Browse content similar to 17/11/2011. Check below for episodes and series from the same categories and more!
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bail-out money. Those are the latest headlines from BBC World | :00:03. | :00:06. | |
News. Now the latest financial news with Sally and World Business | :00:06. | :00:16. | |
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Hello and a warm welcome, you're with World Business Report. These | :00:18. | :00:28. | |
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are the headlines: Contagion fears gripped Wall Streak. | :00:33. | :00:42. | |
UBS reveals its new strategy but will a shift away from investment | :00:42. | :00:52. | |
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banking win back the confidence of Another day another stark warning | :00:54. | :00:58. | |
about the wider impact the eurozone debt crisis will have on the global | :00:58. | :01:03. | |
economy. Shares sunk on Wall Street after ratings agency Fitch said | :01:03. | :01:07. | |
contagion could spread to the US. The report out late on Wednesday | :01:07. | :01:11. | |
warns that while US banks have manageable exposure to Europe, | :01:11. | :01:16. | |
further contagion poses a serious risk to the US banking sector. That | :01:16. | :01:21. | |
was enough to wipe 200 points off the Dow in the last minutes of | :01:21. | :01:29. | |
trade. Morgan Stanley shares plunged 9%. Fiction is concerned | :01:29. | :01:33. | |
about distressed European countries's were used hitting the | :01:33. | :01:40. | |
banking system. They are concerned it is the troubles that have hit | :01:40. | :01:44. | |
Ireland, Portugal, and Spain spread to more nations it could put in | :01:44. | :01:49. | |
jeopardy America's banking system and its exposure to the eurozone. | :01:49. | :01:55. | |
In total that could be 50 billion US dollars. At the moment they say | :01:55. | :01:59. | |
that the US banking system's exposure to Europe is fairly | :01:59. | :02:02. | |
manageable but they are worried about the into Connectivity of | :02:02. | :02:08. | |
large global banks. That only piles on the were news for banks | :02:08. | :02:12. | |
including City crew, Bank of America, even JP Morgan Chase and | :02:12. | :02:17. | |
Goldman Sachs. It was enough to see the Dow Jones plunge, before the | :02:17. | :02:22. | |
reported was down 36 points, afterwards it fell 190. They may | :02:22. | :02:26. | |
only be pointing out some of the eurozone concerns that many people | :02:26. | :02:36. | |
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are aware of. But their report The markets in Asia started their | :02:38. | :02:42. | |
days in a pretty dire way as you can imagine but things have calmed | :02:42. | :02:47. | |
down. We can go to recur in Singapore for the latest. It has | :02:47. | :02:52. | |
been a roller-coaster ride -- Rico. Indeed, roller coaster, very | :02:52. | :02:57. | |
volatile but so far in the early afternoon trading session regional | :02:57. | :03:01. | |
shares are still under pressure, led by the financial sector feeling | :03:02. | :03:06. | |
the heat and financial stocks in Hong Kong, Singapore, Japan, South | :03:06. | :03:16. | |
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Korea, currently weakest after the rise in industry. That is the level | :03:17. | :03:22. | |
that eventually forced Greece, Ireland and Portugal to seek bail- | :03:22. | :03:28. | |
out programs. Asian investors will be watching closely the France and | :03:28. | :03:36. | |
Spain bond auctions, and the results are keenly awaited. Overall | :03:36. | :03:40. | |
analysts here don't really fear Asian banks being greatly affected | :03:40. | :03:45. | |
compared to the US counterparts because exposure they say is not | :03:45. | :03:49. | |
significant and minimal. But what they fear is the contagion from the | :03:49. | :03:55. | |
eurozone debt crisis, which will pull the major economies into | :03:55. | :04:02. | |
recession and intern impact of Asia's exports to Europe. Close to | :04:02. | :04:04. | |
20% of the region's outgoing shipments are sold to the eurozone | :04:04. | :04:11. | |
and this could impact the economies of the Asia-Pacific region. Thanks, | :04:11. | :04:17. | |
Rico. We can speak to David Buick, or some more analysis. This news | :04:17. | :04:22. | |
coming out just before the end of the day from Wall Street -- for | :04:22. | :04:27. | |
some more analysis. It does not take much now, everybody's very | :04:27. | :04:33. | |
neurotic. Things have fallen to a derisory new low. The markets move | :04:33. | :04:39. | |
very quickly. We have to cast our mind back to 2008 when the Treasury | :04:39. | :04:43. | |
Secretary said what many people thought was a logical, and he | :04:43. | :04:48. | |
pulled the plug on Leeman Brothers, which exacerbated the problems for | :04:48. | :04:51. | |
everybody because nobody knew how much money they might have lost | :04:51. | :04:55. | |
because it was not an orderly closure. You can never necessarily | :04:55. | :05:00. | |
organise something like this. But the problem with the euro debt | :05:00. | :05:04. | |
crisis is the inertia on a political basis. The worst option | :05:04. | :05:09. | |
is to do nothing and that is what they have chosen to. Is there a | :05:09. | :05:16. | |
real worry about the impact globally, because that is kind of | :05:16. | :05:21. | |
where Fitch is going. There is this underlying fear that they could be | :05:21. | :05:25. | |
another credit crunch. I think that's right. They have over- | :05:25. | :05:29. | |
reacted in the marketplace but as I said it does not take much. When | :05:29. | :05:33. | |
you look at the damage credit default swaps can do, it is not | :05:33. | :05:39. | |
just a piece of paper, the bond, that may have toxic losses on it. | :05:39. | :05:44. | |
It is the counter party that may have bought it because they have | :05:44. | :05:49. | |
problems and going down the line to them. It is like a pack of cards. | :05:49. | :05:53. | |
David, we will talk more to you when we look through the newspapers | :05:53. | :05:56. | |
in about ten minutes. But let's take a look at what is going on in | :05:56. | :06:00. | |
Italy where the new Prime Minister will be presenting his austerity | :06:00. | :06:04. | |
program to the Senate later today ahead of a confidence vote. On | :06:04. | :06:10. | |
Wednesday Mario Monti unveiled a Cabinet of technocrats, 18 he is | :06:10. | :06:14. | |
hoping will reassure investors and the Voges in Italy that he can get | :06:14. | :06:24. | |
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Italian debt under control -- the voters in Italy. -- a team. John, | :06:27. | :06:31. | |
what is actually happening there today? It does sound very | :06:31. | :06:34. | |
reminiscent of the last week or so when we have austerity measures | :06:35. | :06:40. | |
being discussed and a vote of confidence. Yes that's true. There | :06:40. | :06:46. | |
have been heavy discussions up to last week. This week we spent some | :06:46. | :06:50. | |
time... actually the government spends some time trying to get Mr | :06:50. | :06:55. | |
Monti re-elected and a whole series of meetings with members of the | :06:55. | :07:00. | |
various parties and members of different interest groups. So the | :07:00. | :07:05. | |
week has gone by, basically doing some kind of formal meetings and | :07:05. | :07:09. | |
ritualistic meetings, which is kind of hard for the markets to | :07:09. | :07:14. | |
understand. But these meetings will continue, today he should be sworn | :07:14. | :07:20. | |
in, and getting a confidence vote on one of the Chambers, next week | :07:20. | :07:24. | |
will be the other one. I understand the markets are kind of inflation | :07:24. | :07:30. | |
find how, they are waiting to see the measures being taken -- | :07:30. | :07:33. | |
impatient right now. Let's talk about those measures, sorry to | :07:33. | :07:37. | |
interrupt you because time is getting the better of us. When it | :07:37. | :07:40. | |
comes to the austerity measures, some of the big ones like sorting | :07:40. | :07:50. | |
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out bureaucracy, they are not going to be in these meetings. There is a | :07:56. | :08:00. | |
big concern and everybody in Italy is concerned about that. I have | :08:00. | :08:05. | |
been talking to some politicians and they tell me that they like | :08:05. | :08:13. | |
Monti, they like what Monti is doing, but the question is is he | :08:13. | :08:16. | |
going to go to the Chambers and discuss the measures that need to | :08:16. | :08:22. | |
be taken? Or is he going to take a fast approach? Is he going to | :08:22. | :08:26. | |
implement the changes that need to be made? It seems the politicians | :08:26. | :08:31. | |
think it will be the second thing he will do. Especially because it | :08:32. | :08:40. | |
will come down the markets. Fang Q4 joining us. I am sure Mario Monti | :08:41. | :08:44. | |
is looking forward to rolling up his sleeves cast thank you for | :08:44. | :08:51. | |
joining us. Let's look at a presentation of a new strategy that | :08:51. | :08:55. | |
will shake up a Swiss bank and caused vital change but will it | :08:55. | :09:00. | |
deliver? The new chief executive is under pressure to prove he has the | :09:00. | :09:04. | |
right formula as shareholders' patience is running thin. In recent | :09:04. | :09:09. | |
years UBS has suffered a series of setbacks, the most recent the | :09:09. | :09:14. | |
embarrassing and costly rogue trading scandal. UBS spend 150 | :09:14. | :09:24. | |
:09:24. | :09:25. | ||
years building its business but it has plans to become a big player. | :09:25. | :09:29. | |
Today the new chief executive will outline a future where activities | :09:29. | :09:35. | |
like trading commodities or currencies are scaled back. It was | :09:35. | :09:39. | |
really pummelled by its over extension into the housing market, | :09:39. | :09:44. | |
property market in the US. And now private banking is under a lot of | :09:44. | :09:48. | |
pressure. One has to ask what is left, it is going to abandon | :09:48. | :09:52. | |
investment banking. They have already announced plans to cut more | :09:52. | :09:57. | |
than 3,000 jobs, half of them at its investment banking arm. | :09:57. | :10:01. | |
Investment banking has to be the smart banking operation because | :10:01. | :10:09. | |
there is not enough business to sustain them if it is just | :10:09. | :10:14. | |
investment banking. Retail banking is still growing, lots of people | :10:14. | :10:18. | |
are getting rich even though many people are getting poor, and that | :10:18. | :10:23. | |
is what they have got to focus on. Switzerland has traditional banking | :10:23. | :10:33. | |
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secrecy took a dent two years ago - - Switzerland's. In September, UBS | :10:33. | :10:41. | |
and cover trading losses of $2.3 billion at its London operations -- | :10:41. | :10:46. | |
uncovered. There is no doubt the new CEO will have to restore its | :10:46. | :10:51. |