:00:06. > :00:16.105 years. Now for the latest financial news with Juliette Foster
:00:16. > :00:18.
:00:18. > :00:22.and World Business Report. The headlines: Bailing out the banks,
:00:23. > :00:28.new plans from Europe to shift the burden from the taxpayer to the
:00:28. > :00:32.bond holder. And the European Central Bank is expected to leave
:00:33. > :00:40.rates unchanged today as it steps up the pressure on politicians to
:00:40. > :00:50.sort out the debt crisis. Australia posts surprisingly strong growth
:00:50. > :00:54.
:00:54. > :01:01.figures thanks to the mining sector. The European Commission will
:01:01. > :01:05.featanage stop the collapse of individual
:01:05. > :01:09.banks from causing chaos throughout the rest of the European financial
:01:09. > :01:14.system. Until now, national governments had used taxpayers'
:01:14. > :01:18.money to bailout banks, but the commission is expected to suggest
:01:18. > :01:28.the damage on the banking collapses limited to another group of people,
:01:28. > :01:33.
:01:33. > :01:40.Bank bond holders. Unsurprising we governments pumped public money
:01:40. > :01:43.into domestic banks to protect the assets of depositors. The European
:01:43. > :01:47.Commission wants an elected -- to lead banks fail in future without
:01:47. > :01:51.troubling t troubling ter. The planners for Bank bond holders to
:01:51. > :01:54.take more of the pain. Financial institutions and places like the
:01:54. > :01:58.city of London are prepared to buy billions of dollars worth of bank
:01:58. > :02:04.bonds every year at lower rates because they know that at the bank
:02:04. > :02:07.goes bust, they will get their money from the depositors. But the
:02:07. > :02:12.European Commission wants to switch their round so depositors come
:02:12. > :02:16.first in the two. The advantage of this is, at a bank collapses, the
:02:16. > :02:22.pain is limited to a few unfortunate financial funds, rather
:02:22. > :02:28.than millions of members of the public. The disadvantages is that
:02:28. > :02:31.fewer fund managers will want to buy back bombs at the current rates.
:02:31. > :02:37.Appetite towards Bank bonds has reduced because they come more
:02:37. > :02:47.risky. They also has the risk of, not only is the rate
:02:47. > :02:48.
:02:48. > :02:53.recharge going up, the access to funds are at fault. The commission
:02:53. > :02:58.is releasing its proposals at a critical junction of banks and
:02:58. > :03:01.bondholders. The Spanish bank needs $19 billion of emergency loans.
:03:01. > :03:06.There are doubts about the finance of the entire Spanish banking
:03:06. > :03:11.sector. We have a crisis of confidence in the banking sector in
:03:11. > :03:19.Spain. To threaten any investors or bond holders at this point is
:03:19. > :03:22.dangerous for the capital market. Bond traders have bought a hundred
:03:22. > :03:25.billion euros worth of bank bonds this year. With the new rules in
:03:25. > :03:30.force they will start asking for higher rates of return. The banks
:03:30. > :03:34.will have to pass on the high rates in loans to customers. The measures
:03:34. > :03:43.could make banking save before the public but they may also make it
:03:43. > :03:50.costlier. As the situation in Europe's banking industry
:03:50. > :03:53.deteriorates, policy makers meet to decide on interest rates. They are
:03:53. > :03:56.unlikely to do anything today as Mario Draghi feels the central bank
:03:56. > :04:01.has already during its fair share and that politicians need to do
:04:01. > :04:05.more. The press conference will be watched for signs of when action
:04:05. > :04:15.may come, after the Spanish admission that it has been shut out
:04:15. > :04:18.
:04:18. > :04:22.of borrowing from money markets. Let us be cut this point that the
:04:22. > :04:27.CBD is making, they are saying they had been standing the tab for too
:04:27. > :04:32.long. It is up to the politicians to do something. They have said
:04:32. > :04:38.this before. Why should we be this and this time? We need to see a
:04:38. > :04:45.combination of measures. They want to make sure they are not taxing in
:04:45. > :04:48.isolation and the measures are sustainable. If there is too much
:04:48. > :04:53.liquidity they will push up inflation rates. There is a degree
:04:54. > :04:58.of urgency now. There are problems and the banking sector and Spain in
:04:58. > :05:06.particular but more widely in banks in the eurozone. Action needs to be
:05:06. > :05:11.taken quickly. The CBD can take action very quickly. The problem is
:05:11. > :05:18.its agenda is to fight inflation. There is a subtle process of
:05:18. > :05:26.redefinition going on. They are the end of last resort. It is about
:05:26. > :05:32.fighting inflation and enduring financial stability. The CBD is in
:05:32. > :05:37.its role winner finds liquidity to banks. It may do more maybe not
:05:37. > :05:42.today, but in the future the situation may deteriorate. They
:05:42. > :05:47.need some kind of joined up banking system which Tyson to what the
:05:47. > :05:54.European Commission is proposing. What records can the CBD take
:05:54. > :05:58.without compromising its authority? They will one signals that policy
:05:58. > :06:05.makers can move towards structural reforms and closer banking fiscal
:06:05. > :06:12.union. These decisions will take time. And we do not have any time.
:06:12. > :06:18.The CBD is the only one that can act quickly. This I idea of having
:06:18. > :06:23.this a wind down funds, so it takes the onus off the taxpayer, we heard
:06:23. > :06:31.one reaction from the report that it was tantamount to bullying.
:06:31. > :06:36.could have the opposite effect of raising bond costs. It was all make
:06:36. > :06:40.it more expensive for banks to issue bonds. But the idea is to
:06:40. > :06:50.dissociate bangs from governments. This is one proposal, there are
:06:50. > :06:51.
:06:51. > :06:55.others on the table. Staying with the subject of banks, Germany's
:06:55. > :06:58.second-largest bank has had its credit rating cut by the ratings
:06:58. > :07:04.agency Moody's because of increased risks from the eurozone and
:07:04. > :07:09.concerns about the bank's ability to absorb them. Five other banks
:07:09. > :07:12.will also downgraded. Google says it will start sending warnings to
:07:12. > :07:17.use is that it believes have been targeted by state-sponsored side
:07:17. > :07:20.attacks. The firm says it will bring up a banner highlighting the
:07:21. > :07:25.danger when users are locked into the Google account. A link will
:07:25. > :07:29.provide suggestions for protecting the data. It would not reveal
:07:29. > :07:35.exactly what would trigger the alerts. An embarrassing launch of a
:07:35. > :07:39.new video chat service from the two founders of Maxstoke, a star-
:07:39. > :07:43.studded event to show of the technology was hit by technical
:07:43. > :07:47.glitches as the screens froze and the video chats between celebrities
:07:47. > :07:56.broke down. The entrepreneur has managed to get it working and
:07:56. > :08:00.insist it will make the Internet less boring. Some surprisingly
:08:00. > :08:10.strong growth figures from Australia. We're talking about
:08:10. > :08:11.
:08:11. > :08:19.growth figures. Take us through those numbers. What do they say?
:08:19. > :08:23.Quite an impressive set of numbers. The economy has expanded by 1.3% in
:08:23. > :08:28.the first three months of this year from the previous quarter. That is
:08:28. > :08:33.more than twice the pace analysts were forecasting. Compared to a
:08:34. > :08:40.year ago, the economy expanded by 4.3%, much stronger than what
:08:40. > :08:45.analysts were forecasting. The economy in the United States grew
:08:45. > :08:50.by 1.7% in the same measure while the EU economy has not grown. It
:08:50. > :08:54.goes to show that Australia's economy has been quite resilient
:08:54. > :08:58.despite the ongoing debt crisis in Europe and the talks about the
:08:58. > :09:04.slowdown with China. One analyst I spoke to said that even though they
:09:04. > :09:07.have seen some slowing demand for natural resources from China in the
:09:07. > :09:11.mining sector, they are still seeing a lot of foreign investors
:09:12. > :09:16.willing to invest in that sector, that has been the driving force of
:09:16. > :09:23.the growth for the first three months of this year. And the news
:09:23. > :09:27.the Australian dollar jumping significantly. Time now for a quick
:09:27. > :09:34.look at the financial markets in the Far East. The numbers speak for
:09:35. > :09:40.themselves. We have had a bit of a lift. People speak to American's