28/02/2013 World Business Report

headlines from BBC World News. Now for the latest financial news, here

is World Business Report. Banker's bonuses could be capped in Europe

for the first time in history, after a deal in Brussels. Payouts

would be limited to a year's salary unless shareholders approve more.

Austerity looms for India: the government is poised to unveil a

tough budget as growth stalls and markets pile on the pressure.

Welcome to World Business Report. Also in the programme: Japan's

Prime Minister nominates Haruhiko Kuroda to lead the Bank of Japan.

Bankers in the European Union could, for the first time, face a legal

cap on bonuses from next year following an agreement reached in

Brussels. The deal, negotiated by EU parliamentarians,

representatives of member governments and officials, is part

of a wider package of measures designed to prevent another banking

crisis. Under proposals bonuses would be capped at one year salary.

It may be raised if shareholders approve. But bonuses have been

blamed for reckless behaviour producing the financial crisis.

They have been politically toxic as taxpayers foot the bill for

collapsed banks. The measure, which has to be approved by a majority of

states, is seen as a defeat for Britain, home to the biggest

financial sector. Bankers in London say the cap may drive business to

other countries outside Delhi you. We go live to London. Joe Rundle is

Head of Trading at ETX Capital in the City of London. These may be

very strict rules, the strictest in the world? It's an aggressive move.

It will ultimately backfire. It will have knock-on effects such as

driving up salaries to get around this bonus renumeration problem,

the fixed cost to debate will be higher and many businesses without

the EU will simply leave and base itself elsewhere. It's probably not

the best thing for the financial sector and the taxpayers and tax

generated by the banks in the EU. Will it cause a drive outside the

EU, in previous years when other rules and regulations came into

effect there is talk about going to Switzerland but it never happened.

a long-term change of policy and carry on this anti-competitive

measures, it will cause banks investing in the future not to

choose there you because of this uncertainty. They will have to pay

more in fixed salaries and that will not fix well with the boards

of the banks. Given what we found out about 2008 and that crisis, and

details emerging since the manipulation of interest rates,

it's understandable that Brussels and the regulators think something

needs to be done and action needs to be taken. Absolute Lee, I can

see why they took this action but on not sure it's the correct action.

They're trying to avoid another bail-out of these banks. That's

partly due to capital within the banks. They have regulations within

this about the tax and the pay rate. This is probably not the best way

to stop the banks from doing this it will just drive people away from

this be you and their control. a big day for the man in the middle

here. India's finance minister will unveil the country's budget for

2013 in around an hours time. It wasn't so long ago that India was

talking about one day overtaking China as the world's top economy.

Now its growth rate has stalled to its weakest in a decade. The

financial markets are wanting more austerity. This talk about cutting

the investment rate. The Government has a difficult balancing act.

Putting the final touches on the Budget. The finance minister has a

tough job. With the economy going through its slowest growth in a

decade, getting to grips with the finances is not easy. While Indian

economy calls for austerity, there will be nationwide elections next

year and there's a temptation for the Government to announce a

popular measure to please the voters. Many feel that the finance

minister will present the Budget with one eye on the electorate and

another on the ratings agencies threatening to downgrade. The

industrial output has been steadily declining. Industries like this one,

and a factory electronics, says that while demand is still there

its poor investment and instructor holding them back. It must be

simpler and take less time. Usually from the time it takes is about

four weeks. Investments are being wasted. It does not help the

customer or the company. Every time it try cost as a straight border,

they have to pay more taxes. Many hope the Government will Palladium

road map to implement a goods and services tax. Others say improving

tax collection is the way. Historically in India we see that

people paying taxes is very little. Many people get out of the tax. If

we can find a way to catch them, that in my mind is the best way to

collect tax. Expenditure is likely to be cut which will make him room

for spending on better security. Also it's cheaper food for the

poorer and disposing cash directly to recipients under a direct

benefits transferred scheme. Japan's government has nominated

Asian Development Bank President Haruhiko Kuroda to head the

country's central bank. The nomination was widely expected.

Let's go straight to Ali Moore in our Singapore business bureau to

find out what it might mean. We knew this was coming but it was

about the decision today. Indeed, its confirmation of the widely-

expected move with the Japanese government so keen to try to get

the economy moving after stagnation. Haruhiko Kuroda is a supporter of

the aggressive monetary easing that has championed by the Prime

Minister. His appointment needs to be approved by both houses of the

parliament. If Shinzo Abe does not control the House he will need

support of the opposition. He will be joined by two new deputies. They

also support stimulus. He's a great critic of the Central Bank. Also

Shinzo Abe hinted that a government may change the law guaranteeing the

Central Bank's independence it did not ease the monetary policy. He

has stepped back from that later but the bank of Japan is central to

the economy. After today's appointment, the Government and the

Central Bank will now be working The battle to secure the survival

of Spanish airline Iberia will dominate results from its owner,

International Consolidated Airlines Group, later today. Iberia merged

with British Airways in 2011 to form the group, which has been

battling Spanish unions to try and cut costs and slash thousands of

jobs in the face of mounting losses. It is expected to announce an

operating loss of 120 million euros, compared with profits of 485

The Royal Bank of Scotland has been hit by huge pay-outs by the rate-