:00:00. > :00:19.A bleak Christmas for the world's oldest bank: Italy's Monte dei
:00:20. > :00:22.Paschi requests a state bailout, after plans to save itself
:00:23. > :00:29.Plus: It is a $660 billion relationship, but could Trump's
:00:30. > :00:42.tough talk spell a costly trade war between the US and China?
:00:43. > :00:58.If you are tuning in for the first time, stay where you are. I know it
:00:59. > :01:02.is early in Britain. We have nine minutes and here is a fascinating
:01:03. > :01:07.snapshot of all the latest in the world of business and money. Who put
:01:08. > :01:08.that on the autocue? We are going to start in Italy. We have been
:01:09. > :01:12.following this for weeks now. because in the last few hours,
:01:13. > :01:16.one of the country's biggest banks says it will request
:01:17. > :01:18.a government bailout. We are talking about Monte
:01:19. > :01:20.dei Paschi di Siena. Its boss has been flying around
:01:21. > :01:23.the world, desperately trying to raise money from investors
:01:24. > :01:25.to keep it afloat. But late on Thursday the bank
:01:26. > :01:28.admitted it had failed. After a late-night meeting,
:01:29. > :01:32.the Italian cabinet has passed Let's give you some
:01:33. > :01:48.of the background to this. Monte dei Paschi is not only
:01:49. > :01:51.Italy's oldest bank, It was founded in 1472,
:01:52. > :01:55.and became one of the country's most Fast-forward 5.5 centuries,
:01:56. > :01:58.and things aren't looking A string of bad decisions has left
:01:59. > :02:07.it with a pile of non-performing loans, bad debts that borrowers
:02:08. > :02:09.are unlikely to pay back, This summer, it was singled
:02:10. > :02:19.out in stress tests by the European Central Bank
:02:20. > :02:23.as the shakiest of all 51 major It has lost nine tenths
:02:24. > :02:36.of its market value this year. Deposits have been
:02:37. > :02:38.flowing out of the bank. This week it warned the money
:02:39. > :02:41.could run out within four months. The terms of this bailout could be
:02:42. > :02:44.politically explosive. Under EU rules, private investors
:02:45. > :02:46.have to suffer losses before Some 40,000 private
:02:47. > :03:14.investors hold Monte bonds. On Thursday, people in Siena
:03:15. > :03:25.were expressing their anger TRANSLATION: There has been a lot of
:03:26. > :03:30.uneasiness, uneasiness at all levels. Firstly from an emotional
:03:31. > :03:34.point of view, because Monte dei Paschi was the true daddy of the
:03:35. > :03:39.city, and it has been robbed in a very traumatic way. TRANSLATION: I
:03:40. > :03:42.really hope that Monte dei Paschi is able to save itself without the
:03:43. > :03:47.state stepping in. Firstly, for the pride of the city, also because I
:03:48. > :03:55.doubt the state can improve the situation. The State would not stay
:03:56. > :03:57.in the bank. Siena has lost its bank and it will never be able to recover
:03:58. > :03:59.it, so it is agonising. Jasper Lawler, senior market analyst
:04:00. > :04:06.at London Capital Group. Great to have you here, thank you
:04:07. > :04:11.for coming in at this ungodly hour on Friday. A lot of these private
:04:12. > :04:15.investors, as you and I were saying before we came on, are pensioners.
:04:16. > :04:21.This is going to go down like a led Zeppelin, surely? That is the big
:04:22. > :04:27.points, the European Union require that investors take some of the hit
:04:28. > :04:32.for taxpayers have to pay. And fair enough, really. Why these banks need
:04:33. > :04:35.money is to pay off these are non-performing loans, they need
:04:36. > :04:39.money to sell these non-performing loans to people who are Axa going to
:04:40. > :04:47.use it so they can start lending again, but why should they have two
:04:48. > :05:01.pay? -- who are actually going to use it. There has been a fudge
:05:02. > :05:05.-a-rama in Europe. That is not all the investors, different kinds of
:05:06. > :05:09.investors here, junior and senior bondholders. The junior ones are the
:05:10. > :05:12.ones which will get hit. That is mostly the pensioners. And so
:05:13. > :05:17.ordinarily they would just have to live with that, but obviously that
:05:18. > :05:23.is politically toxic. You have the Five Star movement in Italy, which
:05:24. > :05:26.would take advantage of their lost money. What they are going to do is
:05:27. > :05:30.compensate those pensioners for their losses, the reason being that
:05:31. > :05:34.those pensions were mis- sold in the first place. These pensioners should
:05:35. > :05:40.not have been holding this kind of risky debt in the first place. Like
:05:41. > :05:46.a PPI repayment, if you will. This is the third bailout for this bank.
:05:47. > :05:50.Some would say when do you call it a day? On top of that, at this
:05:51. > :05:53.particular period of time, this is one of maybe eight banks which
:05:54. > :05:59.neither bailout at the moment. Absolutely. This is the third
:06:00. > :06:03.bailout for Monte dei Paschi, and I would say it is the third time I
:06:04. > :06:07.would say just let the thing go. Compensate depositors, make sure
:06:08. > :06:10.they have money, make sure the pensioners are not at risk. But
:06:11. > :06:15.every other investor, they won't like me saying this, but they took a
:06:16. > :06:18.risk by investing in the bank and at this point it has shown itself to be
:06:19. > :06:22.beyond recovery. Obviously these other banks are in trouble as well.
:06:23. > :06:28.Very briefly, do big problems in Italian banks equal big goblins for
:06:29. > :06:32.all of us, European banks? They have this the shown they can't raise
:06:33. > :06:36.money privately so that sets the precedent for other bailouts, not
:06:37. > :06:41.just for banks in Italy, at this non-performing loan issue is not
:06:42. > :06:47.just Italy. They make up about 40% of the non-performing loans in
:06:48. > :06:51.Europe but 60% elsewhere. So there will be bailouts elsewhere. In those
:06:52. > :06:55.occasions we can't be sure that these junior bondholders are going
:06:56. > :06:59.to be saved, and that will be obviously a problem politically in
:07:00. > :07:02.Europe. Thank you very much and Merry Christmas, by the way. Merry
:07:03. > :07:04.Christmas. Have a good one. To the US now, and as we were
:07:05. > :07:08.reporting this time yesterday, President-elect Donald Trump has
:07:09. > :07:10.chosen Peter Navarro, an economist fiercely
:07:11. > :07:12.critical of China, to head The appointment comes on top
:07:13. > :07:16.of his combative remarks during the election campaign
:07:17. > :07:19.about the impact of Chinese imports So are we facing the real prospect
:07:20. > :07:24.of a trade war between the world's Our economics editor
:07:25. > :07:40.Kamal Ahmed reports. It was a major theme of the
:07:41. > :07:46.presidential campaign, an America that had lost its way. Globalisation
:07:47. > :07:52.and the rise of China being blamed for economic stagnation and millions
:07:53. > :07:56.of jobs lost. Today, President elect Trump showed his hand, appointing
:07:57. > :08:02.the Economist Peter Navarro as his new trade adviser. Peter Navarro is
:08:03. > :08:08.clear where he feels the fault lies. Every job that American corporations
:08:09. > :08:15.offshore to China or some other country becomes less of reason to up
:08:16. > :08:20.here and fight for fair trade practices. President-elect Trump is
:08:21. > :08:25.following through on his campaign pledges. We can't continue to allow
:08:26. > :08:30.China to rape our country, and that's what they're doing. America
:08:31. > :08:34.and China are the world's two largest economies. If a trade war
:08:35. > :08:41.broke out it could affect global growth. The trade between them is
:08:42. > :08:47.huge, it is valued at $660 billion. US exports to China are valued at
:08:48. > :08:52.$162 billion. The country is America's third largest export
:08:53. > :08:56.market but imports from China into America are far higher, standing at
:08:57. > :09:02.498 billion dollars. And this, according to President elect Trump,
:09:03. > :09:08.is the problem. A trade deficit with China totalling $336 billion. Mr
:09:09. > :09:15.Trump says closing that gap would create a lot of jobs in America. At,
:09:16. > :09:19.although people may blame outside forces, economists argue that the
:09:20. > :09:25.jobs market has changed and that cheap goods from China have been
:09:26. > :09:36.good for hard-pressed US consumers. China, it may be just a, Eno, we
:09:37. > :09:40.challenge them on some policies and they may announce retaliations, they
:09:41. > :09:44.may not, but it looks like quite a bit of friction with China in the
:09:45. > :09:50.months ahead. China's response, as ever, cautious. At caution with an
:09:51. > :09:54.edge. China does not appreciate being called an economic bully.
:09:55. > :10:00.TRANSLATION: China and the United States as two large countries have
:10:01. > :10:08.shared interests. Cooperation is the only choice. With Trump's promises
:10:09. > :10:10.ringing in voters' is, fears of a trade war between two global
:10:11. > :10:16.economic giants can only increase. In other news: Deutsche Bank says it
:10:17. > :10:19.has reached a settlement with the US Department of Justice
:10:20. > :10:22.over its sale of mortgage-backed Under the terms of the agreement,
:10:23. > :10:27.it will pay a civil penalty of $3.1 billion and provide $4.1 billion
:10:28. > :10:30.in consumer pay-outs That is around half the $14 billion
:10:31. > :10:34.settlement the DoJ originally The US Department of Justice
:10:35. > :10:42.is widening its net It is now also suing
:10:43. > :10:48.Barclays for alleged It claims that Barclays misled
:10:49. > :10:52.investors about the quality of loans backing securities it sold in
:10:53. > :10:55.the run-up to the financial crisis. Barclays rejected the claims,
:10:56. > :10:57.saying they were disconnected Planned strikes by British Airways
:10:58. > :11:02.cabin crew on Christmas Day Employees were due to walk out
:11:03. > :11:07.in a row over pay and conditions. According to the Unite trade union,
:11:08. > :11:10.4,500 workers employed on so-called mixed fleet contracts,
:11:11. > :11:12.who have joined since 2010, Talks at Britain's industrial
:11:13. > :11:16.conciliation service, Acas, have led to a revised offer,
:11:17. > :11:19.which will be put to a ballot The airline says it
:11:20. > :11:22.welcomes the move. Don't forget, you can get
:11:23. > :11:31.in touch with me and some I will be back to have a look at the
:11:32. > :11:32.papers from around the world.