:00:06. > :00:16.change in the Aude -- aid programme between England and India. We now
:00:16. > :00:18.
:00:18. > :00:23.have World Business Report. Welcome to World Business Report. The
:00:23. > :00:29.headlines: A new blueprint for banks, Britain will impose tougher
:00:29. > :00:34.rules to prevent another financial meltdown. Another day of action -
:00:34. > :00:40.strikers hope their voices will be heard as the Greek government
:00:40. > :00:45.debates painful economic cuts. China's president is in Russia
:00:45. > :00:55.hoping to sign a landmark gas agreement. Both sides are at
:00:55. > :01:01.loggerheads over prices. It is the biggest shake-up of a Britain's
:01:01. > :01:05.banks in living memory. The aim to prevent a meltdown in the event of
:01:05. > :01:11.financial crisis and protect high street savers. George Osborne will
:01:11. > :01:18.announce tonight plans for firewalls separating the retail and
:01:18. > :01:27.investment arms at major UK banks. Banks will have decayed higher
:01:27. > :01:37.amounts of money in their vaults. In his annual speech to the bankers
:01:37. > :01:39.
:01:39. > :01:44.Institute of London, George Osborne will pledge to ring-fence banks.
:01:44. > :01:48.This is the central proposal by the independent commission on banking
:01:48. > :01:56.in its April report. The Chancellor will set in train the privatisation
:01:56. > :02:00.of Northern Rock, it was nationalised in early 2080, he will
:02:00. > :02:04.announce that UK banks have to hold more capital for protection against
:02:04. > :02:09.future losses than the new international minimum. By putting
:02:09. > :02:15.retail banking into a separate legal subsidiary, ring-fenced
:02:15. > :02:22.investment banking activities, the giant parts of the banks will be
:02:22. > :02:26.less exposed in a crisis. The idea is that the retail bits of the
:02:26. > :02:30.major banks will have more capital to absorb possible losses and in
:02:30. > :02:38.conditions of extreme danger could be more easily hived off and
:02:38. > :02:46.rescued. We are joined by a banking analyst to make sense of this
:02:46. > :02:54.further. It is not a new idea, we hear a lot more tonight when George
:02:54. > :02:57.Osborne makes his speech. Basically, you have got to get an extra
:02:57. > :03:04.insurance policy for your kitchen even though you have an insurance
:03:04. > :03:08.policy for your house. As consumers, it'll mean slightly higher prices
:03:08. > :03:14.for a retail banking products. It'll be more expensive for the
:03:14. > :03:17.banks to run retail banking than it is now. In your opinion, is this
:03:18. > :03:23.the right way to protect the British banking system from another
:03:23. > :03:31.disaster we have experienced? hate to make this decision. You
:03:31. > :03:36.lose either way. Leaving them alone means we have to rescue them with
:03:36. > :03:41.huge amounts of money. The amount that we need to invest to save or
:03:41. > :03:45.to rescue the banks will now be significantly less. It is a
:03:45. > :03:50.compromise solution. Most of the banks will complain but then
:03:50. > :03:55.accepted. We do not know the detail of this yet. When it comes to the
:03:55. > :04:00.amount that banks have to put aside in case of a financial meltdown, it
:04:00. > :04:03.will be more than the international standard. Bankers say it is too
:04:03. > :04:11.much and it reduces our competitiveness. In retail banking
:04:11. > :04:14.that is not a real issue. Investment banking... Levels for
:04:14. > :04:24.investment banking will be different than four levels of
:04:24. > :04:28.
:04:28. > :04:35.retail banking. Is this a brick wall or is this a teabag?
:04:35. > :04:41.reaction from banks, HSBC is saying we are in favour of this? Lots of
:04:41. > :04:46.the banks are in agreement for retail banking. They have never
:04:46. > :04:52.made a lot of money in this sector. They are not that keen on making
:04:52. > :04:57.changes, no-one is, but they will accept it. Will it cost them a lot
:04:57. > :05:03.to retracted? Absolutely. It has never been done before. It will
:05:03. > :05:07.cost money but the banks have plenty of that. Thank you. We will
:05:07. > :05:17.make sure you are up to date on what George Osborne says later
:05:17. > :05:18.
:05:18. > :05:25.today. You can find out a lot more online as well. Robert Peston's
:05:25. > :05:32.blog is right there. You can get his full analysis. That will be
:05:32. > :05:39.updated later on. China's president is visiting Russia today - energy
:05:39. > :05:49.is at the top of the agenda. As you said in your headline, a bit of
:05:49. > :05:52.this agreement going on? Absolutely. Hu Jintao hopes a landmark gas deal
:05:52. > :06:01.will be signed. The two nations are in a deadlock, struggling to reach
:06:01. > :06:07.an agreement on prices. If an 11 power deal is signed, this will
:06:07. > :06:17.pave the way for a 70 billion cubic metres of Russian gas to China over
:06:17. > :06:28.
:06:28. > :06:37.the next 30 years. Up gas -- Gazprom ape says profits should be
:06:37. > :06:42.the same as they receive in Europe. China is holding a hard bargain.
:06:42. > :06:50.There are complications over the routing of two pipelines. Russia
:06:50. > :06:56.wants to build from Siberia to China. A deal will eventually be
:06:56. > :07:00.signed however. Thank you. America's credit worthiness is at
:07:01. > :07:04.risk if the borrowing limit is not raised, that is the assessment of
:07:04. > :07:11.Ben Bernanke. He wants republican members of Congress to vote in
:07:11. > :07:14.favour of lifting the current level above its current limits to 14.3
:07:14. > :07:21.trillion dollars. The US could start defaulting on its obligations
:07:21. > :07:31.if it is not reached. Flights in Perth are being cancelled because
:07:31. > :07:36.
:07:36. > :07:40.of a volcano as flat in Chile. -- ash cloud. As you have been hearing,
:07:40. > :07:44.tens of thousands of angry protesters and a nationwide strike
:07:44. > :07:50.will form the backdrop as Greece's ruling party debates its austerity
:07:50. > :07:54.measures today. It is a far cry from the national consensus that
:07:54. > :08:00.the government wants. If it cannot pass a law it will not get billions
:08:00. > :08:07.of dollars in aid from the EU and IMF. We are joined by a professor
:08:07. > :08:17.of finance at London School of Economics. What are they debating
:08:17. > :08:22.in Parliament today? There are a whole package of measures - one of
:08:22. > :08:32.them includes a tax rise. It is a programme to take place over the
:08:32. > :08:39.next four years or so. Public utilities, such as electricity,
:08:39. > :08:45.water... Will be privatised. These protesters, there are many of them,
:08:45. > :08:50.what do they want to achieve today? A number of them are employees in
:08:50. > :08:56.the public sectors which are to be privatised. They will lose their
:08:56. > :09:00.privileges, high salaries and pensions. People are protesting
:09:00. > :09:08.because they are upset with the way the politicians have mismanaged the
:09:08. > :09:16.economy over the past decade. difficulty is, if massive change is
:09:16. > :09:22.not put in place in Greece is will default on its debt. For these
:09:22. > :09:30.protesters it is a no-win situation? Absolutely. Some will be
:09:30. > :09:37.losing by these changes. Some of it is general anger. It is not
:09:37. > :09:43.rational. The second bail-out is being discussed by EU leaders, they
:09:43. > :09:48.cannot agree on how to put them into place. Absolutely. How much
:09:48. > :09:55.should it be borne by the private sector and how much should be borne
:09:55. > :10:01.by the public sector? It has been quite costly so far. Thank you.
:10:01. > :10:04.This is a story we will keep you up-to-date on. The euro is under