03/01/2018 BBC Business Live

This is Business Live from BBC News

with Sally Bundock and Ben Thompson.

Changing the rules -

Europe gets to grips

with the biggest changes

to the financial system

since the financial crisis.

Live from London, that's our top

story on Wednesday, 3rd January.

The EU is aiming to protect

investors and boost competition

but can the lengthy new rules really

be made to work?

Also in the programme:

The United States blocks

the billion dollar takeover

of Moneygram by China's Alibaba

because of national

security concerns.

And cutting the cables.

Retailers are among the winners.

And cutting the cables.

We meet the boss of one firm

that's bringing wireless

charging to the masses.

So, is it finally time

to say goodbye to tangled

wires and bulky chargers?

And global car sales hit

a new record, despite taxi apps

and big investment

in public transport.

So we want to know -

will owning a car ever become

a thing of the past?

Let us know if you've got rid of

your car.

Let us know.

Use the hashtag BBC Biz Live.

Hello and welcome to Business Live.

I'm getting rid of mine this month,

that's the car!

The most significant changes

to Europe's financial system

since the financial crisis come

into force today.

The EU's new rules are known

as MiFID Two and are intended

to protect investors,

giving them better value for money

and making Europe's financial

services industry more competitive.

Now, one of the biggest

changes centres on the

research investors use

to decide which shares

to buy and sell.

It will now have to be charged

separately rather than bundled

with other financial services.

And to improve transparency,

all parties to financial

transactions will have to provide

a unique number known

as a Legal Entity Identifier

to make any trades.

368,000 were issued

between October and December -

that's a huge jump that's

being attributed to these changes.

But it's already proving to be

expensive - banks and asset managers

are believed to be spending more

than $2 billion

implementing the new rules.

Matthew McLoughlin is the Head

of Trading at the investment firm

Liontrust Asset Management.

Welcome to the programme. Sally,

outlining the details there and

clearly this is a response to the

financial crisis. I wonder how

significant it is. How will this be

being viewed in the city and

elsewhere?

Sure, you can probably

say how long it has taken together

to put together. It has taken seven

years. The documents themselves

contain 1.7 million paragraphs of

new and updated rules. It is the

biggest change we have had in the

financial markets for the last

decade in Europe.

Sally touched on

what it might mean for the banks.

What will it mean for us? What

difference will I see?

Sure.

Everybody in the studio and at home,

they have pensions or some type of

savings. All this money goes into

stocks and the stock market, the

bond market and other financial

instruments and it is a considerable

amount of money. So, you need laws

and we've learnt from history, 2008,

strict laws around how the money is

managed and governed. And I think

today is the day when this piece of

legislation comes into play. So

whether you know about it or not,

today is going to be an important

day for investors as they will be

gaining extra protection.

You talked

about how complicated it is. How

many pages there are to wade

through. Is everybody ready? Are all

the banks in a position to say,

"Today is the day, we're good to

go."

That's an interesting question.

We'll find out later today is the

real answer. I would like to think

the majority of people are ready or

nearly ready. I'd like to think so,

but I think there is a lot more work

to do.

It all sounds good in theory,

doesn't it? This is a regulators

trying to keep up with the banks.

The banks got ahead of themselves

and they were coming up with trading

platforms that the regulators

weren't aware of. It all sounds

great, but are there any dangers.

Does this limit banks?

One of the

main dangers is the cost of

implementing it. For brokers and

asset managers. It is expensive

business. So, if these costs create

barriers to entry for the market

then you might see fewer new

incumbents coming to the market.

That might less bring innovation and

less competition. You might see

possibly prices rising. That's the

opposite of what it was designed to

do, I hope that's not going to be

the case, but time will tell.

We

will keep a close eye on that.

Matthew, thank you.

Let's take a look at some of

the other stories making the news.

The UK's International Trade

secretary Liam Fox is in China

to try to strengthen business links

for the country after Brexit.

It comes as the Financial Times

reports that Britain could be

looking at joining a trade deal

between Pacific nations that was

scrapped after President Trump

withdrew the United States.

Britain's financial watchdog has

confirmed it is investigating

infrastructure giant Carillion.

The company, which has been

forced to issue a string

of profits warnings,

says it's being investigated over

the "timeliness and content"

of announcements made

between December 2016 and July 2017.

That covers a period for the firm

in which its share price slumped

and its chief executive quit.

The firm is building part

of the UK's new high

speed rail line HS2.

Spotify is being sued over

falgations that it used thousands of

songs without paying the relevant

music publishers.

The United States has blocked

the sale of money transfer firm

Moneygram to a part of China's

internet giant Alibaba.

It was a deal worth $1.2 billion.

It is the highest profile Chinese

deal to be rejected by Washington

since Donald Trump came to power.

Christine Hah is following

the story from our Asia

Business Hub in Singapore.

Christine, tell us more.

Well, the

company that was going to buy

Moneygram is Alibaba's mobile credit

and payments arm subsidiary and

Moneygram thought the - alibi bab ba

faces competition at home. This was

really quite important for them. The

deal was announced a year ago. They

submitted it for approval and

finally the Moneygram CEO said it

has become clear that the US

authorities won't let it go through

and part is due to security concerns

over US users data. China, the

Chinese Foreign Ministry spokesman

today came out and said that they

really hope the US can create a

level playing field for Chinese

firms, but it shows a toughening

stance that the US has taken. It is

not the only deal that has been

blocked and it won't be the last.

In Japan we had no action. A public

holiday in Tokyo. Elsewhere in Asia,

we saw gains across board following

another record breaker the night

before in the US. We had technology

stocks surging again State side and

that fuelled the sentiment in Asia.

Let's look at Europe. In London, it

is the retailers that are headed

high. You can see the FTSE down a

little bit, but actually the likes

of Next and Marks & Spencer's are

doing well. Next coming out with

better than expected pre-Christmas

sales. Next is seen as a bellwether

for the high street. Does it imply

that maybe our retailers had a

better time than we perhaps thought?

There was a concern about the high

street stores ahead of Christmas. So

we will see how that plays out, but

for now, Next coming out with

brighter news than we predicted. But

across-the-board, in Europe, a mixed

picture emerging right now.

And Samira Hussain has

the details about what's ahead

on Wall Street Today.

On Wednesday the Federal Reserve,

America's Central Bank will release

the minutes from its last

meeting in December.

Now at that meeting the committee

members raised interest rates

by 0.25% to a 0.5% and it marked

the third rate rise for 2017.

So investors will be looking

at the minutes for more hints

about any other rate rises that

could be coming in 2018 and any

new insight on the new US tax code

and its economic impact.

Now, also happening the drugstore

chain Rite will report a drop

in revenue, but the company's bottom

line is likely to improve as it

moves ahead with the process

of selling 1932 of its outlets

to Walgreens Boots Alliance.

Joining us is Jeremy Stretch,

Head of Currency Strategy

at CIBC World Markets.

Hi, Jeremy. Happy New Year. I put

oil on the board. Iran is in the

headlines and normally when we talk

about the Middle East and

particularly places like Iran or

Iraq, we talk about oil because you

expect to see a spike in prices.

It's not quite happened. But there

is still a bit of confusion, isn't

there?

Indeed. We're seeing numbers

with the six as the big figure and I

think that's quite important

because, of course, we have seen

this sort of maintenance of oil

prices in a 40 to 60 range over the

course of the last two or three

years. We are pushing towards the

top end of that range. We haven't

seen disruption yet, but because the

issues raise those geopolitical

fears in the region that is causing

an increased degree of tension and

we are waiting for the latest

infantry data out of the US which

may show that stockpiles are

falling. We are in a global

synchronised recovery. That's

driving up demand for oil and if

there is going to be disruption to

the supply then that could create

instability in terms of prices and

that would have inflationary

consequences and it could have an

impact on sell tral banks.

So,

having said all of that, and you you

neatly wrapped up everything from

the growth forecast to what central

banks are doing to oil and share

markets. What's ahead this year, do

you think?

Well, I think as far as

this year is concerned, I think

there is still this perpetuation of

a global synchronised recovery, but

what we are seeing central banks

outside of the US looking to

maintain or looking to row back a

bit in terms of the monetary

stimulus. We have seen interest

rates going up in the US over the

course of the last couple of years,

we have seen an interest rate hike

in the UK and other places such as

Canada raising rates. We are

starting to see other central banks

starting to say there is no

requirement to have such

exceptionally easy monetary

policies, we are going to see

central banks stepping back a little

bit and that's going to make it more

interesting to see how the financial

markets can actually operate on

their own as it were. So moving away

from the training wheels or the

stabilisers which have been

supporting markets.

Will the

attention be off central banks to a

degree? I feel in 2017 we were just

watching them all like hawks really?

I'm not saying, I wouldn't say that

the attention is off, but it is

switching to different central

banks. So, growth, still looks to be

firm both in 2018 and in 2019, but

the question is how are the

financial markets going to be able

to operate as we start to see less

stimulatetry performance from those

central banks. We have seen the

Federal Reserve hike interest rates

in two years. It is the turn of

others to step up to the plate.

Jeremy, thank you. You're really

upset, you love talking about

central banks.

I do. It is one of my

favourite things. I will keep doing

it. I don't care!

She will!

Still to come, cutting the cable.

We meet the boss of one firm

that's bringing wireless

charging to the masses.

So is it finally time to say goodbye

to tangled wires and bulky chargers?

I hope so.

You're with Business

Live from BBC News.

The latest news from Ryanair.

You might be surprised to hear this.

Ryanair passenger numbers were up

again by 3% in December.

That's despite the chaos from the

cancelled flights and the pilot rota

fiasco.

It comes as Ryanair confirmed it

applied for a British

air operating licence.

A move that could be required

if it's to keep its small domestic

UK service operating after Brexit.

Let's speak to Peter Morris,

Chief Economist at the aviation

consultancy, Ascend.

Good to see you, Peter. What do you

make of Ryanair's numbers?

It shows

that it is not for no reason that

they have become the biggest, most

successful carrier in Europe. They

have been able to flex their

business model and to expand across

different routes all the way across

Europe and beyond and so they are

dependant on individual markets

becomes less and less. So they have

been able to get to, I think, it is

95% load factors in December which

is unheard of in the airline

industry. So, they, you have to say

they must be doing quite a lot

right.

Brexit poses some questions. As we

touched on in the introduction, they

have now applied for this license

which would allow them to keep

operating their domestic service in

the event of a hard Brexit. Can you

explain the domestic service. What

do they do?

That is roots like from

Stansted to Belfast or Stansted to

Edinburgh and so on. But it is

interesting. If you look at the

schedule for this quarter compared

to last year, you will see there is

a cut in Ryanair seats of something

like 75% year-on-year. So their

dependence on the UK market has

actually reduced, particularly the

UK domestic market.

Peter, thank

you. Peter Morris giving us his take

on the numbers from Ryanair.

A reminder if you want any more

information on any of the stories we

are covering, check out our website.

This brings together all of the

BBC's business journalism including

results from Next and what the

results tell us. Also the story we

brought you earlier about Carillion

under investigation from the

Financial Conduct Authority. Details

on the website. Financial traders

across Europe are grappling with the

sweeping new EU rules which came

into effect today, which are

supposed to protect you and me the

investor, and boost transparency.

The regulations come into force

today but there are questions about

whether banks and financial

institutions are ready. Many in the

UK, France and Germany said they are

ready but elsewhere it is a slightly

different picture. Let's have a look

at the markets in Europe. Last night

we had a record close on Wall

Street. There was a strong session

in Asia. But in Europe, it is fairly

mixed. London not joining the party

at the moment. Some of the analysis

does suggest the introduction of

those regulations has put a damper

on markets in Europe today. Banks

and institutions have got to put

things into effect and there is

concern about smaller trading

companies and how they are affected

by this.

We've all been there...

Out and about and suddenly your

phone's battery dies.

A perfect excuse not to be able to

get in touch!

And unless you're going to carry

a tangle of wires and a bulky plug,

it means you're out of luck.

So that's why the market

for wireless charging has exploded.

It's expected to be worth

$37.2 billion by 2022.

It's expected to grow by 44%

between 2016 and 2022.

One big player in the

market is Aircharge.

It's got 25,000 charging

points in 40 countries.

Most of them operated

in collaboration with clients

like McDonald's, Starbucks,

Costa Coffee, Virgin Atlantic

and major hotel chains.

We're joined by Steve Liquorish,

the founder of Aircharge.

Steve, nice to see you. Welcome to

the programme. We have touched a

little bit on how it works. Just

explain it to us.

I have brought my

props with me.

So this is what

people might see.

Visually, it's

sort of looks like a coaster. What

you're seeing is this sort of thing

being built in by furniture

manufacturers like IKEA. The

automotive industry is putting

charges into vehicles. It is a drop

and charge solution. When you see

the furniture, you see the coaster

and that

defines where you drop your phone on

to charge the phone.

The point is

that I would simply have to put my

phone on like that,...

And that is

transmitting power. The idea is to

build an ecosystem globally so we

can forget the wires and we have

many to plug in. Aircharge or an

early mover in this market and

consequently have become the world's

largest deployer of public charging.

One of the important thing is the

industry has been waiting for is to

come up with an industry standard.

Now we have the two big players, the

handset manufacturers Samsung and

Apple are playing in the same

sandpit.

When Apple launched its

iPhone ten, your company was up

there in lights and that is

something you were surprised to see

but what a fantastic moment for

Aircharge in terms of brand

recognition. You describe yourself

as one of the early movers. Was

luck, something you stumbled across

back in Asia in 2013?

Personally, I

have always enjoyed technology be

not technology for technology's

sake. It made perfect sense. I made

the analogy with hydration. We all

drink water little and often all

day. We are becoming reliant on

devices and if we can have any

ecosystem that is ubiquitous, a bit

like hydration for your phone, if

you look around restaurant, I can

see people's phones, so why not have

them charging while you are sat down

and on trains, planes and

automobiles etc?

The makers of

phones are making the batteries so

good and much more better developed

so that they last that much longer,

so we're not always running out of

battery.

Consequently screens are

becoming brighter, we are consuming

more and more media over our

electronic devices, and consequently

this battle between how much we use

the devices and how quickly the

battery technology can move forward

is pretty, it is not catch up at the

moment. Battery technology is not

catching up. It will be sometime in

the future before we see the need

for power to disappear.

What is the

biggest hindrance? We have often

talked about this when we have

talked about rechargeable cars,

putting in the network. What comes

first? It is a chicken and egg

thing. Is it the demand from

consumers or is it that you can

offer this stuff so people think the

next phone that I buy I will buy one

with wireless recharging

capabilities?

We reached tipping

point a couple of years ago when we

saw some big brands climbing on

board with this technology.

McDonald's was an early mover. They

saw it as a footfall driver, as a

differentiator for their brand. That

has encouraged the handset

manufacturers. And the wireless

Power Consortium, the industry

global standard, has seen membership

rocket in the last few months, since

Apple joined the standard. So huge

things to come. I think we will all

grown to expect wireless power like

we do with Wi-Fi. If you cast your

mind back to Wi-Fi before that

scaled properly.

What did we do

before Wi-Fi?

Absolutely!

Steve Liquorish from Aircharge,

thank you. Nowhere to hide.

Self-driving cars seemed

like the stuff of science

fiction not that long ago.

But global auto giants are now

developing and refining

the technology, trying to work out

what that future of cars will be.

Theo Leggett got a sneak preview

of one just launched

by the French manufacturer Renault.

Now, if you've never done

this before, it really

does feel quite strange.

We are doing 115 kilometres

an hour on the motorway,

and I'm not touching anything.

My colleague here has a safety setup

just in case anything goes wrong,

but the car is driving itself.

Now I'm going to do something that

I've never done before

and I don't think many people have.

We're doing 103 kilometres per hour

on the motorway and I'm going to put

a virtual reality headset on.

Here we go.

Now, at the moment, I know I'm

driving along the motorway.

But because I've got

the virtual reality headset on,

I'm actually flying over a valley.

I can see lakes beneath me.

There are birds around me.

There is a large lunar

landscape up in front.

So it's a completely

different world.

And what Renault are trying to do

here, is envisage a world

in which you are doing a long

journey, you don't need

to drive the car, so you can

turn your mind to other things.

Relax, sit back and enjoy the show.

Do as you have not seen him before.

-- Theo. A lot of you have been in

touched about getting rid of your

car. We have obviously touched

another. Gary said get out of the

metropolis and get into rural areas

where you will find you need a car.

I know, I grew up in a rural

village.

Car sales topped 90 million but we

keep hearing that car sales are

falling.

Globally we are seeing

population growth and globally we

are seeing people become wealthier

so as they become wealthier they are

looking towards luxuries we have

become accustomed to in Western

societies. As China becomes

wealthier they see an explosion in

terms of car ownership. That is

driving the global phenomenon. We

are also seeing it in western Europe

outside the UK, where as people have

benefited after they resent crisis,

that has encouraged car sales to

advance.

Jeremy, short and sweet,

nice to see you. Thanks for

explaining that. Thank you for your

tweets. We will look through them

later.