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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. | :00:25. | :00:30. | |
And how much is too much? The European Parliament will vote on | :00:30. | :00:38. | |
measures to curb bonuses in the banking business. | :00:38. | :00:43. | |
Welcome. This is World Business Report. Also in the programme, they | :00:43. | :00:48. | |
are among the world's biggest exporters. They are going head to | :00:48. | :00:52. | |
head. South Korea unveils a stimulus programme in a bid to | :00:52. | :00:59. | |
support its exporters, under pressure due to the weak Japanese | :00:59. | :01:02. | |
yen. There has been a dramatic fall in | :01:02. | :01:08. | |
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 | :01:17. | :01:23. | |
pretty dramatic move. It has been on the decline since hitting a peak | :01:23. | :01:29. | |
of around $1,800 per ounce last year. Last September it was at that | :01:29. | :01:35. | |
level. It is reflecting a stronger outlook for the global economy, | :01:35. | :01:45. | |
:01:45. | :01:47. | ||
particularly the US. The price has shifted downwards. Tell us more | :01:47. | :01:54. | |
about this big shift yesterday. It was really a big shift, as you | :01:54. | :02:00. | |
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 | :02:09. | :02:15. | |
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 | :02:22. | :02:26. | |
also have the US economy, which continues to impact investor | :02:26. | :02:31. | |
sentiment. You also have a slowdown in inflation, combined with | :02:31. | :02:35. | |
sentiment that the central bank is considering winding down its | :02:35. | :02:40. | |
stimulus programme. Prompting investors to unload. There are | :02:40. | :02:44. | |
reports that Cyprus may sell some of its gold reserves to pay off its | :02:44. | :02:50. | |
debts following its bailout. Before the massive drop, the other metal | :02:50. | :02:56. | |
had climbed every year since 2001. Investors purchased it as | :02:56. | :03:03. | |
protection against inflation and as a safe haven. I spoke to an analyst | :03:03. | :03:07. | |
earlier, and he expects the price of gold to continue to fall from | :03:07. | :03:17. | |
:03:17. | :03:18. | ||
current levels of $1,327. Other commodities are also falling. | :03:18. | :03:24. | |
That is right. They are tracking the drop in gold prices. Other | :03:24. | :03:30. | |
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. | |
:03:50. | :03:53. | ||
20% lower from its high. Crude oil Asian trade. US crude is also | :03:53. | :04:00. | |
falling to $86. Its weakest level since December of 2012. No sacred | :04:00. | :04:08. | |
cows. All commodities are losing. Share markets are also falling | :04:08. | :04:14. | |
today in Asia as well. We will look at the numbers later on. Time to | :04:14. | :04:18. | |
look at the banking industry. Should it be able to pay its staff | :04:18. | :04:23. | |
what it likes? Lawmakers will debate that question today and | :04:23. | :04:29. | |
whether industry bonuses should be capped. Under new rules from 2014, | :04:29. | :04:35. | |
bankers will not be able to get bonuses that exceeded their salary. | :04:35. | :04:40. | |
But people in Britain are saying that it will be damaging to London | :04:40. | :04:47. | |
and counter-productive. This man has worked in the City of | :04:47. | :04:53. | |
London for over 15 years. A Harvard graduate and Goldman Sachs alumni, | :04:53. | :04:57. | |
he is an A grade financier that cities have become used to | :04:57. | :05:02. | |
attracting. In centre vised by a bonus that in its heyday meant | :05:02. | :05:11. | |
rewards up to 13 times when salary. He is basic human psychology. You | :05:11. | :05:18. | |
pay them a massive amount of cash. What are they going to do? Exactly | :05:18. | :05:26. | |
what you incentive buys them to do. But no longer. Brussels hopes its | :05:26. | :05:30. | |
new rules to limit bonuses will usher in a new age of moderation | :05:30. | :05:36. | |
and risk aversion. Those inside the industry are sceptical. He is going | :05:36. | :05:41. | |
to be bad news for London. It will lead to an imposition of higher | :05:42. | :05:48. | |
fixed costs. Banks will be forced to put up higher base salaries. It | :05:48. | :05:54. | |
is not as if compensation is going to go down. It is a global market. | :05:54. | :06:00. | |
It will have an effect on how people are compensated. The City of | :06:00. | :06:05. | |
London is Europe's largest financial centre. Thousands are | :06:05. | :06:09. | |
employed and are getting used to live under the new rules passed by | :06:09. | :06:14. | |
Brussels. What is unclear is how many of them will choose to stay | :06:14. | :06:18. | |
here and how widely across the sector as a whole the new rules | :06:18. | :06:24. | |
will reach. There will be further ways of this legislation that will | :06:24. | :06:31. | |
affect other areas. Beyond that, what tends to happen in financial | :06:31. | :06:36. | |
services sector day-to-day is reflected in other sectors in the | :06:36. | :06:46. | |
:06:46. | :06:48. | ||
future. While bonuses look set to leave the banks for a good, the | :06:48. | :06:55. | |
implications is not even something the City's brightest can predict. | :06:55. | :06:58. | |
Other business stories. South Korean businesses could be getting | :06:58. | :07:02. | |
a boost. The government is planning a stimulus package worth more than | :07:02. | :07:11. | |
cover a shortfall in tax revenue and help small and medium-sized | :07:11. | :07:19. | |
firms. The South Korean economy will grow by 2.2% it is predicted | :07:19. | :07:22. | |
this year. The shares and a Japanese bank | :07:22. | :07:27. | |
plunged into to today. It is planning to buy a US phone company. | :07:27. | :07:37. | |
:07:37. | :07:38. | ||
bid from a US-based firm. They say that their bid is superior because | :07:39. | :07:48. | |
:07:49. | :07:49. | ||
it would allow synergy. Today the IMF, led by Christine | :07:49. | :07:52. | |
Lagarde, will be bringing out its latest assessment of the state of | :07:52. | :07:58. | |
the global economy. It is the starting point to a series of | :07:58. | :08:02. | |
briefings that lead up to the IMF and Bank meetings that are this | :08:02. | :08:07. | |
Christine stimulate growth in Europe's | :08:07. | :08:17. | |
finding economies. -- flagging. In Washington, spring has arrived. | :08:17. | :08:20. | |
But the mood on policy makers are tending International Monetary Fund | :08:20. | :08:28. | |
and World Bank meetings is likely been slower to bloom in what the | :08:28. | :08:35. | |
IMF describes as a three-speed recovery. Some emerging markets are | :08:35. | :08:40. | |
doing well. Others, like the US, are on the mend. Europe and Japan | :08:40. | :08:45. | |
are still in trouble. their economies but the Bank of | :08:45. | :08:49. | |
Japan and other central banks have been described as the right step by | :08:49. | :08:57. | |
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 | :09:08. | :09:15. | |
said that monetary policy alone was not the answer. Not enough had been | :09:15. | :09:23. | |
done to repair the banking system. Monetary policy, which is inventive | :09:23. | :09:32. | |
on the part of the ECB, is spending its wheels. Low interest rates, | :09:33. | :09:39. | |
decided that European central bank level, are not affordable or | :09:39. | :09:44. | |
conveyed to credit for the people, the enterprises that need it. The | :09:44. | :09:50. | |
plumbing is clocked. The human cost of the weak recovery is reflected | :09:50. | :09:56. | |
in the jobs market. Today, 200 million people were out of work | :09:56. | :10:03. | |
around the world. The crisis has created a three-speed world in the | :10:03. | :10:11. | |
eyes of the IMF. Its capacity as the global economic watchdog will | :10:11. | :10:16. | |
require to tell its members about the danger of such uneven growth. | :10:16. | :10:20. | |
It is quite interesting. Some of the stories that are likely to come | :10:20. | :10:26. | |
out of that event in Washington at the end of the week, it is a World | :10:26. | :10:33. | |
Bank meeting and also the G 20 gather. There is a lot of concern | :10:33. | :10:36. | |
that Japan will be put into pressure to stop its measures that | :10:36. | :10:43. | |
constantly weakening the yen. If we can get on to the Asian markets, we | :10:43. | :10:51. | |
will. The yen has turned and against the dollar today. That is | :10:51. | :10:55. | |
partly because of the events in Boston. It is seen as a bit of a | :10:55. | :11:00. | |
safe haven. There has been a bit of strengthening on concern that Japan | :11:00. | :11:04. |