AUDIO: Autonomy due to decide on HP bid

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3 October 2011 Last updated at 11:33 GMT Help

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Fears over debt Chinese surface

October 6, 2011, last updated 04: 28 GMT China market with deep pockets could see slow growth and buoyant, China touted as a White Knight in the world.

But fears are growing that the country can meet its debt crisis as its economy and signs of a slowdown.

Prime weekend urged stronger financial support for small businesses that are missing.

Its a conversation between reports many factories of the private sector are facing bankruptcy due to tightening credit, informal lending operations.

In the eastern city of Wenzhou, a fifth of small businesses to midsize, 360,000 city stops due to lack of cash, reported by China's official Xinhua News Agency on Thursday.

"Efficient means must be taken to contain the trend of usury, crack on illegal fund-raising and handle correctly the problem of collateral, lack of capital to prevent risks from spread and develop regional scale," said Mr. van when visiting the city.

According to media reports, more than 80 businessmen fled town bakpa loans taken from underground banks, owner of a shoe one jumped off a building and killed himself.

' Time bomb '

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we take informal lending market most likely short-term time bomb of China's economy, "

end quote Dong Tao, Credit Suisse economists believe it could be the start of a wave of Corporate bankruptcies.

A central concern of China loan informal or shadow banking market-rich individuals and businesses that offer loans at interest rates spanning from 14% to 70%.

Companies and entrepreneurs have turned in this underground, with Chinese banks tightening lending as part of the Government's fight against inflation.

Credit Suisse says it sector statistics was rare, but as total 4 trillion yuan ($ ￡ 627bn; 406bn) is equal to 8% of the formal banking sector-and loans may increase by 50% per year.

He estimates that 60% of informal loans to property developers have with the rest going to other small businesses that need loans bridge.

"We consider formal lending market most likely short-term time bomb of China's economy," Tao Dong, Asia Economist at Credit Suisse, said the report.

"Beijing take decisive measures to deal with active, problem, or the credit crisis is species emerge in our opinion," he says.

Default swaps

Fears of economic slowing down in China has also fuelled a rise in trade of credit default swaps are financial instruments which insure against-risk of debt defaults.

The net value of credit default swaps outstanding bahov Chinese Government rose to US $ 3bn, compared to $ 6bn. two years ago, the Financial Times reported on Thursday.

Investors are worried that China's economy could have a "hard landing" slowed suddenly after years of blistering growth.

The property market is considered to be particularly vulnerable, with home prices soaring over the past two years.

The State raised interest rates three times so far this year and ordered banks to increase their reserves and six times during the same period.

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Lecturers' pension action resumes

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6 October 2011 Last updated at 23:01 GMT The dispute could escalate to new strikes, the UCU said Lecturers at 67 UK universities are going to re-start a programme of industrial action from 10 October over changes to their pension scheme.

They will start a "work to contract" if the universities do not resume negotiations over the pension changes.

Substantial cuts to the benefits of the Universities Superannuation Scheme (USS) were introduced on 1 October.

The University and College Union (UCU) said 40,000 members at the affected universities might eventually strike.

The union's general secretary, Sally Hunt, said the aim was to force the university employers to renegotiate some of the changes they have just brought in.

"There are key areas that we believe need to be looked at again," she said.

"Examples being accrual rates and another example being redundancy payments for those who are 50 and 55."

The dispute affects staff at the 67 traditional universities which were in existence before 1992, when the former polytechnics and higher education institutions were upgraded to university status.

'Sustained campaign'

The industrial action may be a precursor to more widespread action which has been threatened by unions with members in other parts of the public sector, such as local government, the civil service, NHS, schools, police and the fire service.

The government is trying to press ahead with substantial increases in staff pension contributions, to be followed by full-scale conversion of most of the schemes from their current final-salary basis to become less generous career average schemes.

The lecturers' industrial action will start with a "work to contract" which the UCU said would be the start of a "sustained campaign of industrial action".

Depending on local employment conditions, this might include union members working no more than their contracted hours, not covering other lecturers' classes, and refusing to carry out any additional duties or attend voluntary staff meetings.

"This will affect the universities in very different ways," said a spokesman for the employers body the UCEA (Universities and Colleges Employers Association).

"The changes would be considered moderate by many as they include the retention of a final salary pension for all existing USS members."

The UCU said if the employers refused to start negotiating again at a scheduled meeting later this month, the action might be escalated to a boycott of internal administration, student assessments and even rolling strikes.

Second campaign

The USS pension scheme has 137,000 contributing members at nearly 300 education institutions.

One-day strikes in March, at universities around the country, failed to deter the employers from pressing ahead with the bulk of their pension changes, which have been in train for three years.

So the UCU held a second industrial action ballot last month, which produced a 77% vote in favour on a 42% turnout - even higher than in the union's first ballot earlier this year.

The union said the some of its members would lose ￡100,000 of their pension income over their prospective retirement as a result of the changes.

It said the employers' private aim was to make huge savings by cutting their contribution rate from about 16% of staff salaries to just 10%.

This might be achieved, the UCU said, if the university employers were able, in a few years' time, to impose the career average scheme for new recruits on existing staff as well.

Big changes

The USS changes were brought in from 1 October in a separate process to the one the government has initiated for the other big public sector pension schemes.

The university pension changes were changes were:

A normal pension age of 65 came in for new entrants and for the future service of many existing members. The exceptions to this are those members who were in the scheme before 1 October - and who were also aged 55 or over at that date. They will be exempt from the normal reductions in their accrued pensions that will be imposed if they take their pensions before the age of 65. The normal USS pension age will rise in line with any increases in the state pension age, which is scheduled to rise to 66 by 2020. It is important to note that this will only affect pension built up after April 2020.The employee contribution rate for members of the final-salary section has gone up from 6.35% to 7.5%. Pension increases (for pensions in payment and deferred pensions) will now be inflation-proofed in line with increases in the consumer prices index (CPI) up to 5% a year. But for pensions earned after 1 October 2011, if inflation is more than 5% but less than 15%, the increase in pension will be 5% plus half of the increase above that level. And if inflation is more than 15%, there will be no extra pension increases - they will be capped at 10% a year.A career-average revalued earnings (CARE) benefits structure has been introduced for new entrants. The benefits are still be based upon a 1/80th accrual rate and cash lump sum of three times the pension.The contribution rate for members of the new CARE section is 6.5%. If the overall cost of the scheme rises above 23.5% of salaries, then "cost sharing" will be introduced. This means any further increases in contributions will be shared in the ratio 65:35 between employers and employees respectively.

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Could impact investing help India's poor?

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29 September 2011 Last updated at 08:34 GMT By Shilpa Kannan BBC News, Delhi Virender wants to grow his business of recycling plastic Sorting out plastic bags collected from rubbish tips is a serious business for Virender Kumar.

Sitting on a pile of plastic bags, he is busy giving directions to the labourers he employs to help him with the recycling.

Once the bags are sorted, he sells them to recycling units to be melted down into plastic pellets.

He makes about 20,000 rupees ($410; ￡262) profit every month. But he has bigger ambitions that need funding.

He says that by working overtime, he saved money to start the recycling unit. But now he wants to hire more people and expand the business.

"But everything needs money," he says. "Banks don't lend to people like me."

India's growing middle class has been a target for many companies, but now another segment of society is increasingly becoming a focus for investors - people living below the poverty line.

But can businesses make a profit and also serve a social purpose?

Loan controversy

People like Mr Kumar are now being wooed by financial institutions such as the Shriram Group.

While millions of people across India have little or no access to formal finance, investment funds which want to make a social impact are lending a helping hand.

These funds invest in people and sectors that traditional banks ignore. It is called "profit with a purpose".

But they are using insurance as a means of helping small businesses rather than loans.

Microfinance, or giving small loans to low-income borrowers, has received a lot of bad press in India recently.

The sector was booming until a spate of suicides by borrowers in the southern state of Andhra Pradesh led to the authorities tightening regulations.

At its peak, the microfinance sector saw almost $7bn in loans distributed to 30 million borrowers, and Andhra Pradesh accounted for a third of the total business.

As a result of the new laws, debt repayments fell drastically and the entire sector is now facing a massive consolidation, and many lenders have been forced to shut up shop.

Microinsurance is different from microfinance as this provides a safety net to prevent people from falling back into poverty.

The International Labour Organisation describes microinsurance as a mechanism to protect poor people against risk (accident, illness, death in the family, natural disasters etc) in exchange for insurance premium payments tailored to their needs, income and level of risk.

If a person earns $5 a day, making $150 a month, and a typical insurance product is under $4 a month, that person is able to, with that very limited amount of capital, free their family up substantially.

Having that extra protection means that instead of sending the children to work to save for a rainy day, they can send them to school.

Capital injection

Leapfrog is a $135m US-based impact investment fund that was set up to invest in companies that underwrite or distribute insurance.

The fund is backed by billionaire George Soros and e-bay founder Pierre Omidyar, as well as a consortium of banks, pension funds and reinsurers.

Leapfrog says that it is a big myth that because people have low incomes they are unable to pay for meaningful products.

"We are looking at the next billion consumers," said Andrew Kuper, co-founder of Leapfrog.

"The consumers who are rising out of poverty and into the middle-classes… aspiring, seeking to acquire financial services and other services that allow them to go on their journey in a more effective way."

He thinks businesses that serve that segment are going to have a massive competitive advantage.

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The ability with a very small percent of your income to totally reshape your microeconomic picture is a huge opportunity”

End Quote Andrew Kuper co-founder, Leapfrog "The ability with a very small percent of your income - less than 4% - to totally reshape your microeconomic picture and the daily choices that you and your family make is a huge opportunity.

"What isn't happening is companies getting to grips with the notion that you can serve that population, and we find that it is a very narrow slice of companies. Fortunately we are engaging with them."

More than 85% of Shriram Group's customers are first-time buyers of any financial product. It is the first provider to more than 98% of its customers. The group hopes that the capital injection from Leapfrog will benefit 10 million people in India.

G S Sundararajan, managing director of Shriram Capital, says his company is targeting people with an average annual income of $2,500.

"We already offer financing and investment services to the lower-income masses across India. Now, we plan to increase it even further. We'll be using Leapfrog's expertise to design new insurance products that are more effective for our existing consumers."

Huge potential

Microinsurance is not a new concept in India. The country was one of the first to introduce microinsurance regulation.

The Insurance Regulatory and Development Authority (IRDA) made it mandatory for all formal insurance companies to extend their activities to rural and social sectors as early as 2002.

But microinsurance companies face a huge challenge in connecting with customers. Many companies have been trying creative ideas - for example, the Shriram group is using its transport finance wing to connect with truck drivers and sell products to them.

India's biggest fertiliser company, IFFCO, provides free insurance cover to farmers along with each bag of fertiliser purchased. It has a joint venture with Tokio Marine and Nichido Fire Group, the largest listed insurance group in Japan.

It also provides a cattle insurance policy that covers the death of the animal due to accident, disease, surgical operations, strike, riots and even acts of terrorism or an earthquake.

A loan increased Virender's profits by 50%, by helping to pay for a new truck

The potential is huge. A study by the United Nations Development Programme (UNDP) in 2007 reported that up to 90% of the Indian population, or 950 million people, were excluded from the insurance market and represented a powerful "missing market".

But the private sector is risk-averse when it comes to investing in such people.

And just government resources and charitable donations cannot address the enormous social problems the country faces. Impact investments offer an alternative.

Reducing poverty

Recognising this growing segment, the biggest newspaper in the country, The Times of India, in association with J P Morgan, has announced awards for social impact.

Rahul Kansal is the organiser of the awards and he says that there are opportunities beyond just microinsurance for social impact in the country.

He says that large scale private capital can be channelled to public works.

"Increasingly we are seeing that in a country like India, there are avenues like healthcare, education, civic areas like waste management which need attention."

"The government cannot cope with the size of the problem. This is where organisations both for profit and non-profit can step in."

He thinks this large-scale neglect and need could be the next big investment opportunity.

A loan helped finance a new truck for Virender Kumar, increasing his profits by more than 50%. But he has also got life insurance and accident cover that came bundled with his truck financing, to protect his family.

It is people like him that are benefiting most by impact investments. Reducing poverty requires not just the generation of income among the poor, but also the protection of these incomes.

They are people who are making the transition from the informal to the formal economy - and bringing financial products to them gives them a chance to be included in the country's rapidly growing economy.

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UK banks hit by Moody's downgrade

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7 October 2011 Last updated at 07:19 GMT Shares in Royal Bank of Scotland have opened sharply down following the downgrade Moody's has downgraded the credit rating of 12 UK financial firms including Lloyds, RBS, Nationwide, and Santander.

Moody's said it now believed the UK government was less likely to support some firms if they got into trouble.

However, the firm emphasised that the downgrades did not "reflect a deterioration in the financial strength of the banking system".

The news sent bank shares lower, with RBS 3.8% off and Lloyds 3.36% down.

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VIDEO: Cargill chief executive on its success

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29 September 2011 Last updated at 08:43 GMT Help

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VIDEO: Eurozone troubles worry Australia

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4 October 2011 Last updated at 01:21 GMT Help

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Where are the Occupy Wall Street protests heading?

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3 October 2011 Last updated at 22:58 GMT By Laura Trevelyan BBC News, New York Commentators are wondering if this movement could become a "Tea Party" for the left As a man known as Mercury puts the finishing touches to his corporate zombie make up, he explains why he's joined the anti-capitalist protests here in the shadow of Wall Street.

"We are inspired by the Arab Spring. Americans have rights but they're too often apathetic."

Welcome to Zuccotti Park, where the leaderless protest is now entering its third week.

Sophie is here to protest about the execution of a Georgia man, Troy Davis.

Will Estrella believes this is his generation's revolution.

And Brian Phillips, a marine turned housing community official, wants to see the Federal Reserve abolished.

The protesters aren't unified in their motivations or their demands, but they're tapping into discontent about inequalities in an America still struggling after one recession and fearful about entering a second.

'We're the 99%'

Brian Phillips, who wears his marine dog tags round his neck, says he has been lied to all his life by officialdom and he's had enough.

The protesters want a change in political and economic culture

That's what made him leave Washington state and his job at a low-income housing unit to come here.

Now Brian is efficiently dealing with media requests.

I tell him that I want to speak to one of the 700 arrested on Brooklyn Bridge on Sunday.

"Arrested Sunday!" calls Brian. Two young men step forward for me to interview.

That's how we communicate, Brian explains, with marine-like efficiency, as to his left a group start the day with yoga.

Police officers stand at the edges of the protesters' encampment, and today at least relations seem cordial enough.

But on Saturday the demonstrators say the police ushered them on to a roadway section of the Brooklyn Bridge rather than the pedestrianised walkway, fenced them in and then arrested them for disorderly conduct.

The NYPD says this isn't correct, and has released a video of the police telling the protesters not to go on the roadway section of the bridge.

Freelance photographer Will Estrella says the police clearly guided him and others on to the bit of the bridge they weren't meant to be on.

The NYPD's tactics for policing this protest have been called into question after a high ranking officer was seen on a YouTube video using pepper spray on demonstrators the weekend before last.

Will Estrella wants this to be a peaceful protest, a theme echoed across Zuccotti Park.

Most of the protesters I saw camping out at Zuccotti Park were young - in their mid-20s. Many have gone from job to job since graduating.

They have known difficult economic times in young adulthood, and they don't like a system which to them seems to reward what they call the "1%" of society.

"We're the 99%", they say.

Their manifesto supports the people of the world against corporate greed, and calls for people to assert their power and create a process to address the problems we face.

In the centre of Zuccotti park, amid the sleeping bags, is the communal food area.

Ange, a 24-year-old redhead who does freelance art work in Manhattan, is helping organise the food for the protesters.

"I like communal decision making, something that comes from the bottom up," she explains. Ange isn't sure how long she'll be here, but she's pleased to be part of a grassroots movement.

Where will this lead? No-one knows. But the protesters say their enthusiasm won't fade with the autumn sunshine.

The question is whether this ad hoc group of protesters - who feel they're getting the short end of the stick while corporate America hoards money - could morph into a political movement, a kind of left wing Tea Party.

The city's unions are now starting to back the protesters, something they didn't at first, suggesting they see the potential here.

Jesse Cooper Levy, a bearded 24-year-old, hopes this movement will influence politics.

His particular concern is what he sees as the corrupting influence of corporate lobbyists on Washington DC.

"What do you want?" I ask the protesters. "Change", comes the answer - a change in political and economic culture.

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