Browse content similar to 16/07/2012. Check below for episodes and series from the same categories and more!
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trees and blocked roads. Now for the latest financial news. | :00:13. | :00:19. | |
Hello and a warm welcome to World Business Report. The headlines: | :00:19. | :00:24. | |
Were Barclays trade as told to lie about bank borrowing costs? An | :00:24. | :00:27. | |
executive faces tough questions from MPs today. | :00:27. | :00:32. | |
Could the UK economy experience an Indian summer? A leading think tank | :00:32. | :00:42. | |
:00:42. | :00:44. | ||
predicts a consumer-Leadburn is telecom equipment manufacturer are | :00:44. | :00:54. | |
:00:54. | :00:54. | ||
plunging following a profit warning and an investigation. | :00:54. | :01:02. | |
Good to have you with us. Other banks could face fines more than a | :01:02. | :01:05. | |
$450 million Barclays received over the interest-rate fixing scandal. | :01:05. | :01:10. | |
That's the warning from the bank in a memo from employees. Meanwhile, a | :01:10. | :01:13. | |
former top executive at Barclays will today be grilled on his role | :01:13. | :01:20. | |
in trying to manipulate the rate that banks used to borrow money | :01:20. | :01:26. | |
from each other. He has already resigned and is thought to have | :01:26. | :01:30. | |
talk trade has to lie about the Bank's borrowing costs. British MPs | :01:30. | :01:33. | |
will also hear evidence from Lord Turner, their head of the UK | :01:33. | :01:38. | |
financial regulator. It's becoming another long | :01:38. | :01:42. | |
procession to confession in front of MPs. Two weeks ago came the | :01:42. | :01:47. | |
former boss of Barclays, Bob Diamond. He expressed shock that | :01:47. | :01:51. | |
his traders had been trying to manipulate lending rates. When I | :01:51. | :01:58. | |
read the e-mails I got physically ill. It's reprehensible behaviour. | :01:58. | :02:02. | |
Then came the Bank's chairman, who had to tell Bob Diamond that he | :02:02. | :02:10. | |
ought to go. You were handing him a loaded revolver, won't you? Today, | :02:10. | :02:14. | |
Lord Turner, the head of the Financial Services Authority, will | :02:14. | :02:18. | |
give evidence. He's already accused Barclays of aggressive behaviour. | :02:18. | :02:23. | |
As the regulator, he will face questions of his own. There is also | :02:23. | :02:27. | |
another former Barclays executive - why did he apparently misinterpret | :02:27. | :02:31. | |
a message from the Bank of England by telling trade is to | :02:31. | :02:35. | |
underestimate the Bank's borrowing costs? There are two versions of | :02:35. | :02:41. | |
events. The first is that, you know, he misinterpreted what was going on. | :02:41. | :02:49. | |
The second is that he twisted it. I think that his evidence will leave | :02:49. | :02:53. | |
the world and, indeed, the investigators, to try and make a | :02:53. | :02:56. | |
better judgement about which of those it was. Even after today, | :02:56. | :03:00. | |
many questions about this affair will remain unanswered. Though the | :03:00. | :03:04. | |
issue was raised four years ago, why has the problem taken so long | :03:04. | :03:08. | |
to tackle? How many other banks across Europe, the US and Japan | :03:08. | :03:18. | |
:03:18. | :03:21. | ||
have been doing the same thing? Can the reputation of banks ever now be | :03:21. | :03:24. | |
restored? It's not just lawmakers in Britain | :03:24. | :03:29. | |
who are concerned. He is a reminder of what's at stake. The committee | :03:29. | :03:33. | |
that sets the rate is made up of 16 international banks based in London. | :03:33. | :03:37. | |
They each submit a daily interest rate, which is what they are having | :03:37. | :03:42. | |
to pay in order to borrow cash from other banks. The four highest and | :03:42. | :03:47. | |
the four lowest submissions I then disregarded. To arrive at the day's | :03:47. | :03:51. | |
rate is based on the average of the remaining eight. It means that if | :03:51. | :03:55. | |
Barclays was acting alone it would have had very little ability to | :03:55. | :04:01. | |
influence the rate. Hence this is a global scandal that could involve | :04:01. | :04:06. | |
major US, Canadian, Japanese and European lenders that also make up | :04:06. | :04:16. | |
:04:16. | :04:23. | ||
the committee that sets these rates. Rate rigging is not the only | :04:23. | :04:28. | |
scandal to rock the world. From occupy Wall Street in St Paul's in | :04:28. | :04:32. | |
London and even Hong Kong, today, HSBC is launching legal action in | :04:32. | :04:37. | |
an attempt to remove anti-capital as protesters who have cared that | :04:37. | :04:47. | |
:04:47. | :04:54. | ||
at its Asian headquarters for the past nine months. -- camped out. | :04:54. | :04:58. | |
This is the entry to the headquarters of the HSBC in Hong | :04:58. | :05:06. | |
Kong. Activists have been here for nine months... It is fair to say | :05:07. | :05:09. | |
that the occupier movement has failed to gain as much traction in | :05:09. | :05:15. | |
Asia as the rest of the world. That is, in large part, because the 2000 | :05:15. | :05:17. | |
and make financial crisis claimed far fewer victims in this part of | :05:17. | :05:27. | |
the world. -- 2008. Here in Hong Kong, it has found support because | :05:27. | :05:32. | |
of rising property prices and income problems. Two problems some | :05:32. | :05:35. | |
people blame on the capitalist system. The court will decide who | :05:35. | :05:40. | |
owns this space. If the judge decides that HSBC owns this | :05:40. | :05:42. | |
passageway then the eviction process is expected to start very | :05:42. | :05:50. | |
shortly. Reporting from Hong Kong. | :05:50. | :06:00. | |
:06:00. | :06:02. | ||
That's... The temporary buffer of a 9% capital ratio should become | :06:02. | :06:06. | |
permanent. Because of the European crisis, banks need to be adding | :06:06. | :06:12. | |
cash to their reserves, some say. Banks have boosted capital by a | :06:12. | :06:16. | |
combined 94 billion euros. Credit-card companies Visa, | :06:16. | :06:22. | |
MasterCard and some major US banks will pay over 7 billion dollars in | :06:22. | :06:25. | |
a settlement that is considered the largest of its kind. The case has | :06:25. | :06:31. | |
been going on for seven years, over the firms colluding to fix the fees | :06:31. | :06:35. | |
that customers pay for credit and debit card payments. | :06:35. | :06:40. | |
The United Arab Emirates has began operating a key overland oil | :06:40. | :06:46. | |
passageway which bypasses the Strait of Hormuz. Iran has | :06:46. | :06:52. | |
threatened to close the straight at its mouth. It has a handling | :06:52. | :06:56. | |
capacity of 1.5 million barrels of crude per day. | :06:56. | :07:02. | |
Could this be a bit of good news? In their latest forecast, the | :07:02. | :07:10. | |
earnest and young think tank predict an Indian summer for a | :07:10. | :07:15. | |
Britain's economy towards the end of the year. Will this be enough to | :07:15. | :07:20. | |
pull the UK out of a double-dip recession? I am joined by the chief | :07:20. | :07:28. | |
economic and -- economic adviser from... | :07:28. | :07:30. | |
Why were we experience a better second half? A obviously it's not | :07:30. | :07:34. | |
just the weather that's been bad. We've been hit by all sorts of | :07:34. | :07:38. | |
economic conditions as well. Bad weather has also depressed spending | :07:38. | :07:42. | |
on the high street. As we move into the second half of the year, as you | :07:42. | :07:46. | |
have said, inflation will fall. That will mean that people's | :07:46. | :07:52. | |
spending power will go up for the first time in 2-3 years. We have | :07:52. | :07:54. | |
been looking at situations where spending power has been dropping. | :07:54. | :07:59. | |
What has pushed down the inflation? The most obviously, petrol prices. | :07:59. | :08:09. | |
The world oil price has fallen back to around $100. The fuel duty | :08:09. | :08:13. | |
increase has been delayed as well. Food prices, though, could be an | :08:13. | :08:19. | |
issue, couldn't they? We have been seeing on the market that corn and | :08:19. | :08:21. | |
soya bean prices are rising rapidly because of the terrible weather we | :08:21. | :08:24. | |
have had this summer perfecting the crops. | :08:24. | :08:27. | |
That is a worry, but it really is for later in the year. | :08:27. | :08:30. | |
What about the Olympics? What impact might they have? | :08:30. | :08:34. | |
That is also a boost in factor. When you have a situation like that | :08:34. | :08:38. | |
where people are spending, you're looking for a trigger. We think the | :08:38. | :08:41. | |
Olympics could be the starting gun for this consumer boom. | :08:41. | :08:45. | |
You talk about a consumer boom. Obviously we are in the midst of a | :08:46. | :08:49. | |
double-dip recession at the moment. Why do you think we will be so | :08:49. | :08:52. | |
willing to spend that money, given the fact that unemployment is very | :08:52. | :08:56. | |
high, there's a lot of concern about the future next year as well | :08:56. | :09:02. | |
- it's not looking so good. There's the eurozone, a dark cloud. | :09:02. | :09:06. | |
A lot of family simply don't have the cash - they can't actually | :09:06. | :09:11. | |
borrow. If they have the extra cash, they will spend it. A lot of other | :09:11. | :09:14. | |
families have been trying to cut back on debt. They have been doing | :09:14. | :09:24. | |
it successfully. The debt to income ratio has dropped from about 1.75 | :09:24. | :09:27. | |
to 1.5. The fundamentals are in place. | :09:27. | :09:32. | |
Let's just hope you are right. Nice to hear some positive news, | :09:32. | :09:35. | |
isn't it? Let's look at what's going on in | :09:35. | :09:39. | |
China, because they're second largest telecoms equipment maker is | :09:39. | :09:42. | |
warning their second half profits will be dropping by 80%. Let's go | :09:43. | :09:52. | |
:09:53. | :09:54. | ||
to Singapore with the details. What's going wrong? | :09:54. | :10:00. | |
First of all, you have stiff competition and the US | :10:00. | :10:03. | |
investigation into its sales. The firm said that tougher competition | :10:03. | :10:08. | |
in the mobile phone business has got the company's profit margin | :10:08. | :10:12. | |
falling. Also due to the European debt crisis, it has forced the | :10:13. | :10:17. | |
company to take a foreign exchange loss in the second half, compared | :10:17. | :10:25. | |
to one year earlier. There is also an FBI investigation over the sale | :10:25. | :10:30. | |
of bad US computer equipment and its alleged attempts to cover it up. | :10:30. | :10:33. | |
The probe will adversely affect the company's ability to bid for | :10:33. | :10:37. | |
overseas projects. Moving forward, that will impact its stock in the | :10:37. | :10:41. | |
Hong Kong stock exchange - it's down nearly 17%. | :10:41. | :10:45. | |
Thanks very much. Let's show you the markets as well | :10:45. | :10:50. | |
in Asia. Japan is closed today for a public holiday. The numbers you | :10:50. | :10:55. | |
will see on your screen, I hope, if you look at Japan - don't be fooled, | :10:55. | :10:59. | |
that was last week's close. The rest are open and trading. Beryl | :10:59. | :11:03. | |
headed higher, which is good news. Given a boost by various things -- | :11:03. | :11:12. | |
they are all... Wen Jiabao has been talking over the weekend while | :11:12. | :11:16. |