16/04/2013 World Business Report


16/04/2013

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A those are the latest headlines. It is now time for the latest

:00:03.:00:13.
:00:13.:00:25.

The price of gold falls by 9%, the biggest one day drop into tears.

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And how much is too much? The European Parliament will vote on

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measures to curb bonuses in the banking business.

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Welcome. This is World Business Report. Also in the programme, they

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are among the world's biggest exporters. They are going head to

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head. South Korea unveils a stimulus programme in a bid to

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support its exporters, under pressure due to the weak Japanese

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yen. There has been a dramatic fall in

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the price of gold. It had a 9% drop, its biggest one day fall in more

:01:08.:01:17.

than 30 years. It left cold training at $131 per ounce. It is a

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pretty dramatic move. It has been on the decline since hitting a peak

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of around $1,800 per ounce last year. Last September it was at that

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level. It is reflecting a stronger outlook for the global economy,

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:01:45.:01:47.

particularly the US. The price has shifted downwards. Tell us more

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about this big shift yesterday. It was really a big shift, as you

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mentioned earlier. A drop of more than $141. In Asian trading it is

:02:00.:02:09.

falling by another 2% to $1,327 per ounce. Why is the yellow metal

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continuing to fall? Growing worries over slowing growth in China, which

:02:15.:02:21.

came out with a 7.7% expansion in the first quarter of this year. You

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also have the US economy, which continues to impact investor

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sentiment. You also have a slowdown in inflation, combined with

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sentiment that the central bank is considering winding down its

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stimulus programme. Prompting investors to unload. There are

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reports that Cyprus may sell some of its gold reserves to pay off its

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debts following its bailout. Before the massive drop, the other metal

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had climbed every year since 2001. Investors purchased it as

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protection against inflation and as a safe haven. I spoke to an analyst

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earlier, and he expects the price of gold to continue to fall from

:03:07.:03:17.
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current levels of $1,327. Other commodities are also falling.

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That is right. They are tracking the drop in gold prices. Other

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precious metals, such as silver, down by 12%. Palladium is dropping

:03:30.:03:40.
:03:40.:03:40.

by 8%. Analysts say there on the verge of entering a bear market.

:03:40.:03:50.
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20% lower from its high. Crude oil Asian trade. US crude is also

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falling to $86. Its weakest level since December of 2012. No sacred

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cows. All commodities are losing. Share markets are also falling

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today in Asia as well. We will look at the numbers later on. Time to

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look at the banking industry. Should it be able to pay its staff

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what it likes? Lawmakers will debate that question today and

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whether industry bonuses should be capped. Under new rules from 2014,

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bankers will not be able to get bonuses that exceeded their salary.

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But people in Britain are saying that it will be damaging to London

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and counter-productive. This man has worked in the City of

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London for over 15 years. A Harvard graduate and Goldman Sachs alumni,

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he is an A grade financier that cities have become used to

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attracting. In centre vised by a bonus that in its heyday meant

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rewards up to 13 times when salary. He is basic human psychology. You

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pay them a massive amount of cash. What are they going to do? Exactly

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what you incentive buys them to do. But no longer. Brussels hopes its

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new rules to limit bonuses will usher in a new age of moderation

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and risk aversion. Those inside the industry are sceptical. He is going

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to be bad news for London. It will lead to an imposition of higher

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fixed costs. Banks will be forced to put up higher base salaries. It

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is not as if compensation is going to go down. It is a global market.

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It will have an effect on how people are compensated. The City of

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London is Europe's largest financial centre. Thousands are

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employed and are getting used to live under the new rules passed by

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Brussels. What is unclear is how many of them will choose to stay

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here and how widely across the sector as a whole the new rules

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will reach. There will be further ways of this legislation that will

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affect other areas. Beyond that, what tends to happen in financial

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services sector day-to-day is reflected in other sectors in the

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future. While bonuses look set to leave the banks for a good, the

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implications is not even something the City's brightest can predict.

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Other business stories. South Korean businesses could be getting

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a boost. The government is planning a stimulus package worth more than

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cover a shortfall in tax revenue and help small and medium-sized

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firms. The South Korean economy will grow by 2.2% it is predicted

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this year. The shares and a Japanese bank

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plunged into to today. It is planning to buy a US phone company.

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bid from a US-based firm. They say that their bid is superior because

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it would allow synergy. Today the IMF, led by Christine

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Lagarde, will be bringing out its latest assessment of the state of

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the global economy. It is the starting point to a series of

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briefings that lead up to the IMF and Bank meetings that are this

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Christine stimulate growth in Europe's

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finding economies. -- flagging. In Washington, spring has arrived.

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But the mood on policy makers are tending International Monetary Fund

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and World Bank meetings is likely been slower to bloom in what the

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IMF describes as a three-speed recovery. Some emerging markets are

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doing well. Others, like the US, are on the mend. Europe and Japan

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are still in trouble. their economies but the Bank of

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Japan and other central banks have been described as the right step by

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the head of the IMF. A under the present circumstances, from our

:08:57.:09:02.

perspective it makes sense for monetary policy to do the heavy

:09:02.:09:08.

lifting in this recovery by remaining accommodating. A but she

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said that monetary policy alone was not the answer. Not enough had been

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done to repair the banking system. Monetary policy, which is inventive

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on the part of the ECB, is spending its wheels. Low interest rates,

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decided that European central bank level, are not affordable or

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conveyed to credit for the people, the enterprises that need it. The

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plumbing is clocked. The human cost of the weak recovery is reflected

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in the jobs market. Today, 200 million people were out of work

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around the world. The crisis has created a three-speed world in the

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eyes of the IMF. Its capacity as the global economic watchdog will

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require to tell its members about the danger of such uneven growth.

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It is quite interesting. Some of the stories that are likely to come

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out of that event in Washington at the end of the week, it is a World

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Bank meeting and also the G 20 gather. There is a lot of concern

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that Japan will be put into pressure to stop its measures that

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constantly weakening the yen. If we can get on to the Asian markets, we

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will. The yen has turned and against the dollar today. That is

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partly because of the events in Boston. It is seen as a bit of a

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safe haven. There has been a bit of strengthening on concern that Japan

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