19/03/2014 World Business Report

among them, one written to her by Ernest Hemingway. For the latest

financial news with Sally. Taking the reins, the new boss of

the American soul `` Central bank, faces the tough task of winning

market of six years of keep money. And years or Cyprus teetering on the

bank of bankruptcy and we look austerity in the banking sector to

shake up there. Welcome. Also in the programme, it is budget Day in the

UK, we will look at what George Osborne is likely to announce as he

attempts to keep debt under control. First, she has finally taken the hot

seat after months of waiting, chair day two of her first federal reserve

meeting. The biggest test of the British it will be how she manages

from firefighting mode to normal. The Fed has been cutting its large

cash injections launched at the height of the financial crisis six

years ago. Michelle reports from Washington. She is one of the most

powerful women in the world. This Wednesday, Janet Yellen host her

first news conference as Fed Chairwoman. Her words can move the

global financial markets. In Wall Street, economists say this is a

transitional moment for the US central bank.

The economy is gaining momentum, and they are on the way. That's why the

process of exiting the previous policy has begun. Managing a smooth

exit from extraordinary monetary policy for the nation will be one of

the main challenges. What can we expect?

Tapering will continue. This means the Fed will still buy bonds, just

not as many. The question Wall Street is watching closely is what

will they say about forward guidance? It has said it won't raise

rates as long as unemployment is above 6.5%. Unemployment in America

has fallen faster than expected. But nobody believes the job market is

terribly healthy. This threshold is likely to be scrapped. The change

will be in how they knew was there forward guidance, their promise or

pledge that rates will be kept low. I think the time frame will change

from 2015 but we will see a change in how they talk about it.

Janet Yellen may have more control over the world's economy than any

other central banker, but it will be the health of the US economy that

will determine when she declares victory and lets borrowing costs go

on. Here in the UK, the finance minister

is expected to focus on appealing to ordinary working people when he

delivers his 2014 budget. The UK's large budget deficit will make it

difficult for him to unveil many giveaways but he is expected to

reveal a rise in the income tax threshold from ?10,000 to 10,500.

And confirmed child`care subsidies to help people on low and middle

income. In his role, he is also expected to use the budget speech to

announce a new ?1 coin. The new tour sided coin is based on the old

Threepenny bit. The old pound coin is vulnerable to counterfeiters,

apparently. The new coin will be harder to copy and is considered to

be as secure as modern banknotes. We will talk about the bank today.

There is an awful lot on the website. Stay with us here all

morning, we'll keep you across the news. One year ago this week,

Cyprus, the EU's most easterly state was desperately trying to stave off

bankruptcy. Cyprus got a 10 million euro bailout. For the first time

they had to pay high price. Holdings were scrapped or taken away to help

closing one bank and propping up others. We were there a year ago and

we have returned to the capital, Nicosia, to see how Cyprus has

fared. They were unprecedented scenes that shocked the EU. It was

not just the bank machines that ran out of cash, an entire state was

running on empty. Its leaders having no choice but to accept bailout

terms that drained larger accounts opened here. One year on, the crowds

have gone, maybe the most poignant reminder of those events a year

ago, the closed up bank which was taken over by the bank of Cyprus

still heavily exposed to the property loans. Enter the overall

banking sector is half of the size it was but half of all bank owners

here are in arrears. I have three statements. The last 12 months have

been tortured for this British Cypriot who lost his life savings.

His loss is compounded because the bank failed to put some of the cash

in his wife names as he suggested. I was living a comfortable life and

that has been cut in half. I thought I was safe and I could help my son

is in the UK. Half of that money has gone. You sit down and you're 60 in

half of your money is gone. When you go from here? The recession has not

been as deep as expected but the jobless rate has been high. Cypriots

say they have a means to rebuild the economy and finances as they did

after the war with Turkey that divided the island 40 years ago. Can

the dominant bank of Cyprus organise things it? What the bank of Cyprus

needs to become is the most important bag on the island for

onshore Cyprus and the hundred thousand people that are on this

republic. `` 800,000 people. It will be a bank for the Entre activity.

That is the purpose. It is possible that through managerial tourism of

the past we have done too much. As the tourist season starts, young

Cypriots are looking for new ways of creating wealth. The Russian

billionaires sold his shares in US tech giants yesterday instead of

buying shares in the Chinese Internet retailer Ali Barber, why?

Because of the US sanctions which were pinpointed the Russian generals

and politicians. As an Obama has made it clear that until Russia

backs down in the Crimea, further sanctions will apply. What does this

mean for companies that have assets in Russia and the Crimea and are we

going to see a flood of Russian money leave the United States? I am

joined now. Give us your take on his decisions yesterday, is this a site

of things to come? It is a symbolic gesture at the present. If you take

your assets out of the US, where do you move them? The US is a safe

haven. I understand a lot has come to the UK? A lot has. We have seen

$45 billion of investment since the robbery. A lot of that has come to

the UK. Yet, the UK is with those, who are talking about sanctions, who

are talking about being harder on Russia but Russian money is coming

here. There is a difference between the EU and the United States

position. The EU has ten times more trade with Russia. It is harder for

EU members to impose sanctions. It seems symbolic. The thinking on

behalf of those who have a lot of wealth, they think that if they

invest in the long`term in the UK or elsewhere, this is hopefully a

short`term issue? There is the perception of that. I do not think

anyone wants to engage with a trade war with Russia. The parliament

passed a law for Valerie Putin to do the same. What about the insurance

market? How was that affected? Insurance market is a good barometer

for risk assessment. When sanctions were first mentioned, we saw a pause

in Russian risk underwriting because nobody knows how it will play out.

The talk of sanctions has had a more detrimental impact than the

sanctions themselves. Thank you. While we're on this subject, let's

look at the markets. You can see a mixed picture emerging in Asia at

the moment. I will show you how things ended in the United States.

All eyes on the US central bank and the UK here. That is the World

Business Report. Stay with us, we will review the papers in a few

minutes. Thank you. Five years after the

disappearance of Claudia Lawrence in North Yorkshire, police say they

have uncovered new evidence. This links Claudia to people who have yet