:00:02. > :00:12.headlines from BBC World News. Now for the latest financial news, here
:00:12. > :00:19.
:00:19. > :00:22.is World Business Report. Banker's bonuses could be capped in Europe
:00:22. > :00:27.for the first time in history, after a deal in Brussels. Payouts
:00:27. > :00:33.would be limited to a year's salary unless shareholders approve more.
:00:33. > :00:43.Austerity looms for India: the government is poised to unveil a
:00:43. > :00:44.
:00:44. > :00:51.tough budget as growth stalls and markets pile on the pressure.
:00:51. > :00:57.Welcome to World Business Report. Also in the programme: Japan's
:00:57. > :01:00.Prime Minister nominates Haruhiko Kuroda to lead the Bank of Japan.
:01:00. > :01:03.Bankers in the European Union could, for the first time, face a legal
:01:03. > :01:05.cap on bonuses from next year following an agreement reached in
:01:05. > :01:07.Brussels. The deal, negotiated by EU parliamentarians,
:01:07. > :01:10.representatives of member governments and officials, is part
:01:10. > :01:20.of a wider package of measures designed to prevent another banking
:01:20. > :01:24.
:01:24. > :01:30.crisis. Under proposals bonuses would be capped at one year salary.
:01:30. > :01:35.It may be raised if shareholders approve. But bonuses have been
:01:35. > :01:39.blamed for reckless behaviour producing the financial crisis.
:01:39. > :01:44.They have been politically toxic as taxpayers foot the bill for
:01:44. > :01:48.collapsed banks. The measure, which has to be approved by a majority of
:01:48. > :01:54.states, is seen as a defeat for Britain, home to the biggest
:01:54. > :02:00.financial sector. Bankers in London say the cap may drive business to
:02:00. > :02:07.other countries outside Delhi you. We go live to London. Joe Rundle is
:02:07. > :02:13.Head of Trading at ETX Capital in the City of London. These may be
:02:13. > :02:20.very strict rules, the strictest in the world? It's an aggressive move.
:02:20. > :02:26.It will ultimately backfire. It will have knock-on effects such as
:02:26. > :02:33.driving up salaries to get around this bonus renumeration problem,
:02:33. > :02:38.the fixed cost to debate will be higher and many businesses without
:02:38. > :02:43.the EU will simply leave and base itself elsewhere. It's probably not
:02:43. > :02:49.the best thing for the financial sector and the taxpayers and tax
:02:49. > :02:54.generated by the banks in the EU. Will it cause a drive outside the
:02:54. > :02:59.EU, in previous years when other rules and regulations came into
:02:59. > :03:09.effect there is talk about going to Switzerland but it never happened.
:03:09. > :03:10.
:03:10. > :03:16.a long-term change of policy and carry on this anti-competitive
:03:16. > :03:20.measures, it will cause banks investing in the future not to
:03:20. > :03:24.choose there you because of this uncertainty. They will have to pay
:03:24. > :03:31.more in fixed salaries and that will not fix well with the boards
:03:31. > :03:36.of the banks. Given what we found out about 2008 and that crisis, and
:03:36. > :03:40.details emerging since the manipulation of interest rates,
:03:40. > :03:45.it's understandable that Brussels and the regulators think something
:03:45. > :03:50.needs to be done and action needs to be taken. Absolute Lee, I can
:03:50. > :03:57.see why they took this action but on not sure it's the correct action.
:03:57. > :04:01.They're trying to avoid another bail-out of these banks. That's
:04:01. > :04:08.partly due to capital within the banks. They have regulations within
:04:08. > :04:13.this about the tax and the pay rate. This is probably not the best way
:04:13. > :04:20.to stop the banks from doing this it will just drive people away from
:04:20. > :04:23.this be you and their control. a big day for the man in the middle
:04:23. > :04:26.here. India's finance minister will unveil the country's budget for
:04:26. > :04:29.2013 in around an hours time. It wasn't so long ago that India was
:04:29. > :04:39.talking about one day overtaking China as the world's top economy.
:04:39. > :04:44.Now its growth rate has stalled to its weakest in a decade. The
:04:45. > :04:53.financial markets are wanting more austerity. This talk about cutting
:04:53. > :04:59.the investment rate. The Government has a difficult balancing act.
:04:59. > :05:05.Putting the final touches on the Budget. The finance minister has a
:05:05. > :05:13.tough job. With the economy going through its slowest growth in a
:05:13. > :05:17.decade, getting to grips with the finances is not easy. While Indian
:05:17. > :05:20.economy calls for austerity, there will be nationwide elections next
:05:20. > :05:26.year and there's a temptation for the Government to announce a
:05:26. > :05:30.popular measure to please the voters. Many feel that the finance
:05:30. > :05:35.minister will present the Budget with one eye on the electorate and
:05:35. > :05:41.another on the ratings agencies threatening to downgrade. The
:05:41. > :05:46.industrial output has been steadily declining. Industries like this one,
:05:46. > :05:52.and a factory electronics, says that while demand is still there
:05:52. > :05:58.its poor investment and instructor holding them back. It must be
:05:58. > :06:06.simpler and take less time. Usually from the time it takes is about
:06:06. > :06:12.four weeks. Investments are being wasted. It does not help the
:06:12. > :06:18.customer or the company. Every time it try cost as a straight border,
:06:18. > :06:24.they have to pay more taxes. Many hope the Government will Palladium
:06:24. > :06:31.road map to implement a goods and services tax. Others say improving
:06:31. > :06:36.tax collection is the way. Historically in India we see that
:06:36. > :06:43.people paying taxes is very little. Many people get out of the tax. If
:06:43. > :06:50.we can find a way to catch them, that in my mind is the best way to
:06:50. > :06:57.collect tax. Expenditure is likely to be cut which will make him room
:06:57. > :07:06.for spending on better security. Also it's cheaper food for the
:07:06. > :07:12.poorer and disposing cash directly to recipients under a direct
:07:12. > :07:15.benefits transferred scheme. Japan's government has nominated
:07:15. > :07:20.Asian Development Bank President Haruhiko Kuroda to head the
:07:20. > :07:23.country's central bank. The nomination was widely expected.
:07:23. > :07:30.Let's go straight to Ali Moore in our Singapore business bureau to
:07:30. > :07:40.find out what it might mean. We knew this was coming but it was
:07:40. > :07:43.about the decision today. Indeed, its confirmation of the widely-
:07:43. > :07:48.expected move with the Japanese government so keen to try to get
:07:48. > :07:53.the economy moving after stagnation. Haruhiko Kuroda is a supporter of
:07:53. > :07:58.the aggressive monetary easing that has championed by the Prime
:07:58. > :08:03.Minister. His appointment needs to be approved by both houses of the
:08:03. > :08:10.parliament. If Shinzo Abe does not control the House he will need
:08:10. > :08:17.support of the opposition. He will be joined by two new deputies. They
:08:17. > :08:23.also support stimulus. He's a great critic of the Central Bank. Also
:08:23. > :08:28.Shinzo Abe hinted that a government may change the law guaranteeing the
:08:28. > :08:32.Central Bank's independence it did not ease the monetary policy. He
:08:32. > :08:37.has stepped back from that later but the bank of Japan is central to
:08:37. > :08:47.the economy. After today's appointment, the Government and the
:08:47. > :08:50.
:08:50. > :08:53.Central Bank will now be working The battle to secure the survival
:08:53. > :08:56.of Spanish airline Iberia will dominate results from its owner,
:08:56. > :08:59.International Consolidated Airlines Group, later today. Iberia merged
:08:59. > :09:02.with British Airways in 2011 to form the group, which has been
:09:02. > :09:07.battling Spanish unions to try and cut costs and slash thousands of
:09:07. > :09:09.jobs in the face of mounting losses. It is expected to announce an
:09:09. > :09:19.operating loss of 120 million euros, compared with profits of 485
:09:19. > :09:34.
:09:34. > :09:44.The Royal Bank of Scotland has been hit by huge pay-outs by the rate-