:00:03. > :00:13.A those are the latest headlines. It is now time for the latest
:00:13. > :00:25.
:00:25. > :00:30.The price of gold falls by 9%, the biggest one day drop into tears.
:00:30. > :00:38.And how much is too much? The European Parliament will vote on
:00:38. > :00:43.measures to curb bonuses in the banking business.
:00:43. > :00:48.Welcome. This is World Business Report. Also in the programme, they
:00:48. > :00:52.are among the world's biggest exporters. They are going head to
:00:52. > :00:59.head. South Korea unveils a stimulus programme in a bid to
:00:59. > :01:02.support its exporters, under pressure due to the weak Japanese
:01:02. > :01:08.yen. There has been a dramatic fall in
:01:08. > :01:17.the price of gold. It had a 9% drop, its biggest one day fall in more
:01:17. > :01:23.than 30 years. It left cold training at $131 per ounce. It is a
:01:23. > :01:29.pretty dramatic move. It has been on the decline since hitting a peak
:01:29. > :01:35.of around $1,800 per ounce last year. Last September it was at that
:01:35. > :01:45.level. It is reflecting a stronger outlook for the global economy,
:01:45. > :01:47.
:01:47. > :01:54.particularly the US. The price has shifted downwards. Tell us more
:01:54. > :02:00.about this big shift yesterday. It was really a big shift, as you
:02:00. > :02:09.mentioned earlier. A drop of more than $141. In Asian trading it is
:02:09. > :02:15.falling by another 2% to $1,327 per ounce. Why is the yellow metal
:02:15. > :02:21.continuing to fall? Growing worries over slowing growth in China, which
:02:22. > :02:26.came out with a 7.7% expansion in the first quarter of this year. You
:02:26. > :02:31.also have the US economy, which continues to impact investor
:02:31. > :02:35.sentiment. You also have a slowdown in inflation, combined with
:02:35. > :02:40.sentiment that the central bank is considering winding down its
:02:40. > :02:44.stimulus programme. Prompting investors to unload. There are
:02:44. > :02:50.reports that Cyprus may sell some of its gold reserves to pay off its
:02:50. > :02:56.debts following its bailout. Before the massive drop, the other metal
:02:56. > :03:03.had climbed every year since 2001. Investors purchased it as
:03:03. > :03:07.protection against inflation and as a safe haven. I spoke to an analyst
:03:07. > :03:17.earlier, and he expects the price of gold to continue to fall from
:03:17. > :03:18.
:03:18. > :03:24.current levels of $1,327. Other commodities are also falling.
:03:24. > :03:30.That is right. They are tracking the drop in gold prices. Other
:03:30. > :03:40.precious metals, such as silver, down by 12%. Palladium is dropping
:03:40. > :03:40.
:03:40. > :03:50.by 8%. Analysts say there on the verge of entering a bear market.
:03:50. > :03:53.
:03:53. > :04:00.20% lower from its high. Crude oil Asian trade. US crude is also
:04:00. > :04:08.falling to $86. Its weakest level since December of 2012. No sacred
:04:08. > :04:14.cows. All commodities are losing. Share markets are also falling
:04:14. > :04:18.today in Asia as well. We will look at the numbers later on. Time to
:04:18. > :04:23.look at the banking industry. Should it be able to pay its staff
:04:23. > :04:29.what it likes? Lawmakers will debate that question today and
:04:29. > :04:35.whether industry bonuses should be capped. Under new rules from 2014,
:04:35. > :04:40.bankers will not be able to get bonuses that exceeded their salary.
:04:40. > :04:47.But people in Britain are saying that it will be damaging to London
:04:47. > :04:53.and counter-productive. This man has worked in the City of
:04:53. > :04:57.London for over 15 years. A Harvard graduate and Goldman Sachs alumni,
:04:57. > :05:02.he is an A grade financier that cities have become used to
:05:02. > :05:11.attracting. In centre vised by a bonus that in its heyday meant
:05:11. > :05:18.rewards up to 13 times when salary. He is basic human psychology. You
:05:18. > :05:26.pay them a massive amount of cash. What are they going to do? Exactly
:05:26. > :05:30.what you incentive buys them to do. But no longer. Brussels hopes its
:05:30. > :05:36.new rules to limit bonuses will usher in a new age of moderation
:05:36. > :05:41.and risk aversion. Those inside the industry are sceptical. He is going
:05:42. > :05:48.to be bad news for London. It will lead to an imposition of higher
:05:48. > :05:54.fixed costs. Banks will be forced to put up higher base salaries. It
:05:54. > :06:00.is not as if compensation is going to go down. It is a global market.
:06:00. > :06:05.It will have an effect on how people are compensated. The City of
:06:05. > :06:09.London is Europe's largest financial centre. Thousands are
:06:09. > :06:14.employed and are getting used to live under the new rules passed by
:06:14. > :06:18.Brussels. What is unclear is how many of them will choose to stay
:06:18. > :06:24.here and how widely across the sector as a whole the new rules
:06:24. > :06:31.will reach. There will be further ways of this legislation that will
:06:31. > :06:36.affect other areas. Beyond that, what tends to happen in financial
:06:36. > :06:46.services sector day-to-day is reflected in other sectors in the
:06:46. > :06:48.
:06:48. > :06:55.future. While bonuses look set to leave the banks for a good, the
:06:55. > :06:58.implications is not even something the City's brightest can predict.
:06:58. > :07:02.Other business stories. South Korean businesses could be getting
:07:02. > :07:11.a boost. The government is planning a stimulus package worth more than
:07:11. > :07:19.cover a shortfall in tax revenue and help small and medium-sized
:07:19. > :07:22.firms. The South Korean economy will grow by 2.2% it is predicted
:07:22. > :07:27.this year. The shares and a Japanese bank
:07:27. > :07:37.plunged into to today. It is planning to buy a US phone company.
:07:37. > :07:38.
:07:39. > :07:48.bid from a US-based firm. They say that their bid is superior because
:07:49. > :07:49.
:07:49. > :07:52.it would allow synergy. Today the IMF, led by Christine
:07:52. > :07:58.Lagarde, will be bringing out its latest assessment of the state of
:07:58. > :08:02.the global economy. It is the starting point to a series of
:08:02. > :08:07.briefings that lead up to the IMF and Bank meetings that are this
:08:07. > :08:17.Christine stimulate growth in Europe's
:08:17. > :08:20.finding economies. -- flagging. In Washington, spring has arrived.
:08:20. > :08:28.But the mood on policy makers are tending International Monetary Fund
:08:28. > :08:35.and World Bank meetings is likely been slower to bloom in what the
:08:35. > :08:40.IMF describes as a three-speed recovery. Some emerging markets are
:08:40. > :08:45.doing well. Others, like the US, are on the mend. Europe and Japan
:08:45. > :08:49.are still in trouble. their economies but the Bank of
:08:49. > :08:57.Japan and other central banks have been described as the right step by
:08:57. > :09:02.the head of the IMF. A under the present circumstances, from our
:09:02. > :09:08.perspective it makes sense for monetary policy to do the heavy
:09:08. > :09:15.lifting in this recovery by remaining accommodating. A but she
:09:15. > :09:23.said that monetary policy alone was not the answer. Not enough had been
:09:23. > :09:32.done to repair the banking system. Monetary policy, which is inventive
:09:33. > :09:39.on the part of the ECB, is spending its wheels. Low interest rates,
:09:39. > :09:44.decided that European central bank level, are not affordable or
:09:44. > :09:50.conveyed to credit for the people, the enterprises that need it. The
:09:50. > :09:56.plumbing is clocked. The human cost of the weak recovery is reflected
:09:56. > :10:03.in the jobs market. Today, 200 million people were out of work
:10:03. > :10:11.around the world. The crisis has created a three-speed world in the
:10:11. > :10:16.eyes of the IMF. Its capacity as the global economic watchdog will
:10:16. > :10:20.require to tell its members about the danger of such uneven growth.
:10:20. > :10:26.It is quite interesting. Some of the stories that are likely to come
:10:26. > :10:33.out of that event in Washington at the end of the week, it is a World
:10:33. > :10:36.Bank meeting and also the G 20 gather. There is a lot of concern
:10:36. > :10:43.that Japan will be put into pressure to stop its measures that
:10:43. > :10:51.constantly weakening the yen. If we can get on to the Asian markets, we
:10:51. > :10:55.will. The yen has turned and against the dollar today. That is
:10:55. > :11:00.partly because of the events in Boston. It is seen as a bit of a
:11:00. > :11:04.safe haven. There has been a bit of strengthening on concern that Japan