20/06/2017 BBC Business Live


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This is Business Live from BBC News with Ben Thompson and Sally Bundock.


UK authorities launch criminal proceedings against Barclays bank


over claims it committed fraud in a deal with Qatar at the height


Live from London, that's our top story on Tuesday 20th June.


The former chief executive and three other ex Barclays staff are ALSO


We'll get the latest from our Business Editor.


Also in the programme, setting a course for Brexit,


the UK's finance minister outlines his vision


This is what the European markets are looking like. We'll tell you all


you need to know for the day ahead. Banks Down Under in trouble as well.


Some down-graded by Moody's. Today, as Venetians vote to ban the big


cruise ships, let us know what you think. Are you a fan of a cruise or


is it possibly the worst holiday idea that you could even come


across? ! Use # Bizlive.


The former chief executive and three other ex Barclays staff are ALSO


The charge relate to the emergency funding. At the height of the


financial crisis in 2008 this was. It was at the same time that rival


banks, RBS and Lloyds turned to the Government here in the UK for help,


but Barclays instead opted to seek money from Qatar, the Gulf state.


There are now questions over how the funds were raised and what Barclays


offered to Qatar in return. Let's get the details with our Business


Editor Simon jack who is in Central London for us. This has been


rumbling on for a time. It's interesting to look at the detail.


RBS and Lloyds went one way, turned to the Government, Barclays said we


are going to ask Qatar for money? Yes. There are two bits of that


transaction and fund-raising in Kay far which prompted this five-year


investigation. The first was advisory fees that were not


disclosed first and eventually it was disclosed at ?332 million, that


was the amount paid to Qatar holdings who supplied the investment


in advisory fees. There was a question mark over whether that


advice was non-existent and this was really just like a bung to their new


benefactors in the Middle East, if you like. The second was a loan that


was made from the bank to Qatar Holdings at around the same time as


this investment and the charge there is that essentially the bank was


lending Qatar money to buy shares in Barclays Bank. That's what's known


as unlawful financial assistance, a big no-no for regulators. The most


interesting thing is, this is the first time senior executives have


been personally charged with criminal conduct for their role in


the financial crisis. Now, as you say, around this time, RBS and


Lloyds were turning to the Government, Barclays was desperate


not to do that and some wild say the SFA may eventually get their man one


day when it goes to court, but have they got the right person, because


in a way it was Barclays attemptses that ousted this person. Barclays is


considering its position. We are yet to hear from John Varley, the former


Chief Executive and the other executives. One very important point


I should point out, this is Barclays Plc, this is the holding company


that has been charged. It's an operating company which is Barclays


Bank. That has not been charged. That is important because, if


Barclays Bank, the operating company, was to be convicted of


criminal charges, they would find it very difficult to do business in


other areas of the world, including at least 50% of their business in


the US in their investment banking business. It's very important, the


distinction between the holding company and the operating company.


The operating company's not been charged. I'm told if they can get a


fine in the low hundreds of millions and carry on with their business in


the US and Barclays Bank wasn't charged, they might plead guilty to


this so they can move on with their lives and start rebuilding the


business. They're considering their position as we speak this morning.


Just a brief word on what it tells us about the culture of banking, we


know since the financial crisis so much has changed in terms of


regulation. What does it tell us about what was happening in that


fateful weekend in 2008? Yes, it tells us that the powerful bankers


were well connected to some of the wealthiest people in the world,


Sheikh Mansuhr for example in Qatar. There are claims from other parties


saying they were owed money as well and that rumbles on. They were


desperate for the Government not to be a shareholder. If you watched RBS


over the last ten years, you will remember the boss there had to


forego his bonus year after year because it was Government-owned and


it was felt the Government couldn't sanction big payouts like that, so


by keeping the Government out of their business, they were able to


keep paying themselves by industry standards pretty well.


Thank you very much. We have heard from Roger Jenkins, one of the four


individuals being charged. He said he'll vigorously defend himself


against the criminal charges filed by the Serious Fraud Office. That's


Roger Jenkins, the first to respond. Let's take a look at some of


the other stories making the news. The republican house speaker


has vowed to complete Paul Ryan says President Trump


and his fellow Republicans in Congress cannot allow the chance


of overhauling the US It's no longer just


about funny faces and filters. Snapchat users will be able to watch


scripted dramas and comedies after Time Warner and Snap agreed


a deal to develop original content. Time Warner brands HBO,


Turner and Warner Bros will also The deal is reportedly


worth US $100 million. Tokyo's Nikkei finished


at its highest level since august 2015 boosted by optimism over


the health of the US economy - Comments from the New York Fed Chief


suggesting that the outlook Oil prices hitting a new seven month


low, as increasing shale production, along with rising output from Libya


and Nigeria undermined OPEC In Europe there's a lot going


on today not least here in London. Bank of England governor Mark Carney


is speaking this morning, One to watch after last week's wide


spilt on the monetary policy committee with three policymakers


voting to raise UK interest rates. The pound didn't do much


as the first day of Brexit talks got And as we've been reporting -


Barclays and four individuals, including former boss John Varley,


have been charged with conspiracy to commit fraud relating


to the bank's emergency fundraising And, the details about what's ahead


on Wall Street Today. Here is Samira. FedEx's shipping


company's bottom line will be revealed. Investors will be


interested on what is coming up looking at forecasts for the new


fiscal year and on the cost measures. The maker of photo shop


will be reporting earnings. Its higher demand for software on the


cloud will be boosting revenue. And the second largest US home builder


will also be reporting earnings, that is Lennar. Better job


opportunities for young people have boosted home sale else. Investors


will be looking to the spring selling season and what the company


expects going forward. Joining us is James Bevan,


Chief Investment Officer at CCLA Nice to see you, James. Good to be


here. Whilst we are chatting away, Mark Carney's delivering his speech,


this is all ongoing in London at the moment. Absolutely. We can see there


the Governor of the Bank of England, just following on from Philip


Hammond, the Chancellor of the Exchequer, they are all discussing


Brexit, the negotiating stance. At the same time, we have Barclays


unfolding, a Serious Fraud Office investigation, criminal charges,


just gives your thoughts on all of this? A busy day? As a microcosm for


Barclays itself, this is relatively old news, and if there is a fine of


say ?200 million, that's worth around two bases points off capital.


This is a bank trading on 0.7 with tangible book value, in other words


cheap given that banks tiply shouldn't trade to discount to their


tangible book value. Can I ask though, four individual bankers are


also being charged, John Varley one of them to who is really


respected... A man of immense integrity, absolutely. He's being


charged, criminal charges by the SFO, him and three others? Exactly.


I want to separate out the extraordinary personal misery Mr


Varley will be feeling on the back of the charges and the fact that he


is a man of immense integrity from our position as market commentators


and investors where frankly we have to let that go. Mr Varley has


retired. Where is bay clays? It has ruffly a 5% return. It has an


opportunity to do much better. That is why people don't want to sell the


shares. That is why the shares are down a bit, not a big reaction?


People are saying, it's still sorting problems out from the past.


It's not affecting Barclays, they have a huge opportunity, shares


could go a lot better. Let us talk about the other big UK story, Mark


Carney speaking, the Governor of the Bank of England. We got the interest


rate decision last week, no change? Quite right. The split was what


everyone was looking at; three voting for a rate rise. We are not


there yet, of course rates aren't going up, but they're looking to the


US where rates are going up, what does it tell us? We might get three


more hikes in the US to a peak in the current cycle of around 2% in


the States and that would be consistent with a climate of really


quite low growth and also low inflation, so we have this


extraordinary situation where we have bond yields falling and equity


markets rising. On the face of it that appears odd, if it's correct


that we have a climate now of sustainable noninflationary growth,


we can see bond yields continuing to stay low. We keep talking about


rates going up but they are going up to historically low levels,


emergency levels, we have to keep remembering we are emergency low


levels? We absolutely are and the UK economy faces many hurdles, Brexit


clearly is the headline issue but we have a composition challenge, we


have an economy that cannot deliver strong productivity growth because


it's overly dependent on financial services that not enough


manufacturing production is happening. Where does the


productivity come from? Historically it's come because we put more money


into the economy. We don't want to have more debt. Productivity debt is


challenging. That will be a big challenge for the May Government.


James will be back later to talk about more stories, including his


take on cruise holidays. Don't forget that one! Lots of comments


coming in already on that one, cruising holidays - your idea of


heaven or hell. Or somewhere in-between!


Moodies has downgraded 12 Australian banks. Hywel Griffith is in Sydney


for us. Talk us through this, they have said in big cities like


Melbourne and Sydney, prices are booming and that is not sustainable?


Yes, and they have been booming for several years, it's what everyone


here in Sydney talks about, when will that boom finally come to an


end, the bubble burst? Moodies weren't expecting a sharp


correction. A month ago we heard from Standard Poor, they thought


things could go south quickly as they downgraded the ratings of the


banks, so there is concern about how much debt has been carried, about


how wages growth is slow and the number of interest-only mortgages


being offered by the banks. The Australian reserve bank is also


worried. We had the minutes of its last meetings two weeks ago, it's


kept interest rates low, it's trying to follow things really day-by-day.


But everyone expecting some sort of correction. We know already that the


prices of apartments have started to cool. That's where we have seen a


lot of money spent in the last couple of years. Thank you very much


indeed. Still to come: The UK Finance Minister, Philip Hammond,


has just set out his vision of Britain after Brexit. We'll be


assessing what he had to say right now, as we speak, Mark Carney, the


Governor of the Bank of England, is in the same place delivering his


speech as well. That is the scene live now at the


Mansion House. Stay with us. Day two of Brexit negotiations -


and more calls from business The latest is from the Society


of Motor Manufacturers and Traders. It says the Government needs to make


sure there's a transitional Brexit deal to protect


the car industry. The boss - Mike Hawes -


told us a full deal We need a back-up plan. Something


that gives us part of the customs union, ideally part of the single


market so we can maintain the success that we're currently


enjoying. We have a trading relationship with over 160 countries


around the world. We benefit from some of the existing trade


aagreements that the EU already has with Europe. What happens with those


existing arrangements and the new deals that are currently already


being negotiated, we really want to see the UK trading and being


successful around the world, but not at the jeopardy what we currently


have. In his speech today Mr Hawes


will say that a lot A lot of cars are made in the UK,


but they say it is Europe that's their priority not necessarily the


home market, the UK. If we look at where we are, there is less than 20


months before we leave the EU and we recognise we're leaving the EU. For


our sector to be a success we need to have a new arrangement with our


biggest market. The chances of doing that in less than 20 months and


having to be approved by all the respective parliaments, I think is


slim. So we need that back-up plan. We certainly don't want


brinksmanship and we don't want to go near the cliff edge without


having some arrangement supporting us. We are part of the European


automotive industry and yes, we are a big market, but Europe is a bigger


market and I have been talking to various member states, organisations


across Europe and they say the future is more Europe than the UK


automotive market and that makes sense.


The Chancellor of the Exchequer, Philip Hammond, has just been


delivering his speech at Mansion House.


Our top story, Barclays Bank and four individuals


including its former chief executive, John Varley,


have been charged with conspiracy to commit fraud.


The charges relate to the bank's emergency fundraising


during the financial crisis in 2008 and agreements between Barclays


Barclays shares down a touch on the news.


All eyes are on the UK's Finance Minister today


as he outlines his vision of Britain after Brexit.


The Chancellor of the Exchequer, Philip Hammond has been


delivering his famous Mansion House speech in London -


one of the biggest set-piece events of Britain's economic calendar.


Mr Hammond is hoping to calm fears of an abrupt shift in relations


He acknowledges the UK will leave the single market and customs union,


but insists it should reach a deal that allows British goods


to flow without tariffs, delays and bureaucracy.


And he stresses it would be "a very, very bad outcome"


That's despite the Prime Minister Theresa May's mantra that no deal


One of the biggest issues, of course, is immigration and the


Chancellor says that while the UK seeks to manage migration t doesn't


want to shut it down entirely. We are not about to turn inward, but


we want to make sure that the arrangements that we have in place


work for our economy just as the British people understand the


benefits of trade so too they understand how important it is to


business to be able to access global talent and to move individuals


around their organisations. So while we seek to manage migration, we do


not seek to shut 2 it down. Neil Williams, Chief economist,


Hermes joins us now. The governor of the Bank of England


is delivering his speech. What did you make of what he had to say?


Well, a softer tone. Many of us in business would welcome that. Talking


about free trade and not turning inward and also encouragingly


pointing out the importance of services and financial services


which respectively are about 80% and 10% of what we do in the UK. This is


the start of a negotiating process. There is a lot of cherry-picking


here at the beginning and after 12 months of being in the departure


lounge in terms of Brexit, I for one are buckling up for a long journey.


It will take way beyond the two years we're hoping for for Article


50. It's only day two. So much more to deal with. It's interesting


because we heard earlier from UK car makers, we hear from the City of


London, we hear from so many different parts of industry and


business. As you say, it is a balancing act. Who gets what at


these negotiations and who for the UK should be a priority. Who do you


think should be a priority? Well, the bottom line as well is that we


have possibly chosen one of the worst times to go into these


negotiations because of course elsewhere in Europe there are


elections almost everywhere. We have managed to get through France and


Holland without too much disruption, but we've got Germany and Italy next


spring to come. It is surely not in the interests of those mrushtions to


give us a no strings attached deal otherwise it will look like we're


opening the trap door for other countries to follow suit. There will


be a lot of position swapping on the way and that slope that Mr Haloned


talks about out of the EU, I hope that that is a slope that doesn't


lead to a path that effectively gets us back to square one which takes


many years. What's your view on our position now on this side of the


general election? Well, if you believe the process is going to be a


long one then the election upheaval was an additional speed bump on the


way. En route to the calendar we're going to have to get this through


Parliament and looking at it briefly, what Mr Hammond seems to


want is negotiations leading to November 2018 and then sign off in


2019. We then effectively try to get the whole thing sorted after a two


year settling in period. Has he factored in the 27 other countries


signing off as well though in his timetable? Well, I hoe he hasn't. It


is often at stages like this, to look at what presidents, the only


two we have is Greenland in the mid-1980s, it took three years to


sign itself out of the EU. They had one issue which was fishing rights


and Canada, you may remember, last year signed a deal. That took seven


years and it was almost derailed by a small state in Belgium. So,


straightforward probably, it's not going to be. I think you're right on


that! That's something we can be certain of, Neil, thank you.


Mark Carney, the governor of the Bank of England is still talking!


Lots to get through. People call him the George Clooney of Central


Bankers. Did you know that? I did that. But maybe George Clooney moves


a bit quicker. 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. The Business Live page


is where you can stay ahead of all the day's


breaking business news. We'll keep you up-to-date


with all the latest details, with insight and analysis


from the BBC's team of editors Get involved on the BBC business


live web page: bbc.com/business. on Twitter: @BBCBusiness


and you can find us on Facebook Business Live on TV and online,


whenever you need to know. We have touched on a subject that


gets you talking. That's the cruise holiday. It's like Marmite, you love


it or you hate it. James is back. Where are you? Just


declare... Well, I have been a non participant, but I don't have much


of a view either way. Come on, James. Are you sitting on the fence?


I am because I have no visceral appetite to go cruising and yet if


you said look, this there is this marvellous opportunity I'd probably


take it. If you lived in Venice... Definitely. What would be your take


on it? Many are saying and this is the story in the press the nations


have voted against these cruise ships docking, coming in to Venice


and yet many are saying the economy relies on the people on those ships?


I don't buy this issue of reliance on cruises. Venice gets one million


tourists in round figures. One of these large cruise ships has 4,000


people. So, the number of people who come, via aeroplanes or cars or


trains is huge. Equally, the vote which is non binding and indicative


only is saying we want you to come, but we don't want you to actually


have your big boats here, come in small boats and park outside. The


reason I'm laughing is because a lot of you have been getting in touch


with your tweets this morning talking about them. Lesley, a big


fan. Yes, I have been on three already this year. Cruising is big


business and the Venice economy will suffer says Lesley. Jonathan says


"Great news they have been banned." Naomi says, "A friend of mine went


on a cruise and the ship was so big, it was like walking around Croydon!


" I have been on a cruise to the Falklands and the other was North


Cape and spits burg. Thank you, we know your holiday calendar so far.


More on those stories that we have been covering on the website.


Bye-bye. Hello there. Good morning. Yesterday


was the hottest day of the year so far. Temperatures got to 32.5


Celsius in South West


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