20/11/2013 World Business Report

latest headlines. Now for the latest headlines.

`` business News. $13 billion, that is the price JP

Morgan will pay the US government for its role in the 2008 financial

crisis. And persuading the people, Shinzo Abe defends his plan for a

succession of tax hikes. Hello and welcome to World Business

Report. Also in the programme, getting reaction from our team in

Singapore to the other latest economic News and Japan's numbers.

But festival, the 2008 financial crisis to not just to not just do it

on this damage to the financial systems, it wrecked people 's lives.

There is no wonder that harsh punishments are being handed out to

those judged to have been at the centre of the debacle. Today a price

was set for the part a Piedmont and, one of the world's biggest

banks, it is to pay $30 billion. To settle claims that it ever settled

the value of products sold to clients. It is also awaiting the

outcome of a criminal probe from New York.

It is America's biggest bank. One of the founding financial institutions

in this country. It did not need a bailout during the banking crisis.

But JP Morgan has just been handed the biggest ever fine by the US

government. The settlement is a major step in restoring confidence

in our financial markets, no matter how big you are. Like many banks, JP

Morgan was bundling home loans into securities and marketing them as

investments. As homeowners began defaulting on mortgages, the value

of those securities plummeted. Investors lost millions. In

accepting the penalty, JP Morgan is admitting the bank did not comply

with its own guidelines. Employees knew the loans were bad. But despite

the record penalty, though one person has been held responsible. At

some point the American people need a symbol of accountability. That has

not happened. It is not happening with the settlement, for all the

bluster that is being given. As an American, I still feel like we need

serious accountability for what happened. JP Morgan is still

massively profitable. It made $20 billion in 2012. It is

likely to do even better this year. It has been a hit against profits

and cash reserves. Especially given the size of the fine. On the other

hand, the show price is going up again to a ten year high. While

nobody likes a fine, especially of this magnitude, shareholders have

responded positively. It is eliminating some uncertainty. With

this record settlement, JP Morgan hopes to put the fallout behind

them. But it still faces considerable legal jeopardy.

Investigations into rate fixing, foreign exchange manipulation and

its conduct in China. Plans for a controversial rise in

Japan's sales tax will be debated by the country's ruling party today.

Shinzo Abe eight's decision to try and doubled the country's sales tax

to 10% by 2050 with a lift in April next year is a popular. `` 2015. But

the party is hoping a spending boost for the wider economy will ease the

impact on consumers. So why does the government is to lift the sales tax?

The government says that it is essential if Japan is to achieve a

balanced budget 2020. It is hoped that it will raise crucial funds for

the welfare bill. 40% of Japan's population is going to be retired by

2060. But critics say that it will hurt an economy that has only

recently gone on the road to recovery. We will speak to a senior

economist at Fujitsu research. Thank you for being on the programme. Tell

us more about the impact it will have on the Japanese economy,

assuming it comes into being? Japan basically needs two things. One is

additional growth to finance the growing number of retiring

employees. The other is a balanced budget. Japan's government that is

beyond 20%. They need to be balanced. What the government is

doing is trying to implement a sales tax hike. There will be an

additional supplementary budget. Is it the right tool to achieve those

goals that are just mentioned? There is basically no choice. The economy

has called over the past three months, but it still a necklace

track. It is very successful in lifting sentiment. The government is

anxious to keep growth growing. There is some lifting to do.

Government spending will carry the economy through next year. After

that we need to see some structural reforms. Some improvement,

innovation and investment. You say there is no choice. What about the

risk that it will hurt domestic demand. No choice is really the

situation that describes the situation best in Japan right now.

The government needs the economy to keep growing. It needs to balance

the tax hikes. The supplementary budget is necessary. The next debate

will be about the next tax hike that is supposed to happen in 2015. It

also needs to work on tax cuts for corporations. That will lift

sentiment in the economy. There will probably debate European policies

like having different rates of value added tax. All of this will go into

the parliamentary debate. Thank you. Let us preview on some other

business stories. Shareholders of the Nokia have agreed to sell their

friend Bob `` mobile phone business to Microsoft. It goes ahead despite

objections from some investors who oppose the sale of a Finnish asset.

Yahoo! Has boosted its share by about $5 billion. It aims to reward

investors as the company looks to revive growth. The Internet search

engine's plan is focused on acquisitions of smaller technology

companies. Of course, Yahoo has been very much in focus ever since the

appointment of a new chief executive. Prior to her

appointment, it did go through a succession of chief executives in a

very short period of time. All eyes to see this latest move by Yahoo! In

terms of their management strategy. As well as starting a high`level

meeting about sales tax in Japan, data out today is making headlines

as well. Country's trade deficit doubled in the past 12 months as the

rapidly rising energy bill pushed imports higher. Let us look at the

markets. We are now joined from our bureau in Singapore. What is the

latest. That is right. Japan is at a record trade deficit for October. It

sought just about yen1 trillion. It record trade deficit for October. It

so mainly due to expensive fuel

purchases. Exports are rising. Departments are closed off and

shattered ever since the Fukushima disaster. Exports or the biggest

rise in three years. That is leading to hopes of a gradual pickup in

global demand. Experts were up 18% in October. They were mainly being

helped by the weaker again. The export growth has largely

disappointed. You were talking to Mark and shorts. It has been helped

by the payment Mr's massive monetary fiscal expansionary policy. And of

course, that may continue to help. We continue to watch these trade

figures every month. It may provide some relief for the government. That

is the World Business Report. See you soon when we talk through the

papers. The Church of England's ruling body

is expected to take a significant step towards the creation of women