:00:00. > :00:00.Now for the latest financial news with Sally Bundock And World
:00:00. > :00:19.The bell tolls for the world's oldest bank.
:00:20. > :00:23.Italy's Banca Monte dei Paschi di Sienna faces a deadline to raise
:00:24. > :00:27.$5.2 billion from private investors today.
:00:28. > :00:32.If it fails state intervention is unavoidable.
:00:33. > :00:35.Living under a cloud - the millions in north-east China
:00:36. > :00:38.stranded by extreme air pollution - we are live in Beijing
:00:39. > :00:55.The clock is ticking for the troubled lender Banco Monte
:00:56. > :00:59.The Italian bank is seeking just over $5 billion
:01:00. > :01:01.in new investment to help it stay afloat -
:01:02. > :01:04.today is the final deadline for existing investors and other
:01:05. > :01:06.retail investors to purchase new shares.
:01:07. > :01:08.The new Italian Prime Minister has sought Parliamentary approval
:01:09. > :01:11.for an emergency bailout package worth some $20 billion
:01:12. > :01:13.in the event that private sector assistance doesn't materialise.
:01:14. > :01:16.This would prove contentious as investors who have already lent
:01:17. > :01:19.to the bank will be penalised under EU laws which came into force
:01:20. > :01:23.Poor quality loans are one of the biggest issues facing
:01:24. > :01:34.In total, the country's lenders sit on around 370 billion dollars worth
:01:35. > :01:38.This accounts for about 40% of all the non-performing loans
:01:39. > :01:50.Ben Kumar is Investment Manager at Seven Investment Management.
:01:51. > :02:00.Good morning, then. How this particular bank get into so much
:02:01. > :02:05.trouble? As you say, bad loans are the focus. When you are the oldest
:02:06. > :02:08.bank in the world, maybe your regulations, maybe the way you
:02:09. > :02:11.assess loans, is a bit more of different to modern banks. It is
:02:12. > :02:15.based on relationships, how long they have been going and if you have
:02:16. > :02:18.been lending to a family or a business hundreds of years, the
:02:19. > :02:22.credit checks aren't of the same quality as some of the newer banks.
:02:23. > :02:27.The new banks have had trouble as well. Banca Monte dei Paschi di
:02:28. > :02:30.Sienna this year has had a problem lending money to people who couldn't
:02:31. > :02:37.afford to pay it back. It has been going on now for centuries. As we
:02:38. > :02:41.know, for some weeks they have been grappling together to try and save
:02:42. > :02:47.this bank. It has been reported that they managed to get around 500
:02:48. > :02:53.million euros. That is nowhere near their target. Will they raise the
:02:54. > :02:58.funds? Element they have a few ways to do it. Debt to equity swap, not
:02:59. > :03:05.appealing. They have some big investors. One of the biggest
:03:06. > :03:13.Italian insurers owes about 180 million of shares. -- owns. There
:03:14. > :03:21.aren't many other big investors like that in the bond market who you can
:03:22. > :03:26.guarantee will swap into equity. Explain why are swapping into equity
:03:27. > :03:29.isn't an attractive option. You are kind of swapping a guarantee for
:03:30. > :03:35.something that is not a guarantee. It is difference between a bond
:03:36. > :03:40.where you get what you meant to equity way you go over 100 euros and
:03:41. > :03:44.then you hope the bank doesn't go bust and you get some money back
:03:45. > :03:47.when you can. You can see why that is not attractive to people who
:03:48. > :03:56.thought bonds were stable. Let's assume they don't get that money
:03:57. > :04:02.they need and required today. The ultimate deadline is December 30
:04:03. > :04:06.one. It is not reached, the debt-to-equity swap is unwound and
:04:07. > :04:10.no one has to go through it and the Italian government has to come
:04:11. > :04:14.through and bailout Banca Monte dei Paschi di Sienna. A lot of investors
:04:15. > :04:17.will find out their safe investment has become unsafe indeed. It will be
:04:18. > :04:21.difficult for the relatively new Prime Minister who has only been
:04:22. > :04:27.there since December 12. Thank you for coming in. As you know, we will
:04:28. > :04:30.be across a story today as it developed.
:04:31. > :04:34.US President Barack Obama has permanently banned new oil and gas
:04:35. > :04:38.drilling in US Atlantic and Arctic waters, in one of his last major
:04:39. > :04:40.environmental protection actions before leaving office next month.
:04:41. > :04:43.Mr Obama invoked a provision of a 1953 law which will be
:04:44. > :04:45.difficult for President-elect Donald Trump to reverse.
:04:46. > :04:48.Volkswagen has struck a deal with the US authorities over some
:04:49. > :04:51.80,000 VW, Audi and Porsche cars with 3-litre diesel engines.
:04:52. > :04:54.The agreement is another step towards allowing the German car
:04:55. > :04:56.maker to put the emissions cheating scandal behind it.
:04:57. > :04:59.In June VW agreed to a $15 billion settlement for another 475,000
:05:00. > :05:03.The new agreement will cost Volkswagen an estimated $1 billion.
:05:04. > :05:05.Nike, the world's leading sportswear manufacturer,
:05:06. > :05:07.has posted better-than-expected profits following a rebound
:05:08. > :05:20.Profits rose 7.3% to $842 million in the three months to November,
:05:21. > :05:24.while revenue jumped 6.4% to $8.18 billion.
:05:25. > :05:36.Nike's basketball category and the Jordan brand accounted
:05:37. > :05:42.for about 15% of Nike's wholesale revenue in 2016.
:05:43. > :05:46.Adam Messinger who is Chief Technology Officer is leaving
:05:47. > :05:48.just weeks after its chief operating officer resigned.
:05:49. > :05:54.Twitter's shares have lost 23% this year, leaving the company
:05:55. > :05:58.with a market value of $12.8 billion.
:05:59. > :06:01.A strike by airport baggage handlers and check-in staff in the UK planned
:06:02. > :06:07.for Friday and Christmas Eve has been called off.
:06:08. > :06:10.More than 1,500 members of the Unite union employed by Swissport had been
:06:11. > :06:14.due to walk out for 48 hours in a row over pay and conditions.
:06:15. > :06:16.The strike was called off following talks
:06:17. > :06:19.Swissport confirmed it had made a revised offer,
:06:20. > :06:27.which the union would recommend to its members.
:06:28. > :06:30.The Chinese capital Beijing has been blanketed in thick smog
:06:31. > :06:32.since the weekend leading the authorities there to take
:06:33. > :06:34.drastic action to minimise the pollution crisis.
:06:35. > :06:37.Factories have been forced to slow down or pause production,
:06:38. > :06:39.flights have been cancelled and highways closed
:06:40. > :06:42.Yet, despite these red alert provisions the air pollution
:06:43. > :06:56.Stephen McDonnell is in our Beijing bureau.
:06:57. > :07:02.We can see behind you the live shot of the smog. This is pretty
:07:03. > :07:07.debilitating and I know that business leaders I have spoken to
:07:08. > :07:12.who are considering China are thinking they won't have offices in
:07:13. > :07:16.Beijing for this reason. As you mentioned, the view here from the
:07:17. > :07:23.bureau tells the story. Normally there is a park and the CBD which
:07:24. > :07:28.you can see. We can't see it at the moment and that is because this huge
:07:29. > :07:34.city is covered in this toxic veil of pollution. As you mentioned, the
:07:35. > :07:41.provisions to try and reduce this. Good knows how bad it could have
:07:42. > :07:45.been. -- goodness knows. You mentioned factory closures. We had a
:07:46. > :07:53.look at that and apparently some 1200 factories were told to stop
:07:54. > :07:58.producing. Cars have gone on to an odds and evens and numberplate
:07:59. > :08:03.system which has cut the traffic in half and yet, pollution levels, if
:08:04. > :08:10.we talked about PM 2.5 are still well over 400 in Beijing and much
:08:11. > :08:18.worse in a nearby province when we are talking 600, 700. I think one
:08:19. > :08:25.date even registered as 1000. What will the authorities do next? At the
:08:26. > :08:33.moment, they are trying to worry about them getting through the next
:08:34. > :08:37.few days. Many flights have been cancelled because of poor
:08:38. > :08:40.visibility. Freeways shut down because of the same reason.
:08:41. > :08:44.Schoolchildren have been told to stay at home. I think they are
:08:45. > :08:50.hoping that all of this can reduce the problem but really, they just
:08:51. > :08:56.need the wind to come along and clear this. In terms of long-term
:08:57. > :09:00.solutions, well, it's closing down the most clapped-out factories, it
:09:01. > :09:03.shutting down the worst of the coal-fired power stations here which
:09:04. > :09:09.are still pretty terrible. Beijing has moved a lot of industry out of
:09:10. > :09:15.the city area into other provinces and possibly that's why the problem
:09:16. > :09:19.gets worse the further you get from the city but it poses a big problem
:09:20. > :09:22.for people wanting to do business here. This is the centre of
:09:23. > :09:26.government in Beijing. If you want to do business in China, you need to
:09:27. > :09:30.come to Beijing and many large companies are based here for that
:09:31. > :09:36.very reason. All right. They have huge problem to deal with. Banks
:09:37. > :09:41.were your time and telling us what is going on. We will talk of that in
:09:42. > :09:44.more detail. A quick look at the markets. The US and Europe had a
:09:45. > :09:48.good session yesterday so Asia are riding on the coattails of that.
:09:49. > :09:52.Japan is down slightly by one third of a percent. You up-to-date with
:09:53. > :10:02.business stories. I will see very soon.
:10:03. > :10:05.After the attack in Berlin, authorities throughout Europe,