:00:02. > :00:12.from the US. Those are the latest headlines.
:00:12. > :00:23.
:00:23. > :00:26.Time now for the money News In British bankers could be sent to
:00:26. > :00:31.jail for misconduct, so says a long-awaited report commissioned by
:00:31. > :00:35.the Government. Markets on the edge as the US
:00:35. > :00:45.central bank meets. When will it start to pull back on its multi-
:00:45. > :00:53.
:00:53. > :00:58.Also in the programme: The first in our new series on the new middle
:00:58. > :01:02.classes. Today we focus on China. First of all, a long-awaited report
:01:02. > :01:06.on the failings of Britain's banks has been published by the
:01:06. > :01:09.parliamentary commission on banking standards. It was set up by the
:01:09. > :01:14.British Chancellor last year after the scandal over attempts to rig
:01:14. > :01:18.the interbank lending rate. Among the recommendations is a call for
:01:18. > :01:23.senior banking figures to be sent to jail if they are found guilty of
:01:23. > :01:28.recklessness conduct. Our Personal Finance Correspondent has been
:01:28. > :01:33.reading the report. The attempted reading of the key
:01:33. > :01:37.market interest rates at Barclays and other banks caused outrage last
:01:37. > :01:44.summer. The UK goth Exeter-based special commission to investigate
:01:44. > :01:48.how the culture and standards could lead to such an issue. The report
:01:48. > :01:52.so as to deter a senior bankers from doing anything wrong, the
:01:52. > :01:55.bonuses should be deferred for up to ten years, bonuses should be
:01:55. > :02:00.capped that could be cancelled if a bank needed to be rescued in a
:02:00. > :02:04.bail-out by the state, and there should be an offence of reckless
:02:04. > :02:08.misconduct by senior bankers punishable with a prison sentence.
:02:08. > :02:15.I expect it is a power that would really be used. It is a nuclear
:02:15. > :02:19.deterrent, but it is there. It is a tool that could be used and which
:02:19. > :02:25.we intend should alter behaviour will prior to getting to that point.
:02:25. > :02:28.The report seeks to keep top bankers under control by putting
:02:28. > :02:33.their bonuses out of reach for years and by threatening them with
:02:33. > :02:37.more painful sanctions if they behave badly. It is not just the
:02:37. > :02:44.bank is to get a going-over. More stringent regulation is called for
:02:44. > :02:47.and more surgery on the banking industry. In particular, RBS. Is
:02:47. > :02:53.more than 80% owned by the British taxpayer after it had to be bailed
:02:53. > :02:56.out. It is to be split into a bad bank which holds of the problem
:02:56. > :02:59.debts and a good bank which could lend freely and could be worth more
:02:59. > :03:05.when it is sold off to the public sector. The commission is calling
:03:05. > :03:08.for a Government report on them dishes and -- decision by September.
:03:08. > :03:13.The American economy is showing signs that things are getting
:03:13. > :03:16.better. Housing is rebounding and the job market is getting stronger.
:03:16. > :03:23.Given the improvements, investors want to know when the US Federal
:03:23. > :03:33.Reserve, led by Ben Ben a key, will begin to scale back its efforts to
:03:33. > :03:35.
:03:35. > :03:41.This is new territory for the Federal Reserve, buying assets and
:03:41. > :03:45.supporting the US economy. Until unemployment hits the sweet 6.5%,
:03:45. > :03:51.the Federal Reserve has said it will not and it's easy money
:03:51. > :03:57.policies. Just a few weeks ago, the chairman said this. If we see
:03:57. > :04:04.continued improvement and we have confirmed that it that is going to
:04:04. > :04:09.be sustained, then we could take a step down in our pace of purchases.
:04:09. > :04:13.Again, if we do that, it would not mean that we are automatically
:04:13. > :04:17.aiming towards a complete wind down. We would be looking beyond that to
:04:17. > :04:23.see how the economy of wolves and we could either raise or lower
:04:23. > :04:33.carapace of purchases. The mere suggestion it made by Les bons said
:04:33. > :04:33.
:04:33. > :04:37.markets into a frenzy. -- it may buy less bonds. We have had some
:04:37. > :04:41.violent reactions in the market over the past couple of weeks.
:04:41. > :04:45.Triple digit swings have been commonplace in the last two weeks.
:04:45. > :04:51.What we are looking for is some sort of stability to come after
:04:51. > :04:55.this announcement is made. The hope is that clarity will, at the end of
:04:55. > :05:01.the two-day meeting. Everyone will be listening for clues to when and
:05:01. > :05:06.how it will ease its way out of the stimulus. It has been unsuccessful
:05:06. > :05:12.late Lee getting its message across. The Federal Reserve wants to
:05:12. > :05:15.communicate that it will continue to run very accommodative,
:05:15. > :05:18.supported monetary policy and that it will be very cautious and
:05:18. > :05:25.withdrawing that easy policy because of the fragility of the
:05:25. > :05:29.recovery. Another question needing clarity, is the German leaving when
:05:29. > :05:33.his term ends in January? -- chairman. Recently President Obama
:05:33. > :05:37.gave us a clue, saying he is has already stayed longer than he
:05:37. > :05:43.wanted to. It seems the man who orchestrated the stimulus will not
:05:43. > :05:49.be the one to get the American economy off of it.
:05:49. > :05:53.Japan's exports to the US and China soared in the month of May. That is
:05:53. > :06:03.thanks to the weaker yen. Because the unions are weak, import costs
:06:03. > :06:05.
:06:05. > :06:10.Put this in perspective for us. guess we are starting to see the
:06:10. > :06:15.impact of what is known as a economics, the economic policies of
:06:15. > :06:18.the Prime Minister, which helped weaken the Japanese currency. It
:06:18. > :06:23.has strengthened somewhat in the last few weeks, but it is still
:06:24. > :06:27.much weaker compared to -- and head to six months ago. That helps to
:06:27. > :06:31.boost exports because it makes Japanese products cheaper overseas
:06:31. > :06:37.and it also boosts their overseas revenues when they are converted
:06:37. > :06:40.back into the Japanese currency. As a result, export rising more than
:06:41. > :06:45.10% in the world of May from last year, which is the biggest rise
:06:46. > :06:55.since the 2010. Import costs are also rising and Japan Kwok another
:06:56. > :06:56.
:06:56. > :06:59.larger trade deficit. -- clocked. If looking around the troubled
:06:59. > :07:03.global economy today it is hard to see many bright spots from which a
:07:03. > :07:06.future of recovery might be based, except perhaps one.
:07:06. > :07:11.Some economic analysts have been championing the arrival of a knight
:07:11. > :07:14.in shining armour, or at least comfortable shoes, a bit of
:07:14. > :07:18.knitwear perhaps. We are talking about the Chinese middle class and
:07:18. > :07:22.to kick off assets and looking at the emerging middle class around
:07:22. > :07:29.the world, our correspondent in China went in search of the new
:07:29. > :07:33.consumers in the new cities there. That the Chinese masses are
:07:33. > :07:38.deserting the countryside in search of work and a better life is an old
:07:38. > :07:43.story. But now there is a new chapter. The farmers leaving these
:07:43. > :07:48.fields for cities like this one are becoming not just workers, but
:07:48. > :07:53.consumers as well. In short, they are off to join the middle class.
:07:53. > :08:01.This woman earns a little more than $12,000 at every year and she
:08:01. > :08:07.spends every last bit of it, often with the help of her credit card.
:08:07. > :08:14.TRANSLATION: My parents would never spend money. Attitudes are changing
:08:14. > :08:24.fast. China needs this to happen so that its new cities can become the
:08:24. > :08:28.
:08:28. > :08:35.building blocks of economic growth. His family live on $40,000 a year.
:08:35. > :08:45.There is the child, the mother and the father. They live in a nice
:08:45. > :08:51.apartment now a typical of millions of Chinese families. TRANSLATION:
:08:51. > :08:58.Yes, I do feel middle class. It is right that the week get left behind
:08:58. > :09:01.and the stronger survive. China's expanding middle class means big
:09:02. > :09:07.opportunities for the global economy as well. In the past few
:09:07. > :09:11.years more than a dozen wine bars have sprung up across the city.
:09:11. > :09:21.Foreign carmakers are cashing in. Jessica and her husband currently
:09:21. > :09:21.
:09:21. > :09:26.spend half of their monthly income on repayments for this. This new
:09:26. > :09:31.amusement park is a sign of the booming leisure industry. And in a
:09:31. > :09:41.little more than $30 per ticket it is a decidedly middle class
:09:41. > :09:41.
:09:41. > :09:45.experience. There are fears that this economy could falter before
:09:45. > :09:49.the fledgling consumer society really takes off, but if the music
:09:49. > :09:59.doesn't stop, China's middle class just might keep on spending
:09:59. > :10:04.
:10:04. > :10:11.And you can find out more on our series online. See how to show us
:10:11. > :10:15.what being middle class means to you when you are. Get in touch.
:10:15. > :10:17.Let's show you how the markets are Let's show you how the markets are
:10:17. > :10:23.trading ahead of the closure of that today meeting of the US
:10:23. > :10:27.Federal Reserve. As you can see, we have a very mixed picture, with
:10:27. > :10:32.Japan higher. The Japanese yen is trading much weaker today against
:10:32. > :10:42.the dollar and many other currencies around the world as well.
:10:42. > :10:42.