19/01/2017 BBC Business Live


19/01/2017

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This is Business Live from BBC News with Sally Bundock

:00:00.:00:00.

fears grow as some leading firms warn thousands of staff may now be

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biggest banks tells the BBC London will remain

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Live from London, that's our top story on Thursday

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Brexit by Theresa may lead to london losing it's financial crown jewels?

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The boss of Barclays tells us what he thinks.

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Also in the programme, some breathing space for now, no arrest

:00:57.:01:07.

warrant for the Samsung boss Jay Y Lee. Prosecutors vowed to continue

:01:08.:01:12.

the corruption investigation without wavering. We will have the latest

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from Seoul. And for now European markets

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are all headed higher - Theresa May is speaking in Davos

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in less than an hour and so we are watching

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the pound sterling. We are also going to be getting the

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inside track on the winners and losers. Also, streaming service net

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flicks reported a huge boost in subscriber numbers, they put it down

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to their original conflict, it is a little bit like Netflix and

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chilling. Do the streaming services make your much watch shows? Do get

:01:52.:01:57.

in touch, use the hashtag. Do get in touch with your comments,

:01:58.:02:08.

not just about Netflix but about our other stories. We love to hear from

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you. We start here in London -

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where fears of a costly Brexit Some leading firms are now

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weighing up moving thousands of staff out of the UK -

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after Prime Minister Theresa May confirmed plans to leave

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the European Single Market as well as the EU -

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the so called 'hard Brexit' option. The British Leader is addressing

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the world economic forum in Davos in the next hour -

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she will also be meeting the bosses of some of the big banks including

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Goldman Sachs and JP Morgan On Wednesday the boss of HSBC said

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he's preparing to move around 1000 That would mean around 20%

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of its European revenue leaving the UK, worth

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several billion dollars. Swiss rival UBS also told the BBC

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that 1000 jobs may go in London as a result of Brexit,

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again around a fifth And according to a report

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in the German newspaper Goldman Sachs may halve

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its London workforce, moving 3000 staff to New York

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and continental Europe, But when pressed on the matter by

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another news agency, Goldman Sachs said it has yet to make a firm

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decision. Our business editor Simon Jack

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is in Davos where he's been speaking to the Chief executive of Barclays,

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Jes Staley. Jes Staley has been singing the

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praises of Londoners, but I wonder if that comes as any surprise? All

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banks have been looking at contingency plans, and as you said,

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HSBC have triggered theirs, they said we always said we would move a

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thousand people if we were to leave the single market, and that is

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exactly what we are going to do. But a lot better news for Theresa May

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from the boss of Barclays. He told us what he thought about the future

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of London as a financial centre. As I said before, I don't believe that

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financial centre will leave the city of. I think the UK will continue to

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be the financial longs for Europe. We may have to move certain

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activities, we may have to change the legal structure that we use to

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operate in Europe, but I think it is going to be at the margin, and will

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be manageable. You have a banking licence in Dublin and a big business

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in the US. Is it a sensible conclusion to make that some of

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those activities might go either to New York or Dublin? We have a bank

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subsidiary in Ireland, which is part of the EU, and the largest credit

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card operation in Germany, so we have quite a presence in Germany,

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and we have an office in France. We are the largest underwriter of

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European sovereign debt, so when European Union countries issue their

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own debt, the largest bank underwriter in the world is

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Barclays, so they will want us to staying gauged, we will want to stay

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gauge. Whether we will have to root some activities through Ireland do

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something in Germany, those are the we are looking at. But the bulk of

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what we do will continue to occur in London, in my view. Having been

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pariahs in many areas, bankers, do you find people are now rolling out

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the red carpet? It is interesting that it wasn't too long ago that no

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one quite wanted a banker in their backyard, and all of a sudden we are

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being invited over for the barbecue! Interesting stuff! Staying with the

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banks, Theresa May speaking today, but she is obviously going to be

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keen to speak to the big bosses of the banks. That's right. She will be

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meeting with bosses, the chief executive of Goldman Sachs, Larry

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Fink, the boss of Blackrock. These are card-carrying members of the

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global elite that she has been so scathing about, so that will be an

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interesting meeting. She will be trying to reassure them, we may be

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leaving the single market but we want the best possible access to the

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single market, we will fight for access to the financial services arm

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to get good access to Europe, and as you just heard Jes Staley say,

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Barclays is the biggest underwriter of European bonds in the world,

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European governments rely on London to do some of the business, so a lot

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of people thinking it would be anyone's interest on either side for

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those services to be disrupted. London is the wholesale bank for the

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rest of Europe. If your bank close down and you couldn't get to it, it

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would affect your life quite a lot, and that is what people are banking

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on. She's probably limbering up right now for her speech which is in

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35 or 40 minutes. What sort of reception do you think she will get?

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I think she will get a fairly cool reception. She will get everyone's

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attention, people will know what she means, why she wants to leave the

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single market, what deal she is after, but I think the political

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reality is that at some point, the other 27 countries have to believe

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that this is a club that it is better off being in that out. We

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heard the German minister saying that whatever deal gets done, it

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must be inferior to membership. She will get an interested audience who

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will say, how can you pull this off, and what exactly is it that you

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want? She spells out, we want the best possible access, you are our

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friends and partners, we may be leaving the European Union but we

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are not leaving Europe. Thank you, Simon. I understand it is minus 20.

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You look cold! It is quite cold. You are doing very well despite the

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challenges. See you soon. Nice and warm in here!

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Limbering up. As soon as you said that, I am imagining her... Theresa

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May in her hotel room getting ready, pacing the floor. OK, Sally! Let's

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touch on some of the other stories making headlines around the world.

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Renegotiating the Nafta trade deal with Canada and Mexico is the Trump

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administration's top trade priority - according to commerce secretary

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He was speaking to US senators at a confirmation

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Mr Ross said China was the "most protectionist" country

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among large economies - but said Nafta is "logically...

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the first thing for us to deal with"

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Shares in TV streaming service Netflix soared as much as 9%

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on the news it is growing much faster than expected.

:09:26.:09:27.

Netflix added just over 7 million new subscribers in the last

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three months of 2016 - a third more than forecast -

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and expects to break the 100 million mark by the end of March.

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Netflix has invested heavily in original content whilst ending

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deals with top studios - a gamble that is paying off.

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Shares of Cathay Pacific have fallen sharply after the Hong Kong based

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airline said it would restructure and cut jobs - in the face

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of what it calls "huge pressure on our business".

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Cathay is facing the rise of low cost carriers in Asia -

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as well as expansion by its premium rivals - and uncertainty

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Investors though are concerned by a lack of detail

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about the restructuring, which Cathay describes

:10:10.:10:10.

I'm glad you mentioned that, the reasons why the shares were down,

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because normally when a countries as we are cutting jobs, shares go up.

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They have been hit very hard. They are in a bad way. Very good airline,

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though. The other big story coming out of Asia today:

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A court in South Korea has rejected a request for an arrest warrant

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of the defacto boss of Samsung Jay Y Lee.

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Kevin Kim is in Seoul with the latest

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The last 24 hours may have been one of the longest and dramatic for Jay

:10:51.:11:03.

Y Lee. At the city jail, the head of South Korea's biggest company waited

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through the night until the court came to a decision to release him.

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Early in the morning, the judge said there wasn't sufficient reason to

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put him behind bars, and he was then seen walking out of jail with a

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slight smile, and apparently then he went straight to work. The message

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Jay Y Lee wants to send me be business as usual, but this may not

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be the and of the problems for the chief of Samsung. The company has

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been accused of bribery, and he may still need to face a trial if

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prosecutors press charges. Samsung has continuously denied the

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allegations of bribery, and their position is that contributions have

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been made, but it wasn't in order to receive favours. Bribery is not an

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easy crime to prove under Korean law. Neither has it been easy

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putting rich family members of conglomerates in jails for

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wrongdoing. In previous years, despite accusations, no Samsung

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member has served jail time, only suspended sentences, and for the

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time being, Jay Y Lee will not be the first was white

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just for the time being, we will be keeping an eye on that. In terms of

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markets today, it was a mixed picture.

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We had Janet Yellen speaking yesterday, the head of the Federal

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reserve. Everybody pricing in, maybe not pricing in but thinking we could

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see a rise in the interest rates in the US by March of this year. That

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has caused the dollar to move, and we have a weaker yen, which is

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caused a flurry of activity to write a whole week. In terms of Europe, it

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is a pretty mixed picture,. And Michelle Fleury has

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the details about what's ahead Yesterday we got a glimpse of the

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health of big banks, when Goldman Sachs reported strong profits.

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financial sector since the election financial sector since the election

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of Donald Trump, a view that was reinforced after the investment

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banking giant gave an up week forecast for 2017. Will the halo

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effect extend to credit card company American Express? It reports its

:13:23.:13:27.

fourth-quarter results later this Thursday, and watch out for earnings

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from regional bank bank of New York Mellon. Investors will also hear

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from the largest technology services company, IBM, which is scheduled to

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turn in its fourth-quarter results later in the day. Its cloud and data

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analytics businesses are expected to continue to drive revenue growth. On

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the economic front, a report from the commerce Department is expected

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to show that housing starts rose in December from the previous month.

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Good on you, Michelle. Joining us is Simon Derrick,

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Chief Markets Strategist, This is interesting what is going on

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at the moment, because you have the big boss of the American central

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bank, the Federal reserve, Janet Yellen, she speaks and the dollar

:14:12.:14:16.

goes up! Galette before, Trump speaks, he is trying to bring the

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dollar down! We certainly started the year with a bang rather than a

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whimper. You are absolutely right, the really interesting story that

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could be building here is the difference on topic with regard to

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the dollar. We have a Donald Trump that over the course of the last 12

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months in one form or another have said he isn't particularly keen on

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having a strong dollar because that undermines US exports and producers.

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On the other hand, you have Janet Yellen saying she is talking about

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hiking rates three times this year and again next year, which is

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bullish for the dollar, so who will win this particular battle? A tough

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call? A couple of places are still available on the Federal reserve

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board, people who vote on interest rates, that might be key. . Sorry we

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are being cut already, but you are going to come back and do the

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papers. We will talk to you very soon. Still to come:

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We get the inside track on globalisation -

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are its critics right that it is a recipe for inequality

:15:22.:15:25.

or the best way we have to lift people of poverty.

:15:26.:15:30.

You're with Business Live from BBC News.

:15:31.:15:47.

Moneysupermarket's twerking businessman in high heels

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and Paddy Power's cat-kicking blind footballers were some of the

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All of the top had complaints about offensiveness,

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but the advertising standards authority said that none

:16:07.:16:08.

Guy Parker is the chief executive of the ASA and he joins us now.

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I have got to say, the commercial, the man with the big bottom,

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twerking, it gets me. Interesting, some of the ads that attract the

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largest number of complaints are not the ones we need to ban, we did not

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ban any of the top ten last year, despite the fact that we took action

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against thousands of ads, mostly for being misleading but not one

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misleading ad in the top ten last year. So which ones did you take

:16:43.:16:47.

action against? Well, numerous ads, 70% of the complaints that the UK

:16:48.:16:52.

public make to us are about misleading advertising, and the

:16:53.:16:58.

typical stuff is unclear pricing, conditions that are not clear enough

:16:59.:17:02.

or are a bit hidden, surcharges that appear late in the day, exaggerated

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products and services, that is the meat and drink of what we do. It is

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really important that we look carefully at the complaints that we

:17:10.:17:14.

receive that ads are likely to cause serious and widespread offence but

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it is not enough that they are just this taste. White you say you take

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action, what action, what does that involve? -- you say that you take

:17:22.:17:27.

action. The ad is amended or withdrawn. In terms of those that

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have got all of our attention, those that we complain about the most,

:17:32.:17:35.

presumably the most effective? I don't know, I do know that nine out

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of ten of last year's top ten were television ads, half of the

:17:41.:17:44.

regulation we deliver at the moment is against advertising online,

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particularly companies own claims on their own websites and social media

:17:48.:17:50.

spaces, but it is still the television ads, that attract the

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highest numbers of complaints, ten out of ten of 2015's top ten. Thank

:17:57.:18:00.

you very much for your time, fascinating stuff, we all know the

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ad. People are not spoiling their pets,

:18:03.:18:13.

it seems, just a slight rise. You're watching Business

:18:14.:18:25.

Live, our top story, the Chief Executive of Barclays,

:18:26.:18:27.

Jes Staley, has told BBC News that he doesn't think Brexit

:18:28.:18:30.

will change London's position He said there might

:18:31.:18:32.

need to be changes to how the bank worked,

:18:33.:18:35.

with business routed through the Republic

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of Ireland or Germany but the bulk of what Barclays did

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would continue to be in the UK. There was a time when the people who

:18:40.:18:53.

ran the world economy is considered globalisation as a good thing.

:18:54.:19:04.

However critics say its a recipe for inequality.

:19:05.:19:05.

Since 2015, the richest 1% has owned more wealth

:19:06.:19:08.

Over the next 20 years, 500 people will hand over

:19:09.:19:11.

$2.1 trillion to their heirs, which is roughly the GDP of India.

:19:12.:19:14.

The boss of a FTSE 100 company earns as much in a year as 10,000

:19:15.:19:18.

people working in garment factories in Bangladesh.

:19:19.:19:24.

Sir Angus Deaton, Economist and Nobel prize winner, is in Davos.

:19:25.:19:39.

Great to have you on the programme, earlier this week, Oxfam came out

:19:40.:19:47.

and said, they said the top eight richest people Eion Morgan 3.6

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billion of the poorest on the planet, and in fact they said this

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whole wealth gap divide is worse than they originally thought. I am

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not sure I believe the numbers. OK, do you disagree with that? I think I

:20:05.:20:11.

do, I haven't had time to study it in detail but I am not sure they

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have done the corrections problem, and some of those people that they

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are portraying with are major philanthropists, like Bill Gates, I

:20:21.:20:24.

don't know how Bill Gates having so much money is bad for the world. I

:20:25.:20:28.

don't believe Oxfam was portraying them as villains, they were trying

:20:29.:20:32.

to illustrate a point, the point they were trying to make this time

:20:33.:20:36.

last year, that a huge amount of wealth is in the hands of it all

:20:37.:20:40.

proportion. The issue of inequality does not seem to be being resolved.

:20:41.:20:47.

What is your view on solving this problem, which is one that is

:20:48.:20:53.

getting worse, not better? I think you have to be very careful to

:20:54.:20:56.

distinguish how it is that people got that money, many of those

:20:57.:21:00.

people, like Bill Gates, Mark Zuckerberg, became very rich by

:21:01.:21:02.

doing things that helped everybody in the world. There are other

:21:03.:21:09.

people, who got very rich by getting special favours from government

:21:10.:21:11.

which hurt other people, and I don't think it is helpful to see

:21:12.:21:19.

inequality as a blanket figure. Carlos Slim, for example, perhaps

:21:20.:21:27.

got that money through special favours. INAUDIBLE QUESTION

:21:28.:21:31.

We need to make sure that people do not get rich by stealing from other

:21:32.:21:34.

people, by getting special favours from the government and what we like

:21:35.:21:39.

to call rent seeking, and that is what we have got to stamp out. We

:21:40.:21:42.

also need a much better democratic system than we have, and then the

:21:43.:21:48.

inequality problem, as you call it, would look after itself. How do you

:21:49.:21:53.

raise the wealth, we mentioned earlier, 3.6 billion of the poorest

:21:54.:21:56.

around the world, have you raise their wealth? They have been doing

:21:57.:22:05.

extremely well, actually, the decrease in poverty over the last

:22:06.:22:09.

ten years, the last 30 years, is one of the greatest achievements of

:22:10.:22:15.

mankind, and it has come through much maligned globalisation, so I

:22:16.:22:18.

don't understand that particular part of the issue. You are at Davos,

:22:19.:22:23.

do you think, every year, the great and the good gather there are, do we

:22:24.:22:30.

get anything from it, from the gathering you are at right now? I'm

:22:31.:22:34.

sorry, I did not hear anything you said. Does Davos achieve anything? I

:22:35.:22:41.

don't know, this is the first time I have been here, it is a very

:22:42.:22:46.

strange, very fragmented sort of event. With people who are clearly

:22:47.:22:52.

here for very different purposes. From your point of view, we have the

:22:53.:22:57.

inauguration of Donald Trump, to become the next US president, what

:22:58.:23:01.

do you think he will do in terms of helping or hindering inequality? I

:23:02.:23:08.

think it is very difficult to know what Trump is going to do, he has

:23:09.:23:12.

said many different things, some of those would make inequality more

:23:13.:23:15.

severe than it is, some may do something about it. If he actually

:23:16.:23:20.

goes about draining the swamp, as he likes to call it, I think that would

:23:21.:23:25.

help. On the other hand, it is not a very good signal that his cabinet

:23:26.:23:31.

ministers are all billionaires. We very much appreciate your time, I

:23:32.:23:36.

hope that you enjoy the rest of your Davos. Thank you very much. You're

:23:37.:23:45.

welcome. So many people there with different opinions, different views,

:23:46.:23:50.

gives you a taste of some of the discussions going on in Davos. Simon

:23:51.:23:54.

back with us. And you very much the joining us. Netflix is doing very

:23:55.:24:03.

well, subscriber figures through the roof. Huge shift in the way that

:24:04.:24:07.

people are watching films and television series.

:24:08.:24:09.

Gone are the days of the silver disc, everybody wants to be able to

:24:10.:24:14.

stream over the broadband connection, people want net flicks,

:24:15.:24:20.

and Amazon prime, iTunes, BBC iD player. -- Netflix. BBC I player.

:24:21.:24:34.

And not a bulk of silver discs around. Stream lots, just wish my

:24:35.:24:43.

broadband was faster. I understand that. Nothing but dancing, cooking

:24:44.:24:51.

and talent shows on the BBC and ITV, you may have a point, but don't

:24:52.:25:00.

forget, we are on the BBC! This story about the painting. Talk about

:25:01.:25:06.

fake news, this is a fake painting. The story is, they have discovered

:25:07.:25:13.

two paintings, produced by the same guy, both claimed as being

:25:14.:25:18.

masterpieces, by Sotheby's, there was a famous scriptwriter in

:25:19.:25:22.

Hollywood, William Goldman, used to say, the only thing you know about

:25:23.:25:26.

Hollywood, nobody knows anything. That is also drew about old Masters!

:25:27.:25:33.

Isn't it the paint! 400 years after the time... There is a new type of

:25:34.:25:36.

paint that they develop, silly, silly... You say silly, they got

:25:37.:25:40.

away with it for a long time and sold them for a lot of money. I'm

:25:41.:25:45.

going to be checking those old bits of velvet with the lady on them... !

:25:46.:25:48.

LAUGHTER Short and sweet but we appreciate

:25:49.:25:50.

it, thank you, have a good day. Paint by numbers you can't beat it.

:25:51.:25:58.

That is all from us, we will see you soon.

:25:59.:26:06.

Some of us will see some sunshine, some will be rather cloudy,

:26:07.:26:10.

generally speaking,

:26:11.:26:11.

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