07/08/2012 World Business Report

nation. Those of the headlines. Now it is time for the latest financial

news. Hello and welcome to World Business

Report. A rogue institution - US regulators accused Standard

Chartered of a $250 billion laundering scheme with Iraq. It is

the latest scandal to engulf a British bank. I am Rico Hizon.

Standard Chartered's shares slumping to a near two year-low.

Serious allegations from a US regulator.

LA us GDP figures confirm the recession has deepened for Italy,

pursuing more pressure on Prime Minister Mario Monti.

British banking group Standard Chartered illegally schemed to

avoid sanctions with Iran for more than a decade, helping longer $250

billion through the US financial system, the accusation from a US

regulator, who are threatening to strip the Bank of its licence in

New York. It is the latest scandal to rock the British banking

industry. In a sane, Standard Chartered has strongly rejected the

facts alleged by the regulator and says it is conducting a review of

its US compliance. It also says it sees all of new business with

Iranian customers in any currency over five years ago. We will see

what this is doing to the share price in Asian trading in a moment

but first a report from New York. Standard Chartered does most of its

business in the emerging economies of Africa and Asia. Until now it

had stayed largely clear of the crisis and scandals that have

humbled so many other banks in recent times. Not any longer. US

authorities say Standard Chartered has helped Iran before it long-

standing American sanctions on a massive scale. In the last few

years these sections have been aimed at stopping Iran's suspected

nuclear weapons programme. In a statement, the New York banking

regulator said that in its evidence it has seen hundreds of millions of

dollars of fees and the bank has falsified records. It did this,

allegedly, to make so crucial information was omitted from

details of individual transactions involving a run. What comes across

is the size of these transactions. If it is proven it or so there was

an attempt to strip the information that banks often rely on to make

sure the transactions are complying with the US law. Regulators alleged

that Standard Chartered showed contempt for US banking regulations

and sight an internal e-mail sent from the head office in London,

In a statement, Standard Chartered strongly rejected the way you as

authorities portrayed the facts and said it had ceased all new business

with Iranian customers more than five years ago. In the past,

American regulators have accused a number of other European banks,

including HSBC and Credit-Suisse. Recently, the Dutch bank IMG,

agreed to pay a party of more than $600 million. The punishment for

Standard Chartered should be allegations be borne out could be

very heavy indeed. Let's see what is happening to the

shares of Standard Chartered in Asian trade. Rico Hizon is in our

Singaporean Office. Unsurprisingly, shares in the bank are sharply down

in Hong Kong trading? That is right. Standard Chartered's shares are

slumping to a near two-year low on the Stock Exchange and made these

allegations. The stock is between 6.5% and 7% at this hour. Analysts

have said that despite the statement rejecting allegations by

the New York regulator that this was a rogue institution, investors

are not buying that story and they are saying many questions are still

left unanswered. They said the investigation is just the tip of

the iceberg and the risk in the US unit may be stripped of its licence,

which could lead to a greater sell- off in the bank. Two birds of its

profits come from a show. HSBC is trading higher -- from Asia. As you

said, many questions are still unanswered. Thank you.

Moving on to other news. Italy is publishing preliminary GDP figures

later and they are expecting to show the country is moving further

into recession. Predictions are for the economy to have contracted more

than 0.5% on the previous quarter and 2.3% on the year. This puts

further pressure on Mario Monti who is trying to get the country's

finances under control. He believes the country can continue to finance

its three trillion dollar debt without an external bailout. We

spoke to an economics adviser. He joins me through Skype. Thank you

for being with us. Well Italy have to go for a full bailout. We heard

that Spain is considering it. As Italy moved its position as all?

Italy is now looking at the Spanish situation. The Government will

probably wait until September to see if Spain presses ahead with the

bailout. Italy wants to afford that route, as a matter of pride. -- to

avoid. So we will see what happens. We will probably have the answer in

September. It is indicated that Italy will try not to follow that

route. Many people of his they are wondering will Mario Monti be there

this time next year? For sure there are some doubts, especially now,

and there is a lot of discussion about the new laws but full of life

from the next elections next year. -- that will apply. There are many

questions as to whether they will apply once Mario Monti is out of

office. He is trying to bring financial stability and a balanced

budget next year. I think it will month

month to month. This year will be a year of stability but next year

hopefully will be a year of growth. Thank you.

While Europeans fret about economic slowdown, the largest hotel company

in the world has no such worries. Intercontinental is expected to

report underlying profits are up by 15% today. The company is the best

performing share on the FTSE 100 and it appears to have a good way

of making money. This is a view to die for, looking

straight out on the Olympic Park. The financial performance of the

company looks equally impressive, not just because of a record demand

for hotel rooms but because of its textbook approach to business. How

much money did it costs the company to open this has? Precisely nothing.

Because, like Coca-Cola and McDonald's, this is a franchise

operation. They put no money in and take no risk, simply charging a

percentage of the hotel's income. That model enables them to expand

quickly in countries where people are travelling more. Airlines are

forecasting growth and when you look at the bid the economies of

Brazil, Russia, India and China and China is very important to

intercontinental, there are many markets for them to move into.

hotel chain began 60 years ago this became car owners they wanted

something more modern to stay in than roadside hotels. It has made

innovation in hotel industry. It was the first to introduce

telephones and televisions in rooms and the first to allow children to

stay free. All of these innovations responded to a simple idea of

providing family focused hotel expenses. And they are promising to

serve up much more of the same in the years to come. Apparently it

has more than 1,000 hotels in the pipeline and that is likely to

leave it the best performing hotel chain in the world.

Now a quick flash of the markets. In Asia, Japanese stocks gained

from the second day. There is optimism Germany will support the