19/01/2017 World Business Report


19/01/2017

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Now for the latest financial news with World Business Report.

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Brexodus fears grow in the City of London, as leading firms warn

:00:00.:00:17.

thousands of staff may now be relocated.

:00:18.:00:24.

No arrest warrant for Samsung boss Jay Y Lee.

:00:25.:00:27.

but prosecutors vow to continue the corruption

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We'll be live in Seoul in just a moment.

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We start here in London, where fears of a costly Brexit

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Leading firms are now weighing up moving thousands of staff out

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of the UK, after Prime Minister Theresa May confirmed plans to leave

:01:04.:01:06.

the European Single Market as well as the EU,

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On Wednesday, the boss of HSBC said he's preparing to move

:01:10.:01:15.

around 1000 of his 5000 London staff to Paris.

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That would mean around 20% of its European revenue leaving

:01:19.:01:20.

the UK, worth several billion dollars.

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also told the BBC that 1000 jobs may go in London as a result of Brexit,

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again around a fifth of its workforce.

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And according to a report in the Handelsblatt newspaper

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in Germany this morning, Goldman Sachs may halve its London

:01:32.:01:34.

workforce, moving 3000 staff to New York and Continental Europe,

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Goldman though says it has yet to make a decision on the matter

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However, some believe this could be the tip of the iceberg

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Back in October, consultants Oliver Wyman warned 75,000 UK

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jobs are at risk if financial companies based here lose the right

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Theresa May is addressing the World Economic Forum

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in Davos today, she will also be meeting the bosses of some

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of the big banks including Goldman Sachs and JP Morgan

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Yesterday, Pierre Moscovici, former French Finance Minister,

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now EU commissioner for Economic and Financial Affairs,

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Taxation and Customs, spoke to our economics

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He denied the EU would try to punish Britain for leaving the EU.

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It is not about punishment. I said that we need to find a balanced and

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positive agreement. I said we are friends and must work together. They

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even said so in the European Parliament this morning in Davos.

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But we must be clear that you cannot have all the advantages of being a

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member of the club when you are out of the club. Our British friends

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will bleed invented clubs. -- probably. They can understand that.

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There you. That is one view. And now for another view.

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Olivier Vardakoulias is Senior Economist

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The plot has thickened. No surprise at all to hear some of the big

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banks, global banks, who have big operations in London, are now

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rethinking. Yes. That is because they perceive she has made

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unattainable pledges. She will go for a hard Brexit, exiting the

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Common Market and the EU and also the common union. What they are

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afraid of, and rightly so, is basically that this will not

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guarantee the so-called passport writes. Explain those rights for

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those uninitiated in financial services. Any bank located, or

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investment bank, located in the country, has the right to do

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business in any European country, without needing to have an agreement

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with individual member states of the EU. That is why, for example, you

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have many American investment banks based in London. That is because

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they can do business in whatever European country freely. That will

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not be the case if the UK does not manage to reach a special agreement

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for accessing the special European market. These banks will have to

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negotiate and basically the UK will have to negotiate individually with

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different member states. Quite frankly, the easy solution for these

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banks is to relocate part of their activities on the continent. Not all

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of them, part of them. It is interesting. When you look at the

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sentiment from both sides, like Donald Tusk saying it will be a

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difficult negotiation process, Theresa May saying if they do not

:05:29.:05:33.

get the vote they want they will exit completely. In that situation,

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what do we see for the future of the city of London in terms of how it

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will operate? She implied in her speech that she will change the

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goalposts in terms of how things go in London, taxing, regulation, so it

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becomes better on the ground. Yeah. I think there are two things here.

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Political posturing, if you want. On the one hand, you know, the way that

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Theresa May presented that to European partners is that they will

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withdraw from the European Court of Justice and so on. And then I will

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try to basically seek market access without being part of the EU. And if

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you do not do what I want, we will move offshore. Basically a tax haven

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in the UK, that kind of model. She will try to liberalise the financial

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sector even more, at our risk and peril, as the 2008 crisis showed,

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and replaced the job losses from respectable bank activities by

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attracting things like hedge funds or other financial activities. Now,

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this is a very risky strategy. Not just because obviously it can

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trigger different kinds of financial fragility within the system, but it

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is also bad news for British working families. Turning the UK into a bank

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haven will not help those who voted to leave the EU. Very interesting.

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Thank you for your time today. I am sure I will talk to you again before

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we leave the EU officially. Thank you for coming in. We will go to

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South Korea next. That is where a growing

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corruption scandal has led to the impeachment

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of President Park Geun-hye, and has been threatening to suck

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in the boss of Samsung, Some good news for him

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in the past few hours though. Mr Lee was held by prosecutors

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overnight on Wednesday, but early this morning he's been

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allowed to go home after a court in Seoul threw out

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a warrant for his arrest. Prosecutors wanted him arrested

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on suspicion of bribery, embezzlement and perjury,

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charges he denies. Let's talk to the BBC's

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Kevin Kim in Seoul. He has been covering this for us. I

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hope you are there. Tell us more about the latest and what happens

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today. The last 24 hours were some of the longest and most dramatic for

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Jay Y Lee. At the city jail, the head of the biggest company in South

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Korea waited through the night until there was a decision to release in.

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Early in the morning the judges said there was no sufficient reason to

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put him behind bars. He was then seen walking out of jail with a

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slight smile. Apparently he then went straight to work. I understand

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the prosecutors are saying we will pursue this. We will not waver. They

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seem to be very determined despite the decision of the judge. That is

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correct. The message Jay Y Lee wanted to send is business as usual.

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But this may not be the end of the problems for the chief of Samsung.

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The company has been accused of bribery. He may still have to face a

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trial if prosecutors face charges. The allegations are that he gave

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millions of dollars in return for the votes of the national pension

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fund in a big restructuring of the company. But in the meantime, Jay Y

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Lee still stays a free man. Great to talk to you again. Thank you for

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now. He was in Seoul for us. Squeezing in some other stories.

:09:34.:09:35.

Renegotiating the Nafta trade deal with Canada and Mexico is the Trump

:09:36.:09:39.

administration's top trade priority, according to commerce secretary

:09:40.:09:41.

He was speaking to US senators at a confirmation hearing

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Mr Ross said China was the "most protectionist" country among large

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economies, but said Nafta is "logically,

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the first thing for us to deal with."

:09:51.:09:56.

Shares in TV streaming service Netflix soared as much as 9%

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on the news it is growing much faster than expected.

:10:00.:10:02.

Netflix added just over seven million new subscribers in the last

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three months of 2016, a third more than forecast,

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and expects to break the 100 million mark by the end of March.

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Netflix has invested heavily in original content while ending

:10:12.:10:13.

deals with top studios, a gamble that is paying off.

:10:14.:10:27.

Financial markets. A mixed day. Good news for Japan. The Japanese yen

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weakening. You can see the pound is keeping a close eye on it. Janet

:10:38.:10:42.

Yellen talking yesterday in San Francisco saying that rates in the

:10:43.:10:45.

US could be up again. They are predicting the month of March. That

:10:46.:10:51.

is what is happening. I will see you again soon as we will review the

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stories in the news in just a moment.

:10:57.:11:02.

A disabled man has won his case at The Supreme Court,

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after a dispute over wheelchair space on a bus.

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It means bus drivers will have to do more

:11:08.:11:11.

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