16/01/2013 World Business Report


16/01/2013

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Those are the latest headlines from BBC World News.

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Now for the latest financial news Hello and welcome to World Business

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Report. A nightmare for the Dreamliner. Two

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Japanese airlines ground their entire fleets of Boeing 787s after

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another incident forces an emergency landing.

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And how to police the credit rating agencies - EU lawmakers will vote

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today. Japan's All Nippon Airways has

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ordered the grounding of all 17 of its Boeing 787 Dreamliner aircraft

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after one was forced to make an emergency landing and evacuation in

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western Japan this morning. The landing came after smoke reportedly

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appeared in the aircraft's cockpit. The incident is the 6th to affect a

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787 in the last two weeks raising serious concerns about the safety

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of the new high tech aircraft. And a short while ago, Japan Airlines

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also grounded its seven Dreamliners. Plane-maker Boeing quickly released

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a statement saying, "Boeing is aware of the diversion of a 787

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operated by ANA to Takamatsu in Western Japan. We will be working

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with our customer and the appropriate regulatory agencies."

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On Friday US regulators announced an in-depth safety review of the

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787 which was followed on Monday by the announcement of a probe in

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Japan. Boeing currently have orders for around 800 Dreamliners yet to

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be delivered. This has been an ongoing saga.

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Today's and then stepped up a gear up. Boeing and the airlines in

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Japan have got to get this sorted out quickly. They do. This is the

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most serious incident so far. What appears to have happened, the

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latest information we have is that what happened is that the pilots

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noticed the smoke detector in an internal compartments in the

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aircraft had gone off. It appears that it was the compartment which

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contains the auxiliary power batteries. This looks like a

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similar incident to the one that happened in the west. When the

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Japan Airlines Dreamliner last week, there is a problem with the

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batteries. This was in flight. Smoke inside an aircraft in flight

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is always a very serious event. That is why, we saw today that all

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Nippon and Japan Airlines have both said that they would ground their

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fleets until this go problem above all others would be sorted out.

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are looking at amateur footage of their events from today. This has

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Broadcasters all of the world have this. It is bad for the reputation.

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It is very common is it not, for a brand new aircraft to have teething

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troubles. It is. I insure that in the morning, when the bosses of

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bowling wake up in Chicago, they will see these pictures and their

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hearts will sink. This is the news that they did not want this week

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after five separate incidents with the plane last week and now this

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more serious one. Experts do say that most of these incidents, many

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of the ones last week included a fuel leak and a broken windscreen

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and a glitch with the computers on the breaks of one aircraft, is all

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normal teething problems that you would expect with any new aircraft

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being introduced into the market. On the other hand, this battery

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problem, the fire that last week and these incidents today, this is

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different. This is new technology that has never been on board an

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aircraft before. The FAA in the US, as far back as 2007, said publicly

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that they were worried about these kinds of batteries being used on

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this board these aircraft because of the fire risk. We are now seen

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the results of that date. There was a correspondent in Tokyo. We will

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keep an eye on a story in World Business Report.

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New EU rules to try and make credit rating agencies fairer and more

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accountable go to the vote in the European Parliament in Strasbourg

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today. It's the job of commercial agencies such as Standard & Poor's,

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Moody's, and Fitch to assess if companies and sovereign states are

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likely to repay their debts on time. In Europe, the agencies have been

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repeatedly criticised for failing to warn about the debt crisis and

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for endorsing financial products that were later found to be part of

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the trouble. They slashed the credit rating of

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Cyprus. Ireland says its latest trading is depressingly low.

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Ireland -- France is living with a downgrade and Britain also risks

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losing the triple-A status. Sovereign downgrades affect the

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credibility of entire states. The EU insists that it is not on the

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verge of muzzling the industry. They will have to be more

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transparent. Regarding methodologies but that they used to

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assess the economic and financial situations of every country.

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timing of a big agency downgrades is being tackled. Agencies will

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have to justify their positions more fully. Investors get leave to

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claim that civil damages for ill- founded reports. They could be

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curbs on conflicts of interest. Often they were very being rated is

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also paying for their rating. Analysts say that this set up which

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enclose the industry into a potentially dangerous game. Right

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now, everyone is trying to get back in the market. Every sovereign,

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Ireland, Spain there or tried to issue debt. They are trying to get

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free and clear of official support. This is understandable. That may,

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with his regulatory pressure and the continuing system where they

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pay for the rating, is pushed the rating agencies have to really make

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an upgrade to the rating before time. In much the same way that

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they were signing ratings that were too high to begin with. They may

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jump the gun and give us ratings that either the all clear signal

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before everything is really fixed. Brussels wants financial firms to

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be less reliant on the rating agencies and carry out more of

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their own assessments. But the dream was of a home-grown,

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independent rating agency for Europe. That doesn't seem to be

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viable. The idea is now quietly dropped. Studies of bond market

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behaviour says that the big freeze has always been taken with a pinch

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of salt when a return is to be made. The recommendations of agencies are

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useful but felt -- bubble. -- fallible.

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We'll get a better picture of the state of America's banks this week,

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with five of the country's biggest revealing how much money they are

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making. After a difficult few years for banks, many expect the worst to

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be over. But is it? For America's big banks, 2012 was

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dominated by two he issues. The fiscal cliff debate and the

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uncertainty that that brought but also the legacy of the housing

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crash. Many of the bigger banks paid out of compensation and heavy

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settlements to clear up what many customers accused of mis-selling

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mortgages or unfairly repossessing homes. Is the worst now over? What

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does 2013 have in store? We have a direct the here. Is it fair to say

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that the worst is now over? It does look like it. It seems as though

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banks have adapted to the new regulation that we have seen since

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2008 and 2009. Last year, we could say that the housing sector was one

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of the best-performing sectors. One of the hurdles for earnings is that

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they may be priced for perfection. If you look right around the world,

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there are still big clubs on the horizon. There is a slowdown in

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China. There is uncertainty in Europe. Amateurs that back into

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figures? Absolutely. The global economy has a symbiotic

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relationship. Chinese exports and a demand globally will have an impact

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and US banks. On the home front, we have got past the fiscal cliff. The

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next hurdle is the debt ceiling. That can have an impact. We are

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already seen it fixed ratings coming out and threatening to lower

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the US's triple A rating. If that occurs and the worst case an up

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side does occur and we going to default as a result of not raising

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the debt ceiling, interest rates will be certainly impacted and

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bigger banks going forward as well. That will be weighing on the minds

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of investors and the banks themselves. This week, we will get

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figures from JP Morgan and Goldman Sachs and the Bank of America. They

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will look very closely at events right around the world but also

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here in the US. Particularly, the housing market. Their fortunes are

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intrinsically linked to the banks. He has a busy week ahead. Will keep

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you up-to-date. These are the markets in Asia. Some

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