is going

to be put in place. The proof will be in the eating in the years to

come. It will still be beholden on the regulators to make sure that we

do not that the assets grow as rapidly as we saw in the past.

The company that owns the Virgin Megastore chain in France is

expected to declare beat business insolvent. It is no longer

affiliated with Richard Branson's Virgin Group. It has 25 stores in

France that are in danger of closure. It is not difficult to

guess the reason, falling music and DVD sales.

Just over a week ago, Virgin employees went Arc -- went out on

strike in a final attempt to keep the stores open, but unless a

surprise by air steps in, the stores are likely to close.

TRANSLATION: This is very sad. This is not nothing. It is a symbol and

a symbol that may disappear. It is a nice store. What will happen to

us? What are we going to do. Virgin's main rival has had

similar difficulties. It has a relay of 500 staff and sold its

shops in Italy. In the UK, 8 Mb it warned of 12 critical days over

Christmas if it was to survive. One major survey says that sales of

physical CDs and DVDs fell by more than 17%. Shoppers chose to

download tracks and films from the internet. It is even harder for

music shops to make money when rents are high, as in the centre of

Paris. TRANSLATION: I think we were victims this Best -- several of

speculations. The real-estate speculation, but this is for the

entire chain, so it also concerns stores and all city centres. In the

last four years, they had amassed debts of 22 million euros, sure

enough to put off any potential buyer. Among those now rumoured to

be interested, Apple, or Marks & Spencer.

Google's executive chairman is making a surprise visit to North

Korea. This is a very intriguing trip.

Tell us more. He has not issued a statement about what he plans to do

in North Korea. We did contact Google's office in Singapore but

they gave no comment. We only know that he is currently in Beijing and

is scheduled to leave for North Korea, which is considered to have

the world's most restrictive internet policies. A part of his

delegation led by a former New Mexico governor, it is the first

trip by an executive from the Californian based internet search

provider to North Korea. He said that Eric Schmidt is going as a

private citizen. This is not a Google trip. He is interested in

North Korea's economic issues and its use of social media. The former

governor also said the delegation plans to inquire about a career in

American US citizen who is detained over there. The whole trip comes

despite public resistance from the US State Department, which has said

that the visit was ill-timed in light attention stemming from North

Korea's recent rocket launch. -- in light of tension.

Music company Sony and BMG teamed up to make a joint bid for

Parlophone and other EMI labels now owned by Universal Music. Universal

is owned by France's and the Vendee, and it brought EMI, and regulators

forced it to sell off two-thirds of the company to save competition. If

the bid is successful, they were there split the assets.

-- will split. Samsung an allergy were fined in

China for fixing the prices of LCD screens. -- and algae. They were