:00:02. > :00:12.collapsed at seven o'clock local time.
:00:12. > :00:26.
:00:26. > :00:29.IMF buzz Christine Lagarde is back in court this Friday in a
:00:29. > :00:35.corruption inquiry that threatens to plunge the fund into another
:00:35. > :00:45.leadership crisis. Asian markets bounce back. Japan's
:00:45. > :00:48.
:00:48. > :00:51.Nikkei surges after Thursday's $300 billion to sell off.
:00:51. > :00:56.Welcome to World Business Report. In just a minute we will be looking
:00:57. > :01:02.to see how Asian markets are doing a day after the dramatic sell-off,
:01:02. > :01:07.but first the head of the IMF, Christine Lagarde, is back in court
:01:07. > :01:11.later today. On Thursday she faced 13 hours of questioning by a Paris
:01:11. > :01:15.magistrate over her role as French finance minister in a huge
:01:16. > :01:20.arbitration payment that was made to a supporter of the foreign --
:01:20. > :01:24.former President, Nicolas Sarkozy. Christine Lagarde says that she has
:01:24. > :01:29.done nothing wrong. The IMF says they continued to express
:01:29. > :01:34.confidence in her. We will find out whether she will be placed under
:01:34. > :01:39.formal investigation, a significant move under French law. She will be
:01:39. > :01:43.placed under trial if that happens. Voted one of the world's most
:01:43. > :01:50.powerful women by Forbes magazine, Christine Lagarde is now fighting
:01:50. > :01:58.to clear her name in this long run inquiry into corruption. The Cape's
:01:58. > :02:04.-- the case dates back to 1993. Bernard Tapie asked the state's
:02:04. > :02:12.Bank to set -- to sell his share. They made a fortune on the deal,
:02:12. > :02:20.Bernard Tapie did not. So he sued. It bounced back and forth in the
:02:21. > :02:28.highest courts of the land. And your 2007, when it a French
:02:28. > :02:32.President suggested that they move the case to arbitration. The result
:02:32. > :02:37.was a 280 million euros pay-out to Bernard Tapie, who had supported
:02:37. > :02:44.Nicolas Sarkozy's bid for presidency. Christine Lagarde
:02:44. > :02:49.denied that it was paid out for his political support. TRANSLATION:
:02:49. > :02:53.there is an investigation under way. I want questions clarified. I had
:02:53. > :02:58.every confidence in the procedure, not least because my cup conscience
:02:58. > :03:04.is perfectly clear. The DG anticipate the procedure would
:03:04. > :03:08.evolve, as it did. The police raid on her Paris apartment. As IMF
:03:08. > :03:12.Chief, she could have avoided the summons, pleading diplomatic
:03:12. > :03:18.immunity, but she has always insisted that she has nothing to
:03:18. > :03:23.hide. On Thursday she sat through a marathon session in front of a
:03:23. > :03:29.magistrate, for 13 hours. The former chief, Dominique Strauss-
:03:29. > :03:34.Kahn, was forced to step down over a sex assault scandal, his
:03:34. > :03:39.compatriot was there to restore its reputation. A number investigation
:03:39. > :03:45.is clearly unwelcome. This is not good for the IMF and this is not
:03:45. > :03:50.good for the European Union. Up to Dominique Strauss-Kahn's disgrace
:03:50. > :03:54.and resignation, they put in place a very high standard contract,
:03:54. > :03:57.which is the first to be published on the internet, and it sets out
:03:57. > :04:01.that the managing director and not only has to keep to the highest
:04:01. > :04:08.standards of ethics, but has to strike at all times to avoid any
:04:08. > :04:13.appearance of impropriety. Even the fact that she is in court now is
:04:13. > :04:17.difficult to reconcile with that contract. If she is placed under
:04:17. > :04:24.formal investigation they do today, she could be forced to resign,
:04:24. > :04:30.leaving the IMF in yet another leadership crisis.
:04:30. > :04:36.Asian markets are bouncing back. Tokyo's Nikkei has been surging
:04:36. > :04:45.after Thursday's 7% plunge. It wiped more than $300 billion off
:04:45. > :04:51.the value of leading Japanese shares.
:04:51. > :04:57.Let's find out how things are faring.
:04:57. > :05:02.They were rising about 3%, but now they are suddenly Lola. Basically
:05:02. > :05:08.extending the huge losses that we saw on Thursday. That was when it
:05:08. > :05:12.plunged to 7.3%, the steepest one day fall in two years, and that was
:05:12. > :05:21.on expectations that the US would ease back on monetary support. We
:05:21. > :05:26.also saw beat monetary data. -- week. We saw some gains, investors
:05:26. > :05:35.coming back in, potentially looking for some bargains. But again a
:05:35. > :05:38.sell-off is happening. The falls on Thursday do seem terribly dramatic,
:05:38. > :05:43.but the fact that shares have risen quite dramatically in the last
:05:43. > :05:48.couple of months, in the last six months, the Nikkei is 60% higher
:05:48. > :05:52.than it was six months ago, and that was before Japan's Prime
:05:52. > :05:57.Minister was elected. He introduced a set of monetary and fiscal
:05:57. > :06:07.policies that were incredibly aggressive, designed it to jolt the
:06:07. > :06:12.
:06:12. > :06:22.country out of a 20-year' deflation cycle. And it must essentially
:06:22. > :06:32.saying it is mainly due to investor uncertainty. -- analysts.
:06:32. > :06:32.
:06:32. > :06:39.Let's get a bit more analysis. He is a chief market strategist. We
:06:39. > :06:44.were hearing that speculation, reasons leading to the dramatic
:06:44. > :06:53.fall that we saw in Asian shares. The front page of the Financial
:06:53. > :06:57.Times nails it. There a lot -- are a lot of explanations. There was an
:06:57. > :07:01.element of everyone waiting for an excuse to sell. We have seen
:07:02. > :07:07.markets rise relentlessly, particularly the Nikkei. It was up
:07:07. > :07:17.40% this year. People think that it cannot carry on much longer. We had
:07:17. > :07:19.
:07:19. > :07:23.expansion, and some concerns about monetary policy in Japan. These
:07:23. > :07:28.three things that seem to have scared investors. Where we have
:07:28. > :07:32.seen markets rise strongly, when it does start to sell off, or the
:07:32. > :07:38.selling begets more selling. Everyone starts to head for the
:07:38. > :07:42.exit at once. What will we see going forward? All things that go
:07:42. > :07:48.up must come down. We are seeing the Nikkei is rebounding quite
:07:48. > :07:54.strongly. We have seen a lot of volatility. The next big test for
:07:54. > :08:00.the markets is a week today. We have got the US unemployment data.
:08:00. > :08:03.That will be the next Test. Maybe for the next five days, we will
:08:03. > :08:13.have some top be nervous markets, and till we see the state of the US
:08:13. > :08:14.
:08:14. > :08:19.economy. -- choppy. As you say, data coming out of the US. The
:08:19. > :08:24.focus is always on it. One of the key reasons that we look dad, as a
:08:24. > :08:29.reason for the sharp fall, was the mixed messages coming out of the
:08:29. > :08:39.Fed. How important is the Federal Reserve Corps the stability of
:08:39. > :08:41.
:08:41. > :08:45.world markets? -- for the stability. It is very important. There are
:08:45. > :08:49.many people who would argue that the stock markets have been pumped
:08:49. > :08:54.up to artificial levels because of the amount of quantitative easing
:08:54. > :08:58.that we have seen from the central banks. This is one of the things
:08:58. > :09:02.that has put to the markets. If the central banks decide to rein in the
:09:02. > :09:07.amount of money they are pumping into the markets, it is like
:09:07. > :09:11.pulling a ride out from underneath. That is why they are scared.
:09:11. > :09:21.Investors and traders are very obsessed with which way that
:09:21. > :09:21.
:09:21. > :09:28.central bank sentiment is going. Some of the news, small investors
:09:28. > :09:33.in shares of Spain's nationalised lender Bankia suffered massive
:09:33. > :09:40.losses on Thursday. The stock plunged by more than 50%. The force
:09:40. > :09:45.came as elderly people protested outside Madrid's top market. The
:09:45. > :09:51.market regulator says it will look closely at it uncommon higher
:09:51. > :09:57.volume of shares traded. Senior managers are already under