:00:19. > :00:23.After a week of talks to minimise the cost of sanctions, French bank
:00:24. > :00:27.BNP Paribas is expected to pay the biggest ever fine of a foreign bank,
:00:28. > :00:33.for falling foul of US regulations. And, a critical deadline looms large
:00:34. > :00:41.for Argentina. Its economy is on the brink of default but the government
:00:42. > :00:50.says it wants to pay its debts. Welcome to World Business Report.
:00:51. > :00:55.I'm Sally Bundock, also in the programme, the World Bank gets a
:00:56. > :00:59.make`over. We'll have the details. Firstly, let's talk about one of
:01:00. > :01:03.France's biggest lenders. French bank BNP Paribas is expected to pay
:01:04. > :01:06.a record $9 billion fine for years of dealing with US`blacklisted Sudan
:01:07. > :01:11.and Iran, in a case that has strained ties between Paris and
:01:12. > :01:15.Washington. Today, US regulators are expected to dish out the largest
:01:16. > :01:20.penalty on a foreign bank after a week of negotiations between lawyers
:01:21. > :01:23.at BNP and in the US. So, how does this compare with other foreign
:01:24. > :01:27.banks who have fallen foul of US authorities?
:01:28. > :01:30.The most recent case was Credit Suisse, it was fined 2.6 billion
:01:31. > :01:34.dollars in May this year for helping rich Americans avoid paying taxes,
:01:35. > :01:36.and in 2012 HSBC had to pay 1.9 billion dollars to avoid prosecution
:01:37. > :01:46.on charges similar to those facing BNP. But those fines are still way
:01:47. > :01:52.below the amounts paid by US banks for actions leading to the financial
:01:53. > :01:55.crisis. Wall Street's former poster child,
:01:56. > :01:58.JP Morgan Chase, paid $13 billion in November 2013 to resolve a series of
:01:59. > :02:07.US and state lawsuits over the sale of toxic mortgage`backed securities.
:02:08. > :02:16.And the list goes on. Alexandre Baradez is Chief Market Analyst for
:02:17. > :02:22.IG and he joins me now from Paris. Give us your take on this, the CEO
:02:23. > :02:28.of BNP Paribas told his staff on Friday that they have a big penalty
:02:29. > :02:33.coming, it will not affect their roadmap, how will it affect BNP
:02:34. > :02:40.Paribas though? It could impact BNP Paribas, even if the CEO tells
:02:41. > :02:47.employees that this measure will not impact the bank. The CEO warned
:02:48. > :02:57.about heavy sanctions, and he talked about dysfunction, and mistakes made
:02:58. > :03:05.from the US, we have seen the impact of it on the stock market. We have
:03:06. > :03:09.seen BNP Paribas shares coming in at 50 euros per share, that is the
:03:10. > :03:16.first impact. That will be heavy for the bike, they will maybe have two
:03:17. > :03:23.plead guilty in this matter. `` they will have to. They will get a huge
:03:24. > :03:29.fine, other about eight `10 billion, he will have to dismiss the
:03:30. > :03:38.executive. `` they will have two. It could have a huge impact. This is
:03:39. > :03:46.the financial sector in France, it is huge and returns, it takes a huge
:03:47. > :03:49.percentage of the economy. With these sanctions, maybe if the market
:03:50. > :03:53.knew of the sanctions before they were announced today after the
:03:54. > :03:59.market closed, there will be a psychological impact on the next
:04:00. > :04:03.day. Also, tell us about the ban on US dollar trading, how will that
:04:04. > :04:10.work? How damaging is it for the bank? I think that this measure, if
:04:11. > :04:20.confirmed, it could be the heaviest measure. BNP Paribas works in
:04:21. > :04:35.Europe, Asia, and the US, and is working with huge US companies, they
:04:36. > :04:41.work between two, `` they work between two continents, they work in
:04:42. > :04:48.a specific area, like gas and oil, it could affect production and
:04:49. > :04:59.Paris, and Singapore. The bank may lose clients, and work with
:05:00. > :05:05.competitors. That is why I think the US authorities worked after the US
:05:06. > :05:12.markets closed, the stock market could be affected. Thank you.
:05:13. > :05:17.The timing is critical as to when an announcement comes through, when we
:05:18. > :05:22.get that announcement, we will update you. Argentina is set to
:05:23. > :05:25.enter a technical default for the second time in 15 years today,
:05:26. > :05:28.unless it can strike a last minute deal with creditors.The South
:05:29. > :05:31.American nation was ordered by a US court to make interest payments to
:05:32. > :05:36.holders of its defaulted bonds, which it has been trying to avoid
:05:37. > :05:38.through a lengthy legal battle. Argentina would lose access to
:05:39. > :05:42.international markets if it defaults on its payments. Ignacio de los
:05:43. > :05:45.Reyes reports from Buenos Ayres on the ongoing battle to escape the
:05:46. > :06:01.problems of its original default, all those years ago.
:06:02. > :06:08.Argentina defaulted on its debts after an economic meltdown that put
:06:09. > :06:13.hunger and unemployment to the country. `` that brought. It decided
:06:14. > :06:20.it could not pay its bills any more. Nearly 15 years later, it is
:06:21. > :06:24.still dealing with the consequences. Things have changed since then.
:06:25. > :06:30.Now, the country is nowhere near a crisis like the one in 2001.
:06:31. > :06:34.Argentina says that this time, it has the money and the will to pay
:06:35. > :06:45.its debts. But, what of the country just is not allowed to? `` what if.
:06:46. > :06:51.Even though most have long since agreed to write off part of what
:06:52. > :06:55.they are owed. The US courts have ruled that if Argentina pays
:06:56. > :07:01.anyone, it has to pay the holdouts as well. Argentina says that it
:07:02. > :07:05.cannot afford it. This leaves the country at the break of a technical
:07:06. > :07:12.default, that some fear could hold foreign investment, harm growth, and
:07:13. > :07:16.trigger unemployment. TRANSLATION: The impact of the 2001 crisis was
:07:17. > :07:20.huge, many people felt it, and many people lost their jobs. Right now we
:07:21. > :07:24.are starting to feel worried. Our salaries aren't like they used to
:07:25. > :07:31.be. There's high inflation, and the economy does not fulfil our needs. I
:07:32. > :07:35.think it is inevitable, the situation is really serious. We
:07:36. > :07:41.should have dealt with debts earlier. We had to negotiate, but we
:07:42. > :07:45.need luck from the other side well. This is a hard situation, I don't
:07:46. > :07:50.want my grandchildren to suffer a crisis like my children lived
:07:51. > :07:56.through some years ago. Argentina has the support of unlikely allies,
:07:57. > :08:01.like the International Monetary Fund, as the country 's default
:08:02. > :08:05.would set a dangerous precedent, with effects on other nations. This
:08:06. > :08:12.is one of the problematic aspects of the ruling, it means that any
:08:13. > :08:16.country contemplating default should be careful as to where it eventually
:08:17. > :08:24.restructures the debt. I think that New York is the place to be avoided
:08:25. > :08:26.now. That will have an impact on US financial markets.
:08:27. > :08:34.Argentina has 30 days to negotiate with debt holders, and find a way to
:08:35. > :08:38.avoid default. The government says that Argentina wants to pay, but is
:08:39. > :08:44.figuring out how to do it before the economy grinds to a halt.
:08:45. > :08:46.In other news: The Bulgarian president, Rosen Plevneliev has said
:08:47. > :08:55.that he'll dissolve parliament and appoint an interim government. It's
:08:56. > :08:58.the latest development in a crisis over the banking system. After talks
:08:59. > :09:01.with the head of the central bank and the finance minister, the
:09:02. > :09:05.president said money deposited with the country's banks is safe. Five
:09:06. > :09:11.people have been arrested on suspicion of spreading rumours that
:09:12. > :09:15.triggered a run on two banks. The World Bank has been making loans
:09:16. > :09:18.to poor countries since it was founded in 1945. But the world's
:09:19. > :09:21.most famous lender is now undergoing its first restructuring in nearly
:09:22. > :09:24.two decades. Starting this week, it will divide itself into 14 global
:09:25. > :09:33.practices that focus on areas such as energy and agriculture. Let's
:09:34. > :09:39.have a look at the markets today in Asia, we are headed higher across
:09:40. > :09:44.the board. We have a stronger yen against the dollar, that has been
:09:45. > :09:48.helping trade in Japan a bit. We have had good trade figures from
:09:49. > :10:00.Japan. Strong data in the month of May. We will see you later as we
:10:01. > :10:03.look through the papers. It's the latest playground craze
:10:04. > :10:12.being enjoyed not just by children in the UK ` but all around the
:10:13. > :10:15.world. They're called Loom Bands, and if you have young children
:10:16. > :10:18.you'll probably already know about the small rubber bands that can be
:10:19. > :10:24.woven into wristbands, necklaces, key rings ` just about anything.
:10:25. > :10:25.John Maguire has been finding out more. Right now, right around