07/12/2017 BBC Business Live


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07/12/2017

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This is Business Live from BBC News

with Jamie Robertson

0:00:040:00:07

and Sally Bundock.

0:00:070:00:11

Banking regulation -

will Europe's new financial rules

0:00:110:00:13

prevent another crisis or just

choke off investment?

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Live from London, that's our top

story on Thursday, 7th December.

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It's ten years since the financial

crisis, but up until now,

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there's been no agreement

across Europe on how

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to stop it happening again.

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That could change at a meeting

in Frankfurt later.

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We will tell you all you need to

know.

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We will tell you all you need to

know.

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Also in the programme...

0:00:550:00:56

Sins of emission -

a VW executive is jailed for seven

0:00:560:00:59

years in the US for his role

in the Dieselgate scandal And we'll

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be looking at the challenges facing

agriculture this century.

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Markets are recovering from

Wednesday's decline. We will talk

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you through the winners and losers.

And we will be looking at challenges

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facing agriculture this century.

Could the sea and seaweed provide a

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potential solution? As the world's

biggest Starbucks opens in Shanghai,

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do you think we have got enough

coffee shops?

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Just use the hashtag BBCBizLive.

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Hello and welcome to Business Live.

0:01:380:01:43

We will be tasting seaweed bacon in

about 15 minutes. Stay with us for

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that, if nothing else! Starting with

an anniversary I'm sure you

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remember.

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It's ten years since

the financial crisis -

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but still no pan-European agreement

on how to stop it happening again.

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In Frankfurt today that

could all change - we will tell

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you all you need to know.

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Central bank chiefs are expected

to decide new rules -

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on just how much cash banks have

to keep on hand for an emergency.

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They are known as Basel 3

after the Swiss city -

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but what are the key issues?

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Until now, banks have been allowed

to decide for themselves how much

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cash they need to stash away.

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But under new rules,

there will be what they call

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a standard approach

to assess the riskiness

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of the mortgages, loans and debt

that each bank holds.

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Basically, it will mean many

European banks will need to hold

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more cash in reserve.

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And the banks argue that means

less money to lend out

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which could damage the economy

and it could make them

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less competitive.

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In the UK, rules have been tightened

up since the crisis,

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with banks subjected

to annual stress tests.

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Early last week, the Bank of England

said all UK banks passed the latest

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tests.

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Gonzalo Gasos, Head

of Banking Supervision

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at the European Banking Federation.

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The bottom line, is this going to

make European banks safer in the

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financial crisis?

Of course, but let

me point out first that European

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banks have already largely

accomplished the objectives set out

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in 2010 by the group of central bank

governors and heads of supervision

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of Basel three. What we are

discussing today are some

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complimentary details. European

banks have three times more capital

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than before the crisis and that

makes us more resilient and more

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able to face adversity. That is the

most important piece of news today

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and there will be some compliments

to finalise these very long ... From

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all regions across the world, the

finalisation of the Basel three

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package means the end of the crisis.

It sounds to me as though you are

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saying, there is no dramatic change

today because the banks have been

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working at this for five, six years

already. If there is not much of a

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change, everything carries on just

the same as before, is that right?

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Well, my point is that we have

already accumulated much more

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capital and liquidity than we had in

the past. Now the new rules have

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some details that will need to be

carefully assessed in a European

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impact assessment that should be

rigorous enough to understand what

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impact will be in certain portfolios

like residential mortgages, trade

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finance, project finance.

Do you

think it will make banks less

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willing or able to lend?

Well, that

depends on the final details of the

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agreement. It will be published

later today. And how we have to

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assess that impact in certain

portfolios. At the end of the day,

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more capital beyond a certain level

only means a higher cost for banks

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and therefore for borrowers who are

the citizens in our European Union.

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Thank you very much indeed.

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Let's take a look at some of

the other stories making the news.

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One of Volkswagen's top

executives has been sentenced

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to seven years in prison and fined

$400,000 for his role

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in the Dieselgate scandal.

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The judge described Oliver Schmidt

as a key conspirator in this scheme

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to defraud the United States.

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More on that story later. It is all

over the press.

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Bitcoin has soared to a new record

high, above $14,000.

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The virtual currency has surged

from below $1,000 at the beginning

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of the year, despite questions

about its real value and worries

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about a dangerous bubble.

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Steinhoff International -

the owner of Poundland in the UK -

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has seen its shares fall

by another 18% this Thursday.

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They plunged by almost two thirds

on Wednesday after the South African

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group announced a probe

into accounting irregularities.

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Chief executive Markus Jooste has

resigned and the firm has

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postponed its full-year results.

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Let us have a look at the markets

now.

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The International Monetary Fund has

raised the alarm about the high

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level of debt in China,

saying it poses a risk

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to financial stability.

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That hasn't gone down

well in Beijing.

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You might think we have heard this

before, the IMF behind the curve,

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perhaps.

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Let's go to our Asia

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business hub where Leisha Santorelli

is following the story.

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Quite often the IMF says things many

have been talking about for months.

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That is correct but the IMF is not

crying wolf because the risks

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China's economy faces from a build

up of debt in the financial sector

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does risk triggering another crisis.

The IMF's report actually is another

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comprehensive assessment of how

China's financial system has been

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since 2011 and examining whether

China is doing enough to address all

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of the debt. China has relied on

exports and investment to drive its

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economy but many believe the growth

model has reached its limits and the

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build up of debt is posing a big

risk. The IMF is arguing China has

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to put financial stability above its

pursuit of high-growth or GDP

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figures and it is recommending

Chinese banks increase their cash

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cushion to protect against an

economic downturn.

Thank you. As far

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as markets in Asia, not perturbed by

the news from the IMF whatsoever,

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very strong session today. Japan as

well, up over 1%. A really good

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session. This follows quite a bit

decline for Asian markets on

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Wednesday. Wednesday marked the

eighth day in a row of declines for

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Asian markets. There has been a

bounce back today, but behind me,

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you can see the Dow down slightly.

You're right now... The markets have

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been going for nearly 40 minutes --

the FTSE right now. GDC is

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interested in buying Lord --

Ladbrokes Coral. We will talk more

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about the movers and shakers.

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And Samira Hussain has

the details about what's ahead

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on Wall Street Today.

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The US Federal reserve on Thursday

is likely to report extended credit

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rose to 17.50 billion dollars in

October. In earnings news, discount

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store dollar general will be

reporting. The company has been

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cutting prices more aggressively as

it looks to try to better compete in

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the grocery industry. Amazon's

purchase of Whole Foods is heating

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up grocery wars. Companies like

Walmart are ramping up grocery

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offerings to compete against the

online retailing giant. And we will

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continue to watch lawmakers in

Washington try to get a spending

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deal in place to avert a government

shutdown. Congress has until

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midnight on Friday to come up with a

short-term spending bill. Without

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any legislation in place, the

government will begin shutting down

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on Saturday.

Interesting. Perhaps

another fiscal cliff. We remember

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that!

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Joining us is Maike Currie,

investment director

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at Fidelity International.

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You wanted to focus on the states,

quite a few issues, jobs report out,

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all sorts.

Investors are keeping an

eye on the possibility of a

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government shutdown, also Donald

Trump's tax reforms, and tomorrow,

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the payrolls are out. Expectations

are jobs will be slightly more

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muted. Quite a strong month last

month because the figures were much

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better after the Hurricanes had

muted previous figures. This matters

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because next week, Wednesday, the

Fed will give its announcement on

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whether it will raise interest rates

and expectations are it will go

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ahead with the rate rise of 0.25%.

It is interesting because the US has

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led stock markets higher, it is

looking quite pricey, investors are

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questioning how long it can

continue, but the US is home to the

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stocks that are offering growth that

investors need in an era a very

0:11:140:11:20

paltry growth. Fundamental good

results coming out from these

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companies, very good reporting

earlier, a month ago, so there is

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justification for the prices. What

investors really want to do is

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wrapped that arms around the gold

standard -- gold standard, in

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technology, sustainable growth. The

tech companies are spending a lot,

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but they are doing it to invest in

all sectors so they can continue

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dominating.

Thank you very much. You

will return later to talk about some

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of the other stories. We have more

to come. They say see food and eat

0:11:540:12:02

it. Seaweed diet! Do not say that

too quickly! Seashells. That is all

0:12:020:12:11

coming up on Business Live. She

sells seaweed...

0:12:110:12:19

I am very hungry right now.

0:12:220:12:26

The majority of businesses expect

the fall in sterling

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to increase their costs.

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A British Chambers of Commerce

survey of over 1,000 businesses

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found that 63% of businesses

expect their costs to increase

0:12:330:12:36

in the next 12 months as a result

of the devaluation in sterling.

0:12:360:12:39

A quarter of businesses expect costs

to rise significantly.

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In comparison, only 6% of firms

expect their costs to decrease.

0:12:420:12:48

Anastassia Beliakova

is the Head of Trade Policy

0:12:480:12:52

at the British Chambers of Commerce

and she joins us from the newsroom.

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What I find odd is the timing. It

seems we have had the big increase

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in inflation as a result of the

devaluation of the pound. That is

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last year's story, yet you are

saying they are worried this will

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keep on going?

What is striking

about the findings in the survey

0:13:120:13:18

with American Express is that

companies, despite the fact they

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have been facing pressures from the

fall in sterling over the past year,

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they have not been hedging against

currency risks. A number of things

0:13:280:13:32

they could do to protect themselves,

half of the firms almost we

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surveyed, despite higher costs, they

have not hedged against currency

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risks.

I am surprised to hear that.

This is because of lack of

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information but also company is not

being proactive in terms of

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protecting themselves. There are so

many things they could do, take out

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insurance against currency risks,

sign forward contracts to lock in

0:13:540:13:58

the particular exchange rate, but

many are waiting and whilst they are

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waiting, they are seeing costs rise.

They need to take action to protect

0:14:020:14:06

themselves.

Do you think the result

will be they will feed those costs

0:14:060:14:11

through into higher prices or reduce

staff levels or cutting costs, how

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will they deal with it?

We're not

seeing at the moment this expressed

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in higher prices. But a number of

companies are saying this is

0:14:210:14:25

something they are considering. This

is worrying of course and it also

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highlights the importance of trying

to cut down costs before they are

0:14:300:14:33

passed onto consumers and before

they force companies to make quite

0:14:330:14:37

significant changes to how they are

run.

Thank you very much indeed.

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More detail on that story on the

Business Live page including other

0:14:420:14:47

stories like house prices, the fifth

month of rising house prices

0:14:470:14:54

according to the Halifax.

0:14:540:15:01

You're watching Business

Live, our top story:

0:15:010:15:04

Central Bank bosses are expected

to decide new rules later today

0:15:040:15:06

at a meeting in Frankfurt.

0:15:070:15:08

Known as Basel 3, they would

require many European

0:15:080:15:10

banks to hold more cash in reserve.

0:15:100:15:15

It is designed to try to reduce the

likelihood of another financial

0:15:150:15:18

crisis. Some say it would mean there

would be less money to lend out and

0:15:180:15:26

it would damage the economy.

0:15:260:15:27

it would damage the economy.

0:15:270:15:28

A quick look at how

markets are faring.

0:15:280:15:33

They are all heading higher, in the

right direction, not a big jump. I

0:15:330:15:44

have got some bags here are my left.

We shall explain about that in a

0:15:440:15:49

moment.

0:15:490:15:50

We shall explain

about that in a moment.

0:15:520:15:54

Agriculture in the 21st century

faces many challenges as a growing

0:15:540:15:56

global population puts pressure

on water and land resources.

0:15:560:15:58

So with the number of people

on earth expected to hit 9 billion

0:15:580:16:01

by 2050, how can we produce enough

food to feed everyone?

0:16:010:16:04

Well, one man thinks

he has a solution.

0:16:040:16:08

Seaweed needs just sea

and sunlight to grow,

0:16:080:16:13

and according to Dutch entrepreneur

Willem Sodderland, it is the most

0:16:130:16:15

sustainable food on the planet.

0:16:150:16:19

In fact, it's becoming so popular,

that earlier this month the Marine

0:16:190:16:23

and Aquaculture stewardship councils

launched a certification scheme

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for seaweed to set minimum

requirements for growing

0:16:270:16:29

and farming it.

0:16:290:16:31

After realising the health

and environmental benefits

0:16:310:16:35

of seaweed, Sodderland launched

Seamore in 2015, with a mission

0:16:350:16:39

to make seaweed an everyday food.

0:16:390:16:42

Joining us now is Willem Sodderland,

founder and CEO of Seamore.

0:16:420:16:48

He is here with his various samples.

And some place as well.

0:16:490:16:55

I know you are hungry.

I like that one. We have got seaweed

0:16:550:17:02

bacon and seaweed pasta. You could

if freshly for us this morning.

0:17:020:17:06

Absolutely.

Tell us how and why you

started this.

I was in a restaurant

0:17:060:17:14

and ordered a seaweed salad and I

got a plate and I could not find any

0:17:140:17:18

seaweed on it and it turned out the

tagliatelle on the plate was the

0:17:180:17:24

seaweed. That gave me the idea to

look into it to see if you could

0:17:240:17:29

swap carbohydrates for vegetables

which is something we were looking

0:17:290:17:33

into in my household.

What do you

think? I like that one. You used

0:17:330:17:40

crowdfunding? You'll yes, we did and

we tested the product with

0:17:400:17:46

consumers. How much did you raise?

We raised about 100,000 in the

0:17:460:17:53

beginning and then we raised more

from banks and also from former

0:17:530:17:56

investors.

How do you put it out

there to get all those people

0:17:560:18:03

interested? What do you say to them?

You start with a small group of

0:18:030:18:08

testers and you ask them to get it

out there. You bring the story to

0:18:080:18:13

the media and you create

storytelling basically. Then it is

0:18:130:18:16

picked up. Sorry, you ask a

question.

0:18:160:18:23

I know you are fascinated. Pass me

the bag of pasta. I could pass that

0:18:230:18:31

all the time, I have got three kids

and it is great. This takes awhile

0:18:310:18:36

to cook. How much is it? In terms of

price? That is a little bit over £5.

0:18:360:18:46

£5 for a bag of pasta, a bag of

seaweed. How do you overcome

0:18:460:18:51

people's perception of it?

It is one

of the reasons why we are presenting

0:18:510:18:59

it as a healthy good alternative

because people know what to expect

0:18:590:19:02

an do with it. Pasta and bacon. If

you give seaweed to people, they

0:19:020:19:07

have no clue where to start.

You are

selling it as a luxury item. You

0:19:070:19:12

will not solve the world's food

crisis with this.

We have to start

0:19:120:19:17

somewhere. With the wraps we are

introducing we are getting close to

0:19:170:19:22

normal price.

We must ask about the

sustainability of this. Many people

0:19:220:19:31

will be saying do we want the world

food crisis solved by people

0:19:310:19:36

harvesting the oceans. What about

the ecosystem of the oceans?

0:19:360:19:40

Obviously that is concerned. Firing

of seaweed in a shed space on a

0:19:400:19:45

large scale. That is why it is so

good that they came with standards

0:19:450:19:52

of harvestable farming. But we have

to get our food from somewhere and

0:19:520:19:56

we have more ocean than we have of

land and there is a compelling

0:19:560:20:00

reason to look to the ocean for

food.

The sea is closer. It is very

0:20:000:20:10

salty. That is sea salt obviously.

That is because it is a replacement

0:20:100:20:16

for bacon and bacon is salty and

that is why it makes sense.

We have

0:20:160:20:21

run out of time. Thank you for

coming in and cooking for us, we

0:20:210:20:25

appreciate it.

It is good. It is delicious. Seaweed

0:20:250:20:30

bacon butty with ketchup.

0:20:300:20:31

Seaweed bacon butty with ketchup.

0:20:310:20:33

The boss of global bank

Standard Chartered has been speaking

0:20:330:20:35

to our business editor Simon Jack.

0:20:350:20:36

He described contingency planning

for Brexit as "expensive,

0:20:360:20:38

complicated and inconvenient".

0:20:380:20:39

And he's concerned young people

from outside the UK are already

0:20:390:20:42

being put off a career in London.

0:20:420:20:44

We have already had some setbacks

for the talent pool in London

0:20:440:20:47

through the restrictions of student

visas, that is already a problem.

0:20:470:20:52

Some of the best talent that we can

have in the UK marketplace

0:20:520:20:56

are coming from students who have

chosen to study here and then stayed

0:20:560:20:59

for some extended period afterwards.

0:20:590:21:01

And you have noticed

that impact already?

0:21:010:21:05

We have noticed that impact already

more through a sense from non-UK

0:21:050:21:15

foreigners that this might not be

such a hospitable place any longer.

0:21:180:21:21

So it is more psychological

psychological than contractual as it

0:21:210:21:23

were, but it is something we might

be really careful about.

0:21:230:21:26

The UK has been successful largely

because it has been a welcoming

0:21:260:21:28

place for talent from any part

of the world.

0:21:280:21:31

I know when I listen

to the government spokespeople

0:21:310:21:33

they say that that will continue,

that is the intention,

0:21:330:21:35

unfortunately not all of the body

language and references

0:21:350:21:37

support the rhetoric.

0:21:370:21:40

That interview with the boss of

Standard Chartered is on our

0:21:400:21:44

website, so if you want to see it in

full, take a look. Maike Currie is

0:21:440:21:50

back as promised.

0:21:500:21:56

We have got to mention diesel gate.

One of the top executives in the US

0:21:560:22:02

behind bars.

And he has received the

maximum sentence of five years, so

0:22:020:22:06

it will be a deterrent. A few days

ago. Wogan reported it had hit its

0:22:060:22:13

targets three years ahead of

schedule. Two years on since the big

0:22:130:22:18

scandal it is on track and it is on

the offensive rather than the

0:22:180:22:23

defensive.

It has managed to say

that was then, this is now. There is

0:22:230:22:30

an emphasis also on electric cars.

They will have electric versions by

0:22:300:22:36

2025.

Absolutely, it has done a

fantastic job. It used this scandal

0:22:360:22:41

as a catalyst for change. There was

a lot of concern about brand image

0:22:410:22:45

at the time and they have emerged as

the winner.

Oliver Schmidt has been

0:22:450:22:53

put behind bars because of the

diesel scandal. Let's move on to the

0:22:530:22:57

scandal in Shanghai. This coffee

shop is huge. Do we need more coffee

0:22:570:23:04

shops? Tell us more about their

expansion.

We know China is a

0:23:040:23:08

country where T is the favourite

drink, but there is a lot of

0:23:080:23:13

interest and Starbucks is reporting

it is opening a new coffee shop

0:23:130:23:17

every 15 hours which is staggering.

It is moving into the emerging

0:23:170:23:23

world.

Starbucks expansion, there

seems to be no holding back right

0:23:230:23:29

now. We asked our viewers if they

think we need more coffee shops.

0:23:290:23:34

Jill says it is a shame they are not

combining with other shops.

0:23:340:23:43

Especially in villages and remote

locations.

We have too many bad ones

0:23:430:23:50

from calling themselves Artisan and

not many good ones. Are you a fan of

0:23:500:23:54

a coffee shop?

I am a huge fan of

coffee and coffee takeaways. The

0:23:540:24:00

coffee culture in the UK has

exploded and people are a lot more

0:24:000:24:03

discerning. They are not going to

big brand names, they are going to

0:24:030:24:08

independent coffee shops. Starbucks

in the UK is struggling because of

0:24:080:24:13

that, our consumption is changing.

It is more about the experience,

0:24:130:24:17

going for coffee and experiencing

something else.

One guy in the New

0:24:170:24:22

York Times says, once love has

begun, it never ends. He obviously

0:24:220:24:27

likes his coffee estimation mark

somebody says there are coffee shops

0:24:270:24:34

and there are coffee shops and there

are coffee flavoured frothy milk

0:24:340:24:40

shops. 280 calories. There are also

more coffee shops then you can shake

0:24:400:24:48

your beans that.

We have far too many bad ones from

0:24:480:24:52

calling themselves Artisan and they

are not very good ones. Starbucks

0:24:520:24:58

said they would have one on every

single corner.

0:24:580:25:01

That was the ambition. If Shanghai

is the way they are going, they are

0:25:010:25:06

not holding back.

I think the more

choice, the better.

Have we got onto

0:25:060:25:13

the subject of whether they pay

their taxes?

0:25:130:25:15

We have not got time for that. Thank

you so much for coming in, it has

0:25:150:25:21

been great having you here. Did you

try that seaweed pasta?

No, I will

0:25:210:25:25

try it.

The Green room is even

greener than ever today.

0:25:250:25:33

Because it has got some green pasta.

It takes quite a long time to cook.

0:25:330:25:41

40 minutes to soak it in cold water

and 20 minutes to cook.

0:25:410:25:44

We have got all the instructions

here. 20 minutes to soak and 20

0:25:440:25:51

minutes to cook it. But it is £5

about.

0:25:510:25:54

That is what I am worried about.

That is all from today, join us

0:25:540:25:59

again tomorrow.

0:25:590:26:01