:00:12. > :00:20.Citigroup agrees to pay a fine of $7 billion over risky mortgages.
:00:21. > :00:23.And we take you to Shanghai to find out why the group's leaders want to
:00:24. > :00:33.set up a new financial institution there.
:00:34. > :00:38.`` BRICS leaders. Thank you for joining us. I'm Rico Hizon. The 2008
:00:39. > :00:42.global economic crisis didn't just wreck entire economies, it destroyed
:00:43. > :00:45.lives as well. Citigroup has now agreed to pay out billions of US
:00:46. > :00:53.dollars to authorities to settle an investigation into the sale of
:00:54. > :00:56.risky, sub`prime mortgages. Citigroup has announced they will
:00:57. > :01:00.pay out $7 billion. More than half will be going to the Department of
:01:01. > :01:03.Justice, while $2.5 billion will be paid in consumer relief, for some of
:01:04. > :01:06.the Americans who lost their homes. Our New York business reporter
:01:07. > :01:19.explains what this means to the US bank. The bank has been forced to
:01:20. > :01:25.acknowledge that there were misdeeds. It actually mis`sold some
:01:26. > :01:28.sort of mortgage related instruments during the financial crisis. As a
:01:29. > :01:31.result of that, it has been forced to reach an agreement with US
:01:32. > :01:34.authorities and pay a huge fine. This isn't the first time we have
:01:35. > :01:38.seen a big bank being penalised for this sort of business. In fact, it
:01:39. > :01:43.is almost becoming routine on Wall Street these days. We heard from the
:01:44. > :01:51.US attorney general, who described the egregious behaviour. He has said
:01:52. > :01:55.in the past that no bank is too big to jail, and he warned there are
:01:56. > :02:09.others who would also face potential fines in the future. This action is
:02:10. > :02:11.the latest step in our ongoing activities to see who defrauded the
:02:12. > :02:14.American people and damaged markets. Citigroup is not the first financial
:02:15. > :02:17.institution to be held accountable by this justice department, and it
:02:18. > :02:21.certainly will not be the last. JP Morgan is one big American firms
:02:22. > :02:24.that's been forced to pay huge fines before. The Bank of America is
:02:25. > :02:34.another bank that is currently being investigated. Citigroup has a large
:02:35. > :02:41.presence. Will this huge fine of about $7 billion have any impact on
:02:42. > :02:43.its global operations? We are certainly talking about a global
:02:44. > :02:49.bank with operations in Asia, Europe, all around the world. I
:02:50. > :02:56.suspect the staff have been waiting to hear what the outcome will be.
:02:57. > :03:00.What is interesting is that the chief executive of the firm has come
:03:01. > :03:02.out with a statement, saying they believe the settlement is in the
:03:03. > :03:05.best interests of shareholders, allowing them to move forward and
:03:06. > :03:08.focus on the future not the past. Clearly the shareholders feel the
:03:09. > :03:18.same, because the share price actually rose.
:03:19. > :03:30.For more on that and all business news, go to the BBC News website.
:03:31. > :03:34.There are two global organisations tasked with stabilising finances and
:03:35. > :03:41.funding major projects in the developing world, the World Bank and
:03:42. > :03:44.the IMF. But the countries most affected by their policies have
:03:45. > :03:49.often felt shut out of the decision`making process. That's
:03:50. > :04:00.because it's the large Western economies and Japan that holds the
:04:01. > :04:04.pursestrings. A BRICS meeting will try to set up an alternative, as our
:04:05. > :04:08.Shanghai reporter tells us. Rumour has it Shanghai has been
:04:09. > :04:12.chosen to host the headquarters of the new BRICS development bank,
:04:13. > :04:16.widely seen as the developing world's on set the perceived
:04:17. > :04:25.unfairness of the existing global financial institutions. With the
:04:26. > :04:33.BRICS economy sailing in choppy waters, with a concern about a
:04:34. > :04:43.slowdown, the bank's job will be to find big infrastructure projects and
:04:44. > :04:46.keep the economy is going. To be fair, you can't find many on the
:04:47. > :04:49.streets of Shanghai who have heard of it BRICS summit, but its key
:04:50. > :04:52.focus, concern about growth, strikes a chord with anyone you talk to.
:04:53. > :04:57.It's getting worse, this delivery man tells me. There is so much more
:04:58. > :05:01.competition in business nowadays. TRANSLATION: The economy is pretty
:05:02. > :05:06.bad compared to last year. People just aren't spending is not. `` as
:05:07. > :05:10.much. This BRICS summit is also expected to pledge another large sum
:05:11. > :05:16.of money, up to 100 billion US dollars to a kind of alternative to
:05:17. > :05:18.the IMF. An emergency pot of money to protect emerging countries from
:05:19. > :05:29.the volatility of international capital. It is, on the one hand, a
:05:30. > :05:33.sign of the growing cloud and confidence of the BRICS members, but
:05:34. > :05:37.on the other the need for such a fund underlines their vulnerability.
:05:38. > :05:40.The World Trade Organisation has ruled against the US, saying it
:05:41. > :05:44.broke regulations by imposing duties on Chinese steel products, solar
:05:45. > :05:47.panels and other goods. It found that Washington went too far in its
:05:48. > :06:05.response to alleged government subsidies to Chinese countries. In a
:06:06. > :06:08.similar case, another panel ruled in support of claims by India in
:06:09. > :06:11.support of tarrifs from steel exports of three of its major
:06:12. > :06:19.carriers. Air Asia says its first half`year earnings have fallen, and
:06:20. > :06:24.they put that down to the depreciating Chinese economy.
:06:25. > :06:28.Air China has warned of a $180 million for the first half yearly
:06:29. > :06:31.loss. They say that stupid the weaker currency.
:06:32. > :06:34.Chinese telecommunications equipment maker ZTE has cited improving
:06:35. > :06:36.margins in its global business and revenues from new contracts to build
:06:37. > :06:51.the next generation of telecommunications. They expect ``
:06:52. > :06:55.expect first half net profit of more than $160 million.
:06:56. > :06:57.Standard Chartered has begun proceedings against the head of the
:06:58. > :07:03.commodities trading form, suspected of loans fraud. The bank is the
:07:04. > :07:05.fourth company to start legal action to recoup losses since Chinese
:07:06. > :07:07.authorities launched an investigation into whether a private
:07:08. > :07:10.metals training company and its related companies used fake
:07:11. > :07:22.warehouse receipts as collateral to secure loans. `` trading company.
:07:23. > :07:25.A British man and his American wife will be facing the courts in China
:07:26. > :07:26.next month in connection with bribery allegations involving the
:07:27. > :07:40.pharmaceutical giant GlaxoSmithKline. It's part of a
:07:41. > :07:43.broader Chinese anticorruption push. But it's China's attempt to end the
:07:44. > :07:49.process, and do the multinationals have anything to see if they follow
:07:50. > :07:52.the rules? The process looks very politicised,
:07:53. > :07:55.because that is what it the headlines, but you have to see that
:07:56. > :07:58.behind the political process is an economic reform agenda that drives
:07:59. > :08:03.the process, and that will in the end decide how this process will
:08:04. > :08:09.unfold. There will be continuing headlines, as the leadership
:08:10. > :08:14.struggles out who retains power. In the long run, there will be
:08:15. > :08:16.continuing reforms. What the Chinese call anticorruption is a
:08:17. > :08:25.regularisation of government processes. How would you rate, so
:08:26. > :08:33.far, the anticorruption campaign of the new government? I think what one
:08:34. > :08:38.has to see is that the anticorruption campaign is China's
:08:39. > :08:45.way of phrasing things. Actually, it is part of the government programme.
:08:46. > :08:47.The person who was put in charge of the anticorruption campaign was one
:08:48. > :08:50.of the economic leaders under the previous leadership, who was brought
:08:51. > :08:53.in to push the anticorruption campaign as part of a largely de
:08:54. > :08:59.regularisation and marketisation of the ranking system and the state
:09:00. > :09:14.enterprise system. `` banking system. That is where the fights are
:09:15. > :09:16.happening, because you have basic interest sitting there in the
:09:17. > :09:19.leadership, which still controls state`owned enterprises, who are
:09:20. > :09:22.being pushed out in favour of a more regular and government controlled
:09:23. > :09:25.process. It's a very entangled web of corruption that has to be
:09:26. > :09:28.untangled at the moment. How do you think this will impact multinational
:09:29. > :09:31.companies in China? Do they have anything to fear if they follow
:09:32. > :09:34.rules? No, in the end, it will go in the interests of multinational
:09:35. > :09:45.companies, because they are the ones who want regular process. What will
:09:46. > :09:49.happen in the short term certainly is that companies who have a network
:09:50. > :09:52.of contacts in China might see that upset by people leaving and new
:09:53. > :09:55.people coming in, but overall, the process is very much in line with
:09:56. > :10:02.what will be national companies have. `` have been asking for.
:10:03. > :10:07.Before we go, a quick look at the markets. Asia is rising in
:10:08. > :10:09.mid`morning trade after US equities rose overnight, lifted by strong
:10:10. > :10:14.results from Citigroup and more results from Citigroup and more
:10:15. > :10:17.deals in the healthcare to the Dow Jones industrial average hit a
:10:18. > :10:20.record high but investors are waiting for the congressional
:10:21. > :10:25.testimony by Janet Yellen on US market policy. Thank you for
:10:26. > :10:32.investing your time with us. Sport Today is up next.
:10:33. > :10:37.This is BBC News. The headlines: The United States has welcomed an
:10:38. > :10:41.Egyptian call for a ceasefire in Gaza. Israel and the militant
:10:42. > :10:45.Palestinian group Hamas say they are considering the proposals.
:10:46. > :10:48.The Libyan government has said it may ask for international help to
:10:49. > :10:51.end fighting between rival militia groups after a new attack at Tripoli
:10:52. > :10:55.airport. The Church of England has voted to
:10:56. > :10:56.allow women to become bishops for the first