:00:00. > :00:00.the seafloor is directly connected to its continental shelf.
:00:00. > :00:20.Those are the latest headlines. It is time for World Business
:00:21. > :00:24.Report. The new era of big brother banking
:00:25. > :00:28.looms. Regulators vote on whether to bring in Paul Volcker's rule and
:00:29. > :00:32.fundamentally change how US banks operate for ever.
:00:33. > :00:36.Dumping General Motors. The US government sells its last stake in
:00:37. > :00:46.the carmaker, losing $10 billion of taxpayers money in the process.
:00:47. > :00:53.You are with World Business Report. In a moment, we will be heading
:00:54. > :00:59.light to New York to find out why the US government chose to sell its
:01:00. > :01:03.last GM shares. But worst of all, Wall Street banks will soon get a
:01:04. > :01:07.decision on a controversial ban that could not only affect how they run
:01:08. > :01:15.their business but also the ability to make money. The ban, it. Banks
:01:16. > :01:20.for trading `` from trading for their own gain and limited the
:01:21. > :01:21.ability to invest in hedge funds and private equity. Several regulators
:01:22. > :01:24.are set to vote on the proposal. private equity. Several regulators
:01:25. > :01:26.are set to vote on the proposal Or are set to vote on the proposal. Or
:01:27. > :01:31.it make the financial sector any safer?
:01:32. > :01:37.The failure of Lehman Brothers shocked the world. We did came the
:01:38. > :01:41.realisation that Casino fever had taken over the banks, and they had
:01:42. > :01:45.been rolling the dice with our money. Today, regulators will vote
:01:46. > :01:48.on the Volcker Rule, a measure designed to place restrictions on
:01:49. > :01:54.the finance industry after the chaos that it has caused. The big banks
:01:55. > :02:00.use large amounts of money, mostly borrowed money, to place big bets so
:02:01. > :02:04.that they can make big bonuses. But the Volcker Rule is supposed to stop
:02:05. > :02:11.that type of gambling because it is very high risk and if those bets go
:02:12. > :02:15.the wrong way, like they did in 20 `` 2008, they cannot only threaten
:02:16. > :02:20.the bank itself but the entire financial system. The Volcker Rule
:02:21. > :02:25.was named after this man, Paul Volcker. He was a former chairman of
:02:26. > :02:30.the Federal Reserve, who pushed for its interruption `` introduction
:02:31. > :02:34.when he served as an advisor to President Obama. It is considered
:02:35. > :02:39.the centrepiece of bank reforms referred to as the Dodd`Frank act,
:02:40. > :02:43.after the lawmakers who helped craft to be built three years ago. Its
:02:44. > :02:48.implementation was delayed in part because of strong opposition from
:02:49. > :02:52.the finance industry. I think the finance industry has been lobbying
:02:53. > :02:57.very aggressively to make sure it does not change. But unfortunately
:02:58. > :03:01.for many people, in the larger institutions, it will have a sniff
:03:02. > :03:04.against impact. This seems to be a a lot more tough, coming down the
:03:05. > :03:10.pipe, that people thought it would join to be. The banks, whose power
:03:11. > :03:16.and complexity has challenged regulators, are in for a shock. The
:03:17. > :03:21.financial crisis on Wall Street is over. But the fallout is not. And
:03:22. > :03:28.braced for new rules aimed at securing them form `` from taking
:03:29. > :03:36.the kind of risks that pose a danger to us.
:03:37. > :03:40.We heard, big bets to make big bonuses. Do you believe that this is
:03:41. > :03:45.the right reaction to prevent that kind of thing from happening again?
:03:46. > :03:49.It is clear there was a failure in banking and 2008 that caused the
:03:50. > :03:54.global crisis, that it has been the reaction to that crisis which I
:03:55. > :03:57.think is potentially very different. This new rule is potentially
:03:58. > :04:04.throwing the baby out with the bathwater. One of the successes of
:04:05. > :04:06.Western economies being able to grow so spectacularly over the last 0
:04:07. > :04:11.so spectacularly over the last 70 years is because they have very
:04:12. > :04:15.efficient markets. For markets to be efficient and allocate cash properly
:04:16. > :04:19.in the economy, to allow companies to grow and therefore create new
:04:20. > :04:22.employment, means that they have to be free to do that. Unfortunately
:04:23. > :04:26.the Volcker Rule and some of the other things that are happening
:04:27. > :04:35.makes markets less efficient. That is a long`term danger. White is ``
:04:36. > :04:39.what is the right answer? They see your point of view, that markets
:04:40. > :04:43.need to be free, but we were failed on a spectacular level all over the
:04:44. > :04:49.world. Not only were banks needing to be bailed out, that other huge
:04:50. > :04:52.companies, such as carmakers, we will be talking about General Motors
:04:53. > :05:01.in a minute. The ramifications were enormous. There has to be an element
:05:02. > :05:03.of oversight, there needs to be efficient regulation. There needs to
:05:04. > :05:08.be an understanding and good corporate governance. Within the
:05:09. > :05:12.banks, there has to be learning from the mistakes. But it will still be
:05:13. > :05:15.an overreaction to make it difficult for banks to trade, which is
:05:16. > :05:20.effectively what the new rule is going to be. If we do not have
:05:21. > :05:25.liquidity in the markets, we will have bigger crises in the future.
:05:26. > :05:32.Bill will talk us through today s newspaper stories as he will return.
:05:33. > :05:40.The US government has sold its remaining shares in General Motors
:05:41. > :05:41.at a loss of $10 billion. The US Treasury spent $49.5 billion bailing
:05:42. > :05:48.out GM in 2008, when it took a 61% out GM in 2008, when it took a 61%
:05:49. > :05:51.stake in the carmaker. The government began selling its shares
:05:52. > :05:58.in November 2010, since emerging from bankruptcy. GM has reported 15
:05:59. > :06:02.profitable quarters, has almost $27 billion in cash, and is considering
:06:03. > :06:07.rewarding shareholders with a dividend payment. Let's speak to
:06:08. > :06:13.Geoff Bennett. Good morning. Tell us about the
:06:14. > :06:22.timing of the sale. What do you think? The sale is allowing GM to
:06:23. > :06:28.start 2014 as a fresh, new company. It is no longer going to be known as
:06:29. > :06:31.government motors in the State. It will have a chance not only to
:06:32. > :06:33.restructure how it pays its executives and whether or not it
:06:34. > :06:36.pays a dividend to shareholders but pays a dividend to shareholders but
:06:37. > :06:42.it can also work on beginning to win back customers who may have been
:06:43. > :06:46.turned from purchasing a GM vehicle because they disagreed with the
:06:47. > :06:52.bailouts by the government. Good timing for GM, but what about the US
:06:53. > :06:55.taxpayer? The US taxpayer does seem to be on the hook for this for 10
:06:56. > :06:58.to be on the hook for this for $10 billion. Their run no signs the
:06:59. > :07:05.government is going to go after GM to try to reclaim that. If you look
:07:06. > :07:10.in total at the bailout programmes, for the automakers and the banks,
:07:11. > :07:16.and overall, they came out ahead, but on GM they are walking away with
:07:17. > :07:19.a loss. But in the end, what the government will save, the loss could
:07:20. > :07:23.have been bigger if GM would have gone through an unstructured
:07:24. > :07:28.bankruptcy, we could have seen loss of jobs, and a whole heck of a lot
:07:29. > :07:34.of problems, particularly for the midwest. Do you agree that this was
:07:35. > :07:40.ultimately the best outcome for GM, because it is in much better shape
:07:41. > :07:44.now. I really do. There was no other place for General Motors to go to
:07:45. > :07:49.get money. The banks would not lend money so they had no`one else to
:07:50. > :07:54.turn to but the government. If we let GM go into a bankruptcy, and it
:07:55. > :07:59.became problematic, you would have had auto suppliers not getting paid,
:08:00. > :08:04.auto suppliers leading off people, and it would have created a domino
:08:05. > :08:08.effect through the auto industry. That industry employs a lot of
:08:09. > :08:13.people through the US, both in the midwest and throughout the south.
:08:14. > :08:22.Any disruption to General Motors and also Chrysler, would have played out
:08:23. > :08:26.in a real bad way for the US. Interesting analysis of what is
:08:27. > :08:29.going on with General Motors. Other business stories, Uruguay is on
:08:30. > :08:33.course to become the first country in Latin America to legalise
:08:34. > :08:38.marijuana, launching a social experiment as part of a broad
:08:39. > :08:39.strategy to combat drug trafficking. The green light will likely come
:08:40. > :08:41.today with a vote in the Senate. The green light will likely come
:08:42. > :08:44.today with a vote in the Senate It today with a vote in the Senate. It
:08:45. > :08:47.was already passed through the lower chamber. Passage in the upper house
:08:48. > :08:53.is assured because the ruling party controls both.
:08:54. > :08:57.Mexico's plant energy bill goes to the full floor of the Senate for
:08:58. > :08:59.debate today. It outlines plans to open up the world's 10th biggest oil
:09:00. > :09:05.producer for private investment. It producer for private investment It
:09:06. > :09:12.marks the most Attic overhaul of the industry in 70 years. This is much
:09:13. > :09:16.bolder than the draft proposed by the governing party in August.
:09:17. > :09:26.Let's have a quick look at the markets today.
:09:27. > :09:33.The euro is at a five`year high against the yen. Very strong against
:09:34. > :09:36.the dollar. We are getting use from China, industrial production
:09:37. > :09:43.numbers, which will be swaying sentiment as well. To mention buried
:09:44. > :09:44.quickly, the Dow closed a very marginally, as did the broader S
:09:45. > :10:04.500. Dementia has been described as a
:10:05. > :10:06.global disaster waiting to happen. Ministers from the