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