:00:00. > :00:00.says it will map 1 billion stars. Now for the latest financial news
:00:00. > :00:25.with World Business Report. The beginning of the end of cheap
:00:26. > :00:29.money at the Fed begins to scale back its massive stimulus programme.
:00:30. > :00:37.Plus, no more taxpayer bailouts. Europe strikes a deal that will see
:00:38. > :00:45.investors put the Bill, -- foot the bill for future failures.
:00:46. > :00:49.Also in the programme, we will join our team in Asia to get the latest
:00:50. > :00:54.on market reaction there to that fed decision. The world economy has been
:00:55. > :01:00.watching and waiting for some time, and it is now finally happening. The
:01:01. > :01:05.US Federal Reserve, the most powerful Central Bank in the world,
:01:06. > :01:09.says it will start to scale back its economic stimulus programme from
:01:10. > :01:14.January. The Fed has been pumping $85 billion per month into the US
:01:15. > :01:17.economy, for just over a year. It has been buying of Treasury and
:01:18. > :01:26.mortgage bonds. It will trim that to buy 10 billion a month. -- it will
:01:27. > :01:40.trim that by 10 million per month. It may keep interest rates lower,
:01:41. > :01:45.and now the tapering has started, Wall Street seems to be reassured it
:01:46. > :01:54.will happen slowly. The stock market closed at record highs.
:01:55. > :01:58.The decision taken by those inside this building will have consequences
:01:59. > :02:03.around the world. But their actions were driven by what is going on
:02:04. > :02:08.right here in the US. In fact, Ben Bernanke talked about the
:02:09. > :02:14.improvement in the US economy, in particular what is happening in the
:02:15. > :02:17.jobs market. Reflecting an improved outlook for
:02:18. > :02:24.the job market, we decided to moderately reduced the monthly
:02:25. > :02:27.pace. If incoming information supports the committee's expectation
:02:28. > :02:31.of further progress towards its objectives, the committee is likely
:02:32. > :02:37.to reduce the purchases in further measured steps in the future. The
:02:38. > :02:40.Federal Reserve doesn't believe this is job done, in fact Ben Bernanke
:02:41. > :02:44.talked about how many Americans had dropped out of the workforce
:02:45. > :02:49.completely. They will continue to support the US economy, buying up
:02:50. > :02:58.$75 billion worth of bonds each month. In combination with reducing
:02:59. > :03:01.the amount of bonds they will buy, they will keep interest rates lower
:03:02. > :03:05.for longer. It seems they have managed this shift in policy quite
:03:06. > :03:10.successfully. The Fed decision was not the only
:03:11. > :03:13.big news from Washington being digested on Wall Street. The US
:03:14. > :03:16.Senate voted through a two-year budget deal, already passed by the
:03:17. > :03:22.House of Representatives last week. The vote brings to an end for now
:03:23. > :03:26.the deadlock between Democrats and Republicans over public spending
:03:27. > :03:31.that saw the large swathe of government shutdown in government,
:03:32. > :03:34.and brought them to the brink of defaulting on debts. That has
:03:35. > :03:42.removed a major worry for Ben Bernanke, as we explain.
:03:43. > :03:45.A few months ago, when we heard from Ben Bernanke when he was testifying
:03:46. > :03:48.on Capitol Hill, he mentioned the dysfunction in Washington as being a
:03:49. > :03:54.hindrance to the US economic recovery. The fact that the US now
:03:55. > :03:59.has a budget, it has not had a budget in three years. So what the
:04:00. > :04:04.government has passed today is actually going to fund the
:04:05. > :04:09.government well into 2015. It is a major hurdle, both for Washington,
:04:10. > :04:12.in terms of its politics, but also a significant for the economy because
:04:13. > :04:16.that gives the economy some sort of stability, and that is really
:04:17. > :04:19.important when we are talking about an economy that is recovering from a
:04:20. > :04:25.recession. How has this all being digestive in
:04:26. > :04:29.Asia? Rico Hizon is in Singapore. A black screen, that's not looking
:04:30. > :04:33.good at all! Let's hope we can get to Rico Hizon, because we mention
:04:34. > :04:42.the fact that the markets on Wall Street had a really strong session.
:04:43. > :04:56.There you are, a black screen is never a good seem Dominic thing --
:04:57. > :04:58.in to see. When you speak to policy makers they say the negative effects
:04:59. > :05:03.of this US paper on markets would likely be limited. For example,
:05:04. > :05:08.South Korea promised it will act swiftly to stabilise markets if
:05:09. > :05:20.necessary, but they say the move is basically reducing a lot of the in,
:05:21. > :05:24.uncertainties. There could be a period of instability between May
:05:25. > :05:29.and June, but has for the Asian markets, they are mostly higher.
:05:30. > :05:33.They see the Fed's position as a vote of confidence that the US
:05:34. > :05:41.economy is in the strengthening. They say an expanding US economy is
:05:42. > :05:52.positive news for Asian X -- exporters, with as many US consumers
:05:53. > :05:58.buy from Asia. The yen has fallen yet again to the US dollar, to
:05:59. > :06:01.levels not seen since 2008. Australian shares are rallying the
:06:02. > :06:04.most in nearly eight weeks, with mining companies leading the charge.
:06:05. > :06:10.There are two major markets that are currently on the other side of the
:06:11. > :06:16.spectrum, China and Hong Kong, currently in negative territory. The
:06:17. > :06:22.cost of stock trading has been pushed up. Emerging Asian currencies
:06:23. > :06:26.are falling as well, the Indonesian rupiah hitting a five-year low. The
:06:27. > :06:33.Singapore dollar and the Philippine peso are all touching their lowest
:06:34. > :06:36.levels in three months. We have to wait and see what will be the short
:06:37. > :06:41.and medium-term impact of this tapering off of the programme of the
:06:42. > :06:50.Federal Reserve, which will begin in January 2014.
:06:51. > :06:53.A story that will affect European trading possibly as well, when we
:06:54. > :06:58.start the day he later. Let's move on, because the question of who
:06:59. > :07:05.should pay when a bank goes bust was grappled with into the midnight
:07:06. > :07:07.hour. Not the taxpayer, says a new rule to be signed off by European
:07:08. > :07:12.leaders at the Brussels summit today. It would see rescue money
:07:13. > :07:19.come from the banking industry and its investors. The aim is to prevent
:07:20. > :07:24.a repeat of the turmoil of recent years when failing bank in countries
:07:25. > :07:35.from Ireland to Cyprus were brought to the brink of bankruptcy.
:07:36. > :07:40.The banking and financial sectors are vital to recovery. European
:07:41. > :07:46.leaders know it is essential to their recovery that they police
:07:47. > :07:50.whether big banks can live or die. Member states have argued over the
:07:51. > :07:57.fine details write to the wire, footing the collective bill of
:07:58. > :08:04.ailing banks to stop whole states being dragged down with them. The
:08:05. > :08:09.plan on the table is that if it bank has to be shut, shareholders and
:08:10. > :08:14.creditors take the first hit, then the home country. We are introducing
:08:15. > :08:22.revolutionary change to Europe's financial sector. This is so that
:08:23. > :08:31.taxpayers no longer foot the bill when banks make mistakes or face
:08:32. > :08:39.crisis. Indeed, the era of massive bailouts is over. This will be
:08:40. > :08:45.merged into an all Europe resolution fund. It has been a long road, and
:08:46. > :08:49.this Brussels analyst says it is inevitable it will take a long time
:08:50. > :08:54.to complete. What is missing is that they are trying to put in place a
:08:55. > :09:00.resolution stability fund, but that will be in place over the next ten
:09:01. > :09:03.years. It will take a while to have it in place. The question is, how
:09:04. > :09:07.will you deal with potential bank failures in the meantime? Here, you
:09:08. > :09:13.need a strong financial backdrop, and can ace debility mechanism be
:09:14. > :09:26.that backstop? -- stability mechanism. It was said bluntly at
:09:27. > :09:30.the European Parliament this week. We should not create a single
:09:31. > :09:34.resolution mechanism that is single in name only. Whatever is agreed
:09:35. > :09:39.this week, the banking union won't be ready for some important European
:09:40. > :09:44.Central Bank health checks on banks like this which are due to be
:09:45. > :09:49.competing next November. This breaks the loop between banks and their
:09:50. > :09:56.sovereign countries, and it could take years. It does seem that at
:09:57. > :09:59.last they are making a start. That his World Business Report, we
:10:00. > :10:11.will see you soon as we look through the papers. Stay with us.
:10:12. > :10:18.An independent enquiry into breast care services in hospitals in the
:10:19. > :10:24.West Midlands will be published this morning. It follows an investigation
:10:25. > :10:25.into surgeon Ian Pattison, over allegedly botched operations on 1200