:00:04. > :00:14.to write a new constitution. Those are the latest headlines.
:00:14. > :00:17.
:00:17. > :00:23.Now it is time for World Business Report.
:00:23. > :00:27.The headlines: Global regulators had given banks four more years and
:00:27. > :00:31.greater flexibility to build up cash office in an attempt to make
:00:31. > :00:35.them less vulnerable towards future financial shocks.
:00:35. > :00:44.The death of the Megastore. Virgin France is expected to declare
:00:45. > :00:48.itself insolvent today, putting 1,000 store workers' jobs at risk.
:00:48. > :00:51.Google's chairman is set to visit North Korea. He is reportedly
:00:52. > :01:01.interested in the reclusive country's economic issues and its
:01:02. > :01:05.
:01:05. > :01:08.use of social media. For the first time, the world's
:01:08. > :01:12.most powerful economies have reached agreement on rules that
:01:12. > :01:19.will force banks to hold minimum quantities of cash and assets that
:01:19. > :01:24.can be sold in an emergency. In 2015, it will be phased in, and it
:01:24. > :01:30.will take full effect four years later. The agreement by the body
:01:30. > :01:40.that oversees the basil Commission on Banking Commission is to prevent
:01:40. > :01:40.
:01:40. > :01:46.financial shocks. To talk us through how they work, and what is
:01:46. > :01:55.at stake, I am joined by European economist.
:01:55. > :02:01.Tell us about the roles. What have they actually agree it?
:02:01. > :02:05.Across a whole range of Spectrum's, including capital, trying to limit
:02:06. > :02:13.the ability for banks to have the same kind of crisis as before. The
:02:13. > :02:17.agreement covers one part of that regime, the idea is that banks will
:02:17. > :02:24.be forced to hold sufficient reserves to be able to survive 30
:02:24. > :02:28.days in the event of a funding crisis. They have got 30 days to
:02:28. > :02:33.survive on their own. The issue, what the banks have been arguing
:02:33. > :02:37.about, as what can count as the reserves. They have to be very high
:02:37. > :02:42.quality, liquid assets that you can sell in a hurry. What has been
:02:42. > :02:47.agreed last night is two things. They have broadened out the
:02:47. > :02:51.category of assets that count as reserves. They will be able to use
:02:51. > :02:57.equities, which is new, and more significantly, they have been given
:02:57. > :03:03.a longer time to get to the point where they can meet the targets.
:03:03. > :03:10.That was stretched to an additional four years, on top of the previous
:03:10. > :03:17.stated date of 2015. This is quite a watered down dale, better for the
:03:17. > :03:23.banks. It is a pragmatic deal. The reality is that to a certain extent,
:03:23. > :03:29.a lot of what has been happening smacks of after the horse has
:03:29. > :03:33.bolted. We are in an environment of banks, far from being in a position
:03:33. > :03:38.to cause the next financial crisis by excessive lending, the problems
:03:38. > :03:43.are potentially on the other side. We have to give them a chance to
:03:43. > :03:47.heal, sort out the funding, and get sufficient liquidity. It is
:03:47. > :03:52.interesting you should say that. In some cases, banks are holding more
:03:52. > :03:57.in terms of reserves, and these rules state that they need to. They
:03:57. > :04:00.have gone the extra mile or ready. Many argued that the situation
:04:00. > :04:07.means there are economies that are not growing as fast, because banks
:04:07. > :04:13.are not lending. They are being a bit too cautious. That is the
:04:13. > :04:18.concern. In many ways, the market is providing the discipline rather
:04:18. > :04:23.than the regulators. You have to demonstrate that you have got
:04:23. > :04:32.sufficient access as a bank. If you do not, you struggle in the market
:04:32. > :04:36.place to maintain the assurance of bonds. The market is imposing its
:04:36. > :04:41.own discipline. We had been through an environment that is finally
:04:41. > :04:45.beginning to ease, but in the last two years, banks have really
:04:45. > :04:50.struggle to maintain access to wholesale markets, and that has
:04:50. > :04:54.constrained of their business. feel that this agreement reached
:04:54. > :04:58.last night draws a line under the crisis that we have had in terms of
:04:58. > :05:04.where banks are at and the future for them, in a position where we
:05:04. > :05:09.had to bail them out again? This is part of the framework. It is going
:05:09. > :05:14.to be put in place. The proof will be in the eating in the years to
:05:14. > :05:24.come. It will still be beholden on the regulators to make sure that we
:05:24. > :05:24.
:05:24. > :05:30.do not that the assets grow as rapidly as we saw in the past.
:05:30. > :05:35.The company that owns the Virgin Megastore chain in France is
:05:35. > :05:39.expected to declare beat business insolvent. It is no longer
:05:39. > :05:44.affiliated with Richard Branson's Virgin Group. It has 25 stores in
:05:44. > :05:49.France that are in danger of closure. It is not difficult to
:05:49. > :05:54.guess the reason, falling music and DVD sales.
:05:54. > :06:00.Just over a week ago, Virgin employees went Arc -- went out on
:06:00. > :06:04.strike in a final attempt to keep the stores open, but unless a
:06:04. > :06:10.surprise by air steps in, the stores are likely to close.
:06:10. > :06:15.TRANSLATION: This is very sad. This is not nothing. It is a symbol and
:06:15. > :06:20.a symbol that may disappear. It is a nice store. What will happen to
:06:20. > :06:25.us? What are we going to do. Virgin's main rival has had
:06:25. > :06:31.similar difficulties. It has a relay of 500 staff and sold its
:06:31. > :06:36.shops in Italy. In the UK, 8 Mb it warned of 12 critical days over
:06:36. > :06:41.Christmas if it was to survive. One major survey says that sales of
:06:41. > :06:46.physical CDs and DVDs fell by more than 17%. Shoppers chose to
:06:46. > :06:50.download tracks and films from the internet. It is even harder for
:06:50. > :06:56.music shops to make money when rents are high, as in the centre of
:06:56. > :07:01.Paris. TRANSLATION: I think we were victims this Best -- several of
:07:01. > :07:06.speculations. The real-estate speculation, but this is for the
:07:06. > :07:11.entire chain, so it also concerns stores and all city centres. In the
:07:11. > :07:16.last four years, they had amassed debts of 22 million euros, sure
:07:16. > :07:26.enough to put off any potential buyer. Among those now rumoured to
:07:26. > :07:28.
:07:28. > :07:31.be interested, Apple, or Marks & Spencer.
:07:31. > :07:40.Google's executive chairman is making a surprise visit to North
:07:40. > :07:48.Korea. This is a very intriguing trip.
:07:48. > :07:53.Tell us more. He has not issued a statement about what he plans to do
:07:53. > :07:57.in North Korea. We did contact Google's office in Singapore but
:07:57. > :08:02.they gave no comment. We only know that he is currently in Beijing and
:08:02. > :08:08.is scheduled to leave for North Korea, which is considered to have
:08:08. > :08:12.the world's most restrictive internet policies. A part of his
:08:12. > :08:16.delegation led by a former New Mexico governor, it is the first
:08:16. > :08:21.trip by an executive from the Californian based internet search
:08:21. > :08:28.provider to North Korea. He said that Eric Schmidt is going as a
:08:28. > :08:33.private citizen. This is not a Google trip. He is interested in
:08:33. > :08:38.North Korea's economic issues and its use of social media. The former
:08:38. > :08:45.governor also said the delegation plans to inquire about a career in
:08:45. > :08:49.American US citizen who is detained over there. The whole trip comes
:08:49. > :08:53.despite public resistance from the US State Department, which has said
:08:53. > :09:02.that the visit was ill-timed in light attention stemming from North
:09:02. > :09:06.Korea's recent rocket launch. -- in light of tension.
:09:06. > :09:11.Music company Sony and BMG teamed up to make a joint bid for
:09:11. > :09:18.Parlophone and other EMI labels now owned by Universal Music. Universal
:09:18. > :09:23.is owned by France's and the Vendee, and it brought EMI, and regulators
:09:23. > :09:29.forced it to sell off two-thirds of the company to save competition. If
:09:29. > :09:35.the bid is successful, they were there split the assets.
:09:35. > :09:41.-- will split. Samsung an allergy were fined in
:09:41. > :09:46.China for fixing the prices of LCD screens. -- and algae. They were