19/06/2013 World Business Report


19/06/2013

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from the US. Those are the latest headlines.

:00:02.:00:12.
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Time now for the money News In British bankers could be sent to

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jail for misconduct, so says a long-awaited report commissioned by

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the Government. Markets on the edge as the US

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central bank meets. When will it start to pull back on its multi-

:00:35.:00:45.
:00:45.:00:53.

Also in the programme: The first in our new series on the new middle

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classes. Today we focus on China. First of all, a long-awaited report

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on the failings of Britain's banks has been published by the

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parliamentary commission on banking standards. It was set up by the

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British Chancellor last year after the scandal over attempts to rig

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the interbank lending rate. Among the recommendations is a call for

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senior banking figures to be sent to jail if they are found guilty of

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recklessness conduct. Our Personal Finance Correspondent has been

:01:23.:01:28.

reading the report. The attempted reading of the key

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market interest rates at Barclays and other banks caused outrage last

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summer. The UK goth Exeter-based special commission to investigate

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how the culture and standards could lead to such an issue. The report

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so as to deter a senior bankers from doing anything wrong, the

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bonuses should be deferred for up to ten years, bonuses should be

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capped that could be cancelled if a bank needed to be rescued in a

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bail-out by the state, and there should be an offence of reckless

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misconduct by senior bankers punishable with a prison sentence.

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I expect it is a power that would really be used. It is a nuclear

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deterrent, but it is there. It is a tool that could be used and which

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we intend should alter behaviour will prior to getting to that point.

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The report seeks to keep top bankers under control by putting

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their bonuses out of reach for years and by threatening them with

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more painful sanctions if they behave badly. It is not just the

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bank is to get a going-over. More stringent regulation is called for

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and more surgery on the banking industry. In particular, RBS. Is

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more than 80% owned by the British taxpayer after it had to be bailed

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out. It is to be split into a bad bank which holds of the problem

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debts and a good bank which could lend freely and could be worth more

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when it is sold off to the public sector. The commission is calling

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for a Government report on them dishes and -- decision by September.

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The American economy is showing signs that things are getting

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better. Housing is rebounding and the job market is getting stronger.

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Given the improvements, investors want to know when the US Federal

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Reserve, led by Ben Ben a key, will begin to scale back its efforts to

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This is new territory for the Federal Reserve, buying assets and

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supporting the US economy. Until unemployment hits the sweet 6.5%,

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the Federal Reserve has said it will not and it's easy money

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policies. Just a few weeks ago, the chairman said this. If we see

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continued improvement and we have confirmed that it that is going to

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be sustained, then we could take a step down in our pace of purchases.

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Again, if we do that, it would not mean that we are automatically

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aiming towards a complete wind down. We would be looking beyond that to

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see how the economy of wolves and we could either raise or lower

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carapace of purchases. The mere suggestion it made by Les bons said

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markets into a frenzy. -- it may buy less bonds. We have had some

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violent reactions in the market over the past couple of weeks.

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Triple digit swings have been commonplace in the last two weeks.

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What we are looking for is some sort of stability to come after

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this announcement is made. The hope is that clarity will, at the end of

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the two-day meeting. Everyone will be listening for clues to when and

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how it will ease its way out of the stimulus. It has been unsuccessful

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late Lee getting its message across. The Federal Reserve wants to

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communicate that it will continue to run very accommodative,

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supported monetary policy and that it will be very cautious and

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withdrawing that easy policy because of the fragility of the

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recovery. Another question needing clarity, is the German leaving when

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his term ends in January? -- chairman. Recently President Obama

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gave us a clue, saying he is has already stayed longer than he

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wanted to. It seems the man who orchestrated the stimulus will not

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be the one to get the American economy off of it.

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Japan's exports to the US and China soared in the month of May. That is

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thanks to the weaker yen. Because the unions are weak, import costs

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Put this in perspective for us. guess we are starting to see the

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impact of what is known as a economics, the economic policies of

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the Prime Minister, which helped weaken the Japanese currency. It

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has strengthened somewhat in the last few weeks, but it is still

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much weaker compared to -- and head to six months ago. That helps to

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boost exports because it makes Japanese products cheaper overseas

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and it also boosts their overseas revenues when they are converted

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back into the Japanese currency. As a result, export rising more than

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10% in the world of May from last year, which is the biggest rise

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since the 2010. Import costs are also rising and Japan Kwok another

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:06:56.:06:56.

larger trade deficit. -- clocked. If looking around the troubled

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global economy today it is hard to see many bright spots from which a

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future of recovery might be based, except perhaps one.

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Some economic analysts have been championing the arrival of a knight

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in shining armour, or at least comfortable shoes, a bit of

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knitwear perhaps. We are talking about the Chinese middle class and

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to kick off assets and looking at the emerging middle class around

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the world, our correspondent in China went in search of the new

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consumers in the new cities there. That the Chinese masses are

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deserting the countryside in search of work and a better life is an old

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story. But now there is a new chapter. The farmers leaving these

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fields for cities like this one are becoming not just workers, but

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consumers as well. In short, they are off to join the middle class.

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This woman earns a little more than $12,000 at every year and she

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spends every last bit of it, often with the help of her credit card.

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TRANSLATION: My parents would never spend money. Attitudes are changing

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fast. China needs this to happen so that its new cities can become the

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building blocks of economic growth. His family live on $40,000 a year.

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There is the child, the mother and the father. They live in a nice

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apartment now a typical of millions of Chinese families. TRANSLATION:

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Yes, I do feel middle class. It is right that the week get left behind

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and the stronger survive. China's expanding middle class means big

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opportunities for the global economy as well. In the past few

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years more than a dozen wine bars have sprung up across the city.

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Foreign carmakers are cashing in. Jessica and her husband currently

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spend half of their monthly income on repayments for this. This new

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amusement park is a sign of the booming leisure industry. And in a

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little more than $30 per ticket it is a decidedly middle class

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experience. There are fears that this economy could falter before

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the fledgling consumer society really takes off, but if the music

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doesn't stop, China's middle class just might keep on spending

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And you can find out more on our series online. See how to show us

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what being middle class means to you when you are. Get in touch.

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Let's show you how the markets are Let's show you how the markets are

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trading ahead of the closure of that today meeting of the US

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Federal Reserve. As you can see, we have a very mixed picture, with

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Japan higher. The Japanese yen is trading much weaker today against

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the dollar and many other currencies around the world as well.

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