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Those are the new headlines. And now for the biggest business stories. | :00:00. | :00:14. | |
Hopes of a European mega-exchange between London and Frankfurt | :00:15. | :00:16. | |
The London Stock Exchange says the regulatory hurdles are too high. | :00:17. | :00:24. | |
Nokia hopes to revive its flagging fortunes as it resurrects | :00:25. | :00:32. | |
We'll get a hands-on preview from The Mobile World Congress in | :00:33. | :00:36. | |
Welcome to World Business Report. I'm Sally Bundock. | :00:37. | :00:52. | |
In a minute, we'll look at the potential collapse | :00:53. | :00:54. | |
of the merger between the London Stock Exchange and Deutsche. | :00:55. | :00:57. | |
The clock is ticking, with speculation mounting the UK | :00:58. | :01:00. | |
Prime Minister may trigger Article 50 on the country's departure | :01:01. | :01:03. | |
from the European Union in early March. | :01:04. | :01:04. | |
Since the referendum, there have been major concerns | :01:05. | :01:07. | |
in London it could lose its position as Europe's financial capital. | :01:08. | :01:10. | |
But one of Germany's most senior central bankers tells us why | :01:11. | :01:13. | |
he believes the city will retain its crown. | :01:14. | :01:24. | |
At present, Britain benefits from so-called "Passporting Rights" | :01:25. | :01:26. | |
which allow UK-based banks free access to the European Union. | :01:27. | :01:29. | |
The City of London's main industry lobby group appears to have given up | :01:30. | :01:33. | |
hope on maintaining these rights and is now campaigning | :01:34. | :01:35. | |
for "equivalency" to form part of the UK's package when it leaves | :01:36. | :01:38. | |
Equivalency is a relatively new legal concept which allows | :01:39. | :01:46. | |
companies to trade freely within the EU, assuming it has | :01:47. | :01:48. | |
But the Financial Times is reporting this diluted equivalency agreement | :01:49. | :01:52. | |
may be tougher on Britain than was previously thought. | :01:53. | :01:55. | |
Andreas Dombret is a board member of the Bundesbank that oversees | :01:56. | :01:58. | |
He told the BBC he is open to consulting with banks wishing | :01:59. | :02:02. | |
to relocate to Frankfurt, but he also issued a warning. | :02:03. | :02:28. | |
From a German perspective, should a business or a bank be looking | :02:29. | :02:37. | |
towards moving to Germany, we will not accept empty shells, letterbox | :02:38. | :02:44. | |
companies. We will make sure that the management, the controlling, the | :02:45. | :02:48. | |
risk controlling, etc, is done out of Germany. That does not mean we | :02:49. | :02:54. | |
would have back-to-back booking models. But the structures and all | :02:55. | :02:59. | |
the like is not something we would forgive. Andreas Dombret from | :03:00. | :03:14. | |
Bundesbank. It's also being reported this | :03:15. | :03:15. | |
morning the $31 billion merger of the London Stock Exchange | :03:16. | :03:17. | |
and Deutsche Boerse could collapse. It looks like the regulatory hurdles | :03:18. | :03:20. | |
are too high ending the companies efforts to create | :03:21. | :03:23. | |
a European mega-exchange. Peter Hahn is the Henry Grunfeld | :03:24. | :03:25. | |
Professor at The London Institute Good morning. Good morning. Good to | :03:26. | :03:33. | |
see you. Let us start with the exchanges. Are you surprised they | :03:34. | :03:35. | |
will not come together eventually? No. It is an amazingly complex | :03:36. | :03:40. | |
issue, especially with Brexit. It was a contest in a certain way | :03:41. | :03:44. | |
between Frankfurt and London for dominance. London was going to get | :03:45. | :03:50. | |
the overall holding company. That was always presented, first with | :03:51. | :03:55. | |
Germany and Brexit, and the bigger issue. What they are relying on is | :03:56. | :04:04. | |
something more complex than a merger problem, a set of activities and a | :04:05. | :04:08. | |
merger that has to happen. The city of London and the whole Brexit | :04:09. | :04:13. | |
negotiations. As we mentioned, Theresa May is likely to trigger | :04:14. | :04:17. | |
Article 50 in March, just a few days away, the month of March. This stops | :04:18. | :04:21. | |
the process of the negotiation, the exit of the EU, and will take up to | :04:22. | :04:28. | |
two years. Now, there is so much to negotiate within that. But the city | :04:29. | :04:33. | |
of London is incredibly important, isn't it, to the UK economy, that | :04:34. | :04:39. | |
they get a great deal. It is a major taxpayer, a disproportionately large | :04:40. | :04:43. | |
one. Just from the income of business is. But from the people who | :04:44. | :04:48. | |
work in the city as well, it is substantially above average and they | :04:49. | :04:51. | |
pay a lot of income tax. We talked about the Passporting Rights issue | :04:52. | :04:57. | |
and this so-called new equivalency, which is not quite an equivalency. | :04:58. | :05:05. | |
Talk us through these two and what the outcome might be. Passporting | :05:06. | :05:10. | |
Rights simply says that a bank in any EU country is able to do | :05:11. | :05:14. | |
business in another EU country without having to set itself up and | :05:15. | :05:22. | |
get a separate licence, et cetera. Equivalence means my country has | :05:23. | :05:26. | |
rules and your country should have equivalent rules to ours. Even if | :05:27. | :05:31. | |
they are not the same. Therefore, you can do business in my country | :05:32. | :05:36. | |
and vice-versa. It has all been a kind of tentative races and hasn't | :05:37. | :05:42. | |
really worked out. -- process. Because of that it could almost be | :05:43. | :05:47. | |
shut off. 30 days if you do not like it. That has always been a bit of a | :05:48. | :05:56. | |
charade. We have been trying to see the outcome but I do not know. What | :05:57. | :06:00. | |
about the rules of banks operating outside London? It is important to | :06:01. | :06:04. | |
London, but also to Europe, that it works well. Andreas said it clearly. | :06:05. | :06:12. | |
Europe expects, and Germany in particular, he was almost speaking | :06:13. | :06:16. | |
for Germany, it wants fully operational businesses to move to | :06:17. | :06:21. | |
Germany, and not come from the UK any more. And that is relatively | :06:22. | :06:26. | |
similar to the way Europeans do business in the US. Now, the US, a | :06:27. | :06:34. | |
European bank of any size, it supposed have what is called an | :06:35. | :06:37. | |
intermediate holding company, and that means a separate bank that is | :06:38. | :06:41. | |
rig goodbye the United States. And that is what we are moving to with | :06:42. | :06:52. | |
the use. -- that is seperate to the United States. There is a lot more | :06:53. | :06:57. | |
detail and more of the interview on our website. Do take a look. Now, | :06:58. | :07:05. | |
let us talk about Nokia! Nokia used to be synonymous | :07:06. | :07:06. | |
with the mobile phone. And HMD, the company which recently | :07:07. | :07:09. | |
bought the rights to the Nokia brand, is hoping a blast | :07:10. | :07:12. | |
from the past will restore The handset on the left may not look | :07:13. | :07:15. | |
immediately familiar to you. But the handset on the right | :07:16. | :07:20. | |
should ring some bells. Nokia is resurrecting its iconic | :07:21. | :07:23. | |
3310 model, but the latest version has a battery that can last | :07:24. | :07:26. | |
an entire month on a single charge. That's Mobile World | :07:27. | :07:27. | |
Congress in Barcelona. Rory Cellan-Jones sent us this | :07:28. | :07:29. | |
report from The Mobile World Barcelona. And as the mobile phone | :07:30. | :07:38. | |
industry arrives for its annual jamboree, there is the starter in | :07:39. | :07:45. | |
the air. SINGING THE NOKIA TUNE. Nokia is making a comeback. This was | :07:46. | :07:52. | |
its first chance to make a big splash. And with a range of new | :07:53. | :08:00. | |
smartphones, it brought out something very retro. Let me | :08:01. | :08:07. | |
reintroduce the Nokia 3310. You cannot do much with this phone | :08:08. | :08:12. | |
except make calls and play a game of Snake, but the battery lasts | :08:13. | :08:20. | |
forever. We ask consumers what is the best iConnect device from Nokia? | :08:21. | :08:25. | |
We thought, let us have some fun and be creative with this device. This | :08:26. | :08:31. | |
may be fun, but let us face it, it is a gimmick. If Nokia wants to be a | :08:32. | :08:35. | |
major force in the world again, it will not be because of the 3310, but | :08:36. | :08:42. | |
a new range of Android smartphones. This is already selling well in | :08:43. | :08:47. | |
China. But in a market where it smartphones all look the same, the | :08:48. | :08:50. | |
market is tough. They had to look backwards as well as forward. By | :08:51. | :08:55. | |
bringing out this truly iconic device with bags of nostalgic, for | :08:56. | :08:58. | |
many people it was their first mobile phone, it captures the | :08:59. | :09:03. | |
attention of the people and let them know that Nokia is back. Will | :09:04. | :09:14. | |
would switch my phone. Even if it had no Internet? Yes. I would change | :09:15. | :09:23. | |
my mind. Here is another phone making a comeback. This is the | :09:24. | :09:33. | |
Blackberry 31 launched by a Chinese firm. Two big names making an | :09:34. | :09:37. | |
unlikely bet they could be big again in the future. BBC News, Barcelona. | :09:38. | :09:43. | |
And there is a lot more on the website. Take a look. From me, it is | :09:44. | :09:50. | |
goodbye. But I will be back soon to look at the papers. See you then. | :09:51. | :10:02. | |
Chancellor Philip Hammond should make schools a priority | :10:03. | :10:04. | |
in the budget, according to a teaching union | :10:05. | :10:06. | |
and the National Association of Governors are calling for. | :10:07. | :10:10. |