:00:00. > :00:10.This is Business Live from BBC News with Ben Thompson and Sally Bundock.
:00:11. > :00:21.The world's oldest bank needs to find over $5 billion
:00:22. > :00:28.to avoid the prospect of a government bailout.
:00:29. > :00:36.Live from London, that's our top story on Wednesday, 21st December.
:00:37. > :00:40.A bailout of Monte Pasci would see investors facing compulsory losses.
:00:41. > :00:44.It presents a tough choice for the new Italian Prime Minister.
:00:45. > :00:48.Also in the programme, a new twist in Malaysia's 1MDB scandal.
:00:49. > :00:53.We will have the latest from Singapore.
:00:54. > :00:58.And as economies grow, so too does demand for office space.
:00:59. > :01:03.We'll meet the man behind the firm that matches
:01:04. > :01:07.firms with work spaces - being dubbed Airbnb for offices.
:01:08. > :01:09.So we are asking where would you like to work
:01:10. > :01:19.A coffee shop or somewhere more scenic?
:01:20. > :01:33.Sally, where could be more exotic than here in the Business Live
:01:34. > :01:35.studio? The clock is ticking
:01:36. > :01:41.for the troubled lender Banco Monte The Italian bank is seeking over
:01:42. > :01:49.$5 billion in new investment Today is the final deadline
:01:50. > :01:53.for investors to buy new shares. The new Italian Prime Minister has
:01:54. > :01:55.sought Parliamentary approval for an emergency bailout package
:01:56. > :01:59.worth $20 billion if that investment money doesn't materialise
:02:00. > :02:02.from the private sector. That would be contentious
:02:03. > :02:04.because investors who already lent the bank money will be penalised
:02:05. > :02:10.under EU laws that came into force Poor quality loans are one
:02:11. > :02:14.of the biggest issues facing In total, the country's
:02:15. > :02:17.lenders are sitting on $370 That's about 40% of
:02:18. > :02:23.all the non-performing With me is Nicola Marinelli
:02:24. > :02:34.from the London Business School. He was a former trader for Italy's
:02:35. > :02:47.third largest lender, Is that right? That's right. Zbluf
:02:48. > :02:51.the inside track on this one. Today is very critical as Ben outlined. It
:02:52. > :02:54.is the chance for retail investors to get on board. Tomorrow, we are
:02:55. > :02:57.talking about institutional investors and hedge funds. Do you
:02:58. > :03:01.think they will come up with the funds they need?
:03:02. > :03:10.It doesn't look like it. Apparently the latest reports are that the bank
:03:11. > :03:17.is not actually getting the amount they are hoping for. They were
:03:18. > :03:21.hoping for 1.5 billion euros. But it looks like probably there won't be
:03:22. > :03:25.more than 800 million. If they don't get the 1.5 billion euro today from
:03:26. > :03:31.retail investors, does that give the wrong signal for tomorrow? Well, it
:03:32. > :03:35.certainly does especially because there are no anchor investors
:03:36. > :03:40.apparently for the new shares. There were some names floating around like
:03:41. > :03:44.the Qatari investment funds and probably some other hedge funds, but
:03:45. > :03:50.the latest news is that none of them is actually available. So probably
:03:51. > :03:54.everyone is basically thinking that there will be a state intervention.
:03:55. > :03:58.Now, talk us through how that will work. On the one hand it will break
:03:59. > :04:01.some EU laws and of course, it will be politically very difficult as
:04:02. > :04:11.well. So just talk us through that process. It is a difficult situation
:04:12. > :04:17.for the Government, but the banking recovery and directive that EU level
:04:18. > :04:24.allows for some other choices. For example, recapitalisation of the
:04:25. > :04:28.bank that is pre-emptive based on the fact that the bank, Monte dei
:04:29. > :04:33.Paschi, failed some stress tests. So this could be done with a mix of
:04:34. > :04:41.private money and public money. Bailing in, not all the creditors
:04:42. > :04:48.basically. So also the depositors above 100,000 euros threshold, but
:04:49. > :04:54.only the most junior creditors and the equity holders and so on. That's
:04:55. > :04:58.something that is more palatable for the Government. Just briefly, you've
:04:59. > :05:03.worked for this bank. Where has it gone wrong? Well, there have been
:05:04. > :05:13.several things going wrong. For example, initially the acquisition
:05:14. > :05:19.of a bank. It was part of ABM Am roe. It was done at the wrong price
:05:20. > :05:22.and there were scandals with trading, but they were not really
:05:23. > :05:26.big in terms of size. What is really bad now is that they have a huge
:05:27. > :05:32.amount of non performing loans because they have a big portfolio of
:05:33. > :05:36.loans in Italy and the Italian economy hasn't grown very much and
:05:37. > :05:40.after the crisis a lot of SMEs have been struggling and the portfolio,
:05:41. > :05:45.the one they want to sell now is around 30 billion euros and that
:05:46. > :05:51.really is a big... So a bit of a mountain to climb? Exactly. Thank
:05:52. > :05:54.you for your time and when we get news out of Italy today as to how
:05:55. > :05:58.that sale goes, we'll fill you in. US President Barack Obama has
:05:59. > :06:04.permanently banned new oil and gas drilling in US Atlantic and Arctic
:06:05. > :06:07.waters in one of his last major environmental protection actions
:06:08. > :06:09.before leaving office next month. Mr Obama invoked a provision
:06:10. > :06:12.of a 1953 law which will be difficult for president-elect
:06:13. > :06:18.Donald Trump to reverse. Volkswagen has struck a deal
:06:19. > :06:21.with the US authorities over some 80,000 VW,
:06:22. > :06:23.Audi and Porsche cars The agreement is another step
:06:24. > :06:35.towards allowing the German car-maker to put the emissions
:06:36. > :06:38.cheating scandal behind it. In June, VW agreed to a $15 billion
:06:39. > :06:40.settlement for another 475,000 The new agreement will cost
:06:41. > :06:44.Volkswagen an estimated $1 billion. A strike by airport baggage handlers
:06:45. > :06:47.and check-in staff in the UK planned for Friday and Christmas Eve has
:06:48. > :06:50.been called off. More than 1,500 members of the Unite
:06:51. > :06:53.union employed by Swissport had been due to walk out for 48 hours
:06:54. > :07:09.in a row over pay and conditions. There's been another
:07:10. > :07:24.twist in Malaysia's 1MDB Nice to see you. What's happening
:07:25. > :07:28.now? Well, Sally, as you mentioned 1MDB is Malaysia's state development
:07:29. > :07:31.fund which was set-up by the Prime Minister to supposedly help the
:07:32. > :07:36.country's development. But as we have been reporting, it has been
:07:37. > :07:43.investigated in a dozen countries including in the United States where
:07:44. > :07:46.it has been allegedly linked to a Hollywood movie, the Wolf of Wall
:07:47. > :07:52.Street. The authorities found several banks may have broken the
:07:53. > :07:57.law while doing business with 1MDB including Swiss bank, BSY which has
:07:58. > :08:02.already been kicked out of the country and former private investor
:08:03. > :08:08.banker for BSI who has been facing trial and he has been found guilty
:08:09. > :08:11.of tampering with key witnesses. So basically he was facing money
:08:12. > :08:17.laundering allegations and he has been found guilty that he urged his
:08:18. > :08:20.witnesses to destroy evidence, and he faces his sentence is tomorrow,
:08:21. > :08:24.but he also faces a separate trial in which he faces charges of money
:08:25. > :08:28.laundering which, of course, is a lot more serious next year.
:08:29. > :08:32.Thank you very much. I know you will stay across that story for us there
:08:33. > :08:36.in our Asia business hub. Back with them as soon as there is any
:08:37. > :08:42.developments there. This is what markets are looking
:08:43. > :08:45.like across Asia. It is brighter for the Japanese economy.
:08:46. > :08:47.The government upgraded its monthly economic assessment,
:08:48. > :08:50.a day after the Bank of Japan raised its view of the world's
:08:51. > :08:54.number three economy for the first time in over a year.
:08:55. > :09:01.In the US, the Dow within touching distance of the 20,000 level
:09:02. > :09:07.and Germany's DAX posted its highest levels this year.
:09:08. > :09:10.Now yesterday's move in the FTSE 100 to its highest levels
:09:11. > :09:12.since mid-October were primarily driven by a weak pound,
:09:13. > :09:15.a rebound in oil prices and a decent rally in the banking sector.
:09:16. > :09:19.We'll talk more on that in a moment, but first, Samira has the details
:09:20. > :09:28.about what's ahead on Wall Street Today.
:09:29. > :09:31.As we move closer to the holiday break, things are beginning
:09:32. > :09:38.But there are still a few bits happening that we need to note,
:09:39. > :09:41.including Micron Technology reporting earnings.
:09:42. > :09:44.Now investors are expecting the chip maker to report revenue growth
:09:45. > :09:48.for the first time in more than a year.
:09:49. > :09:50.The recent improvement in pricing for chips and flash memory chips
:09:51. > :09:53.is really expected to continue for the first half of 2017.
:09:54. > :09:57.Also reporting earnings Wednesday, consulting and outsourcing
:09:58. > :10:04.Now strong demand for its cloud services is expected to boost
:10:05. > :10:09.They have been investing heavily in digital services
:10:10. > :10:11.to gain market share, as it faces stiff competition
:10:12. > :10:13.from rivals like IBM, Infosys and Tata Consultancy
:10:14. > :10:22.Joining us is Simon Derrick, Chief Markets Strategist,
:10:23. > :10:32.Nice to see you, Simon. How are you? I'm very well. Full of the festive
:10:33. > :10:37.spirit? I'm always full of the festive spirit. What about the
:10:38. > :10:41.markets? I think they are full of the festive spirit given the that
:10:42. > :10:49.fact that we are approaching 20,000 on the Dow. 12 months ago, the
:10:50. > :10:52.Federal Reserve had hiked rates. Oil prices, everything going on. We have
:10:53. > :10:57.just had the Federal Reserve hike rates again and nobody cares! All we
:10:58. > :11:01.are talking about is politics and what Donald Trump is going to do. A
:11:02. > :11:05.huge shift this year in what the market focus is on and probably a
:11:06. > :11:09.good thing as well. We have stopped focussing purely on interest rates,
:11:10. > :11:13.politics and the spending partners of governments have become a big
:11:14. > :11:16.story, we are having to re-think everything about the way we look at
:11:17. > :11:19.markets. The joy, you know, investors are not looking really at
:11:20. > :11:23.interest rates and policy anymore, they are all looking at Trump, it
:11:24. > :11:28.makes a change that we don't have to look at them for a while either.
:11:29. > :11:34.That's been the story of the year, when rates would go up, if, when and
:11:35. > :11:38.by how much? That moved and it is about spending. He shifted the focus
:11:39. > :11:43.with regard to interest rates from what the Central Bank is going to
:11:44. > :11:47.do, but what is happening about the borrowing costs for governments? It
:11:48. > :11:51.will make for an interesting 2017 because first of all we have seen to
:11:52. > :11:54.what Mr Trump is going to do. I think that's going to be fascinating
:11:55. > :12:01.and I'm interested, given the fact that he's so keen to revitalise US
:12:02. > :12:05.industry, what he is going to do about a strong dollar, that could be
:12:06. > :12:08.a drag on some of the exporters. I think China, currency policy next
:12:09. > :12:13.year will be a big story and European politics. Oh, of course.
:12:14. > :12:18.That's the political risk of 2017, isn't it? That's where the shift
:12:19. > :12:22.will be for us next year. OK, Simon, you're not off the hook. You have
:12:23. > :12:25.got to come back in five minutes and share more of your thoughts and
:12:26. > :12:28.views on things. Yes, including sherry!
:12:29. > :12:32.Why demand for office space could give us a better
:12:33. > :12:35.We meet the firm that matches empty offices
:12:36. > :12:43.You're with Business Live from BBC News.
:12:44. > :12:48.People who buy drones could have to register it and take a test
:12:49. > :12:51.to prove they can fly it safely under new rules proposed
:12:52. > :13:04.Do you think you'd pass the test? Probably not!
:13:05. > :13:07.There were 59 near misses involving drones and airliners
:13:08. > :13:10.have been reported in the UK over the past 12 months.
:13:11. > :13:13.Our technology correspondent Rory Cellan-Jones has this report.
:13:14. > :13:15.Earlier this month, Amazon made its first delivery by drone.
:13:16. > :13:19.Just one potential use of an exciting new technology.
:13:20. > :13:25.But after a number of reports from pilots of near-misses
:13:26. > :13:31.with drones, there is mounting concern about safety.
:13:32. > :13:33.If people don't use drones responsibly and follow the rules
:13:34. > :13:36.and regulations that are in place, obviously, that is a safety issue,
:13:37. > :13:39.first of all, but could also affect the long-term future
:13:40. > :13:43.There are already plenty of regulations.
:13:44. > :13:45.For example, I cannot fly here because we are too close
:13:46. > :13:48.While professional users of drones have to register
:13:49. > :13:51.with the Civil Aviation Authority, anyone else can just buy
:13:52. > :13:55.The Government is consulting on regulations which would mean
:13:56. > :13:59.new drones would have to be registered, users would have to pass
:14:00. > :14:02.a theory test like that for drivers, and there would be tougher penalties
:14:03. > :14:14.Peter, an experienced drone owner, believes it is already too complex.
:14:15. > :14:19.If you put in too complicated rules, you will scare people off and deny
:14:20. > :14:22.the future industry this pool of talent that we need.
:14:23. > :14:26.There will be thousands of new drone owners this Christmas.
:14:27. > :14:29.Whenever new rules come in, they are being told they will be
:14:30. > :14:48.Can you fly a drone? Have you tried? No. Actually, I'd love, to try. My
:14:49. > :14:53.hand, eye co-ordination, it is forward, back, up, down. I have been
:14:54. > :14:57.in public parks where there has been one circling above us and it worried
:14:58. > :15:02.me to bits and there is some child miles away manning this thing and
:15:03. > :15:07.I'm thinking, "Don't get it get stuck on my head."
:15:08. > :15:14.A warning about borrowing for spending during Christmas, it is a
:15:15. > :15:17.worry, Citizen's Advice have a report out today.
:15:18. > :15:26.The clock is ticking for Italian lender Monte dei Paschi.
:15:27. > :15:28.The world's oldest bank needs to find over $5 billion
:15:29. > :15:31.in new investment, otherwise it faces the prospect of
:15:32. > :15:37.This could prove a contentious move by the new Italian Prime Minister,
:15:38. > :15:45.as EU laws would force investors to take compulsory losses.
:15:46. > :15:50.A lot at stake today. We will keep you up-to-date.
:15:51. > :15:52.How can you measure the health of an economy?
:15:53. > :15:55.Well, there are the official stats, of course, but they tell
:15:56. > :16:00.So it's said that looking at demand for office space can give
:16:01. > :16:04.When economies are growing, more people are in work,
:16:05. > :16:10.and that means demand for office space grows, and so does the rent.
:16:11. > :16:12.Commercial property space is worth a whopping 11
:16:13. > :16:18.The tech industry is one reason behind the growing
:16:19. > :16:19.demand for office space, accounting for 20%
:16:20. > :16:22.of all office leasing in the first half of the year.
:16:23. > :16:26.But in the UK, the number of people working from non-conventional office
:16:27. > :16:30.spaces has risen to its highest level since records began.
:16:31. > :16:34.Tech start-up Ofixu aims to take advantage of this.
:16:35. > :16:36.It is an online marketplace allowing hosts to list all types
:16:37. > :16:42.of workspaces for any type of work for as long as they need.
:16:43. > :16:45.And the founder and chief executive of Ofixu Dan Hinden
:16:46. > :17:03.Did I say it right? It is Ofixu. We have been struggling with Monte dei
:17:04. > :17:10.Paschi this morning! You love saying that!
:17:11. > :17:15.It rolls off the tongue! This is the latest in several tech
:17:16. > :17:22.start-ups that you have been involved in. You were involved with
:17:23. > :17:30.another company. We are doing really well, aren't we! That rivalled a B
:17:31. > :17:36.sometime ago. This latest offering is like that for office space, is
:17:37. > :17:46.that one way of describing it? Yes, I went to work for that company, a
:17:47. > :17:51.rival in Europe, and my learnings were that it is easy, and it should
:17:52. > :17:57.be, to attain and maintain listings or property hosts onto a platform
:17:58. > :18:02.where they can start earning income on otherwise under utilised space.
:18:03. > :18:09.Why would you not be able to do that? It brings you up to date with
:18:10. > :18:12.Ofixu today. We have looked at these start-ups, we call them disrupters,
:18:13. > :18:18.they are changing the way it has always been done. Office space is
:18:19. > :18:22.one of those but is ripe for change, because why take on a big overhead
:18:23. > :18:26.with a fixed contract for five or ten years when you don't know if you
:18:27. > :18:35.will need it, you might need more or less? There is a computer-based $16
:18:36. > :18:39.billion valuation, the co-working market is booming, but there is
:18:40. > :18:47.still a lot of underutilised space, 4.2 billion's 4.2 million visitors
:18:48. > :18:50.is that employed just the owner, so there is an document for freelance
:18:51. > :18:56.or contractor types, who would prefer not to work in a coffee shop,
:18:57. > :19:00.because it is not as conducive as a nearby spare desk. We engage with
:19:01. > :19:06.all of those types of spaces in all environments globally. How do you
:19:07. > :19:10.manage the bits that you don't know about, when you I tried to rent a
:19:11. > :19:16.bit of space for a period of time, what the neighbours like, how noisy
:19:17. > :19:21.it is next door? How slow the Wi-Fi is, how difficult various other
:19:22. > :19:28.matters are? Does that make sense? Of course. There is a plethora of
:19:29. > :19:34.listings on our platform, 85 cities, with different hosts. There are
:19:35. > :19:39.regulations for each office space, regulations for each office space,
:19:40. > :19:43.you may not be able to run -- bring your pet in, you may not be able to
:19:44. > :19:47.rent for under a month, but the host. You let that on their rules or
:19:48. > :19:54.regulations of. The host says what they want, but you get those who
:19:55. > :20:00.review it afterwards? Absolutely, the ratings and reviews side will
:20:01. > :20:09.drive the decision on the consumer side. Those who have rented space
:20:10. > :20:15.will rate and review those listings. I can see why this is great news for
:20:16. > :20:19.businesses. As far as landlords are concerned, I imagine they are less
:20:20. > :20:23.happy, because it brings the rent down, and they are only paid for
:20:24. > :20:31.when it is occupied? It comes up a lot. The landlord might say, we will
:20:32. > :20:35.sublease our space, if we do it to a company and they have seven desks
:20:36. > :20:42.but only three are being used, what good is that to me? Are you not
:20:43. > :20:46.paying a fixed overhead? You are, but if the landlord is flexible
:20:47. > :20:50.enough with the leasing contract, there is no reason why he can't go
:20:51. > :20:55.in with the tenant and say, we are happy for you to co-worker with
:20:56. > :21:04.another company, and we can split the income. There are plenty of land
:21:05. > :21:12.laws that are winning to do that. But there are so many areas we can
:21:13. > :21:20.push you with this. Dan, from Monte dei Paschi. -- from Ofixu.
:21:21. > :21:23.In a moment, we'll take a look through the business pages,
:21:24. > :21:27.but first here's a quick reminder of how to get in touch with us.
:21:28. > :21:34.You can stay ahead on our page, with the breaking business news. We will
:21:35. > :21:38.keep you up-to-date with the insight and analysis from our team of
:21:39. > :21:45.editors around the world. We want to hear from you. Get in touch on the
:21:46. > :21:53.BBC web page. We are on Twitter and Facebook. On TV and online, whenever
:21:54. > :21:56.you need to know. What other business
:21:57. > :21:57.stories has the media been Simon Derrick, chief markets
:21:58. > :22:11.strategist, Bank of New York Mellon, What is your office like? What would
:22:12. > :22:17.you like to see? A coffee machine in my office, those espressos when I
:22:18. > :22:25.need them. That is not happening any time soon! Dougal would like his bed
:22:26. > :22:32.in his office. I could have done without! Scott says, somewhere that
:22:33. > :22:36.is calm and inspirational, where you can see the sea. That is quite
:22:37. > :22:42.specific! We would like a window. It would be
:22:43. > :22:47.nice to have a real window. Let's look at this story, in the daily
:22:48. > :22:52.Mirror. This is one of our tabloid newspapers. ?1 per second, the
:22:53. > :23:02.numbers behind Carlos Tevez' proposed wages in China. That is
:23:03. > :23:09.quite phenomenal. It is. The statistics, he will earn more per
:23:10. > :23:16.week than Cristiano Ronaldo and Lionel Messi combined, or the same
:23:17. > :23:24.amount. They worked out that he could buy a brand-new Porsche 911
:23:25. > :23:29.everyday. I work in the City of London, even I think that this
:23:30. > :23:35.remarkable. Even you! Do they get this money back?
:23:36. > :23:41.Presumably they must they? In terms of sponsorship, sailor shirts, that
:23:42. > :23:47.kind of stuff, TV rights? Clearly, you have to sit there and think
:23:48. > :23:51.about how this works through. Until I read the story, I had not even
:23:52. > :23:55.heard of this team, so I am not sure how the sponsorship and everything
:23:56. > :24:02.else works. Football in Asia, Premier League football, is huge.
:24:03. > :24:11.The sponsorship for the British clubs, the support, absolutely
:24:12. > :24:17.amazing. ?1 a second, it is not bad going! I and whizzing through this
:24:18. > :24:22.and I am coming up with all thought. Let's look at Apple in the Indian
:24:23. > :24:31.press. Looking for manufacturing in India.
:24:32. > :24:35.Their slice of the smartphone pie. In many developed economies we talk
:24:36. > :24:39.about the two horse race between Apple and some song, you look at
:24:40. > :24:45.this graphic and you realise how many makers there are, and why Apple
:24:46. > :24:50.is such a small player in India. It makes the point that we tend to
:24:51. > :24:56.think of the high-end mobile phones, you are going to talk about far more
:24:57. > :25:01.user-friendly phones if you are going out to India, for example,
:25:02. > :25:07.when you are talking about that networks that cannot support a lot
:25:08. > :25:10.of the functions. They are talking about India overtaking the US in
:25:11. > :25:15.being the second largest market in the world for smartphones, so it
:25:16. > :25:21.makes sense for Apple, if it has stalling sales, to start trying to
:25:22. > :25:25.get into India. The save Santa's Sherry campaign has been launched by
:25:26. > :25:29.the Wine and spirit trade association, sales of sherry has
:25:30. > :25:34.more than halved in the last decade. I am glad we have got onto the
:25:35. > :25:41.serious issue! This has been the big story, and my specialist area. It is
:25:42. > :25:45.a key question. We leave whiskey. There are those revisionists that
:25:46. > :25:48.want to go down this route, but sherry is the traditional drink,
:25:49. > :25:54.along with a mince pie and a coward or the reindeer. Every year, and
:25:55. > :25:57.every year he drinks it. Amazing. The carrot goes as well.