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QUEST MEANS BUSINESS

Dow Hits Record High; Global Market Recovery; Geneva Motor Show; Renault-Nissan's Road Ahead; From Pain to Gain for Nissan in Spain; Dollar Up Against Euro; Justin Bieber Apologizes for Late Start at London Concert

Aired March 5, 2013 - 14:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICHARD QUEST, HOST: The Dow has done it. US markets are at an all- time high, and the question is, can it keep going until the closing bell?

Stocks may be soaring, bonuses are getting capped. Tonight, Michel Barnier on this program on why the EU is right to put a limit on pay.

Also, CEOs and presidents from Ford, Daimler, Renault-Nissan, all speak on this program tonight. It's a case of gentlemen, start your engines.

I'm Richard Quest, and I mean business.

Good evening. The Dow has hit an all-time high within the first few minutes of today's trading. The average surpassed that seen five years ago. And this is where we stand, up 140 right out of the gate before -- it hasn't been down. To 14,268, a gain of one percent. It's come off just a little tad. It was over 1.1 percent.

But a very strong reaction and performance from the Dow, which if -- basically, it's got two hours to go, and since the gains have held, it would suggest -- suggest -- that we will get an all-time closing high at 4:00 New York time, which is two hours from now.

If you want and you're worried and you're thinking hang on a second, why when there's so much malaise and economic problems, why should the Dow be doing so well? Let me show you what the three fundamental reasons.

First of all, the Fed. Basically, Ben Bernanke has said repeatedly he will do whatever it takes. Quantitative easing, the various measures, right the way through to even putting an unemployment component as a future date for when the results -- for when they will raise interest rates.

Also, next, second reason, company profits. Companies are coining it in, largely on the back of overseas business, but there are now $2 trillion worth or so of money on company balance sheets.

And finally, there has been a recovery in the housing market. That has created more confidence, a wealth effect. We're not quite at a virtuous cycle, a rising spiral, but we're not far off if this continues. Maggie Lake is at the New York Stock Exchange and joins me now.

Maggie, I suppose the core first question, is it your gut feeling it'll hold it until 2:00? Until 4:00?

MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: I think it'll hold, Richard. But that last hour of trade, be careful, especially in today's environment, where a lot of it's driven by technology and momentum.

Still, the feeling here is that we've punched through, now, not clear where resistance is, so even if we do dip back, no reason to think this can't continue for a little bit. And you're laid out some of the positives behind this.

And let's just remember, we've never been here before, so this is significant. You're right: corporations are in great shape, the earnings have been fantastic. Yes, the fed's in there, but if you bought at the bottom, just let me tell you some of these numbers.

American Express, up 491 percent from those lows. Home Depot, 286. Caterpillar, 275. So if you could get in there at that moment when it felt so terrible, you're feeling pretty good today. So that is significant.

However, the days of exuberance that we remember last time we hit significant highs are over. You don't have any of that feeling of celebration. There are people down here who are concerned about two main things.

First of all, the stimulus got us here. Hopefully, the Fed gets it right and as they withdraw, the economy is strong enough to pick up the baton. But if they get that exit wrong, people are worried.

And the second thing is, there seems to be a disconnect. Corporations are doing really well, but the average American isn't. They're concerned about gas.

QUEST: All right.

LAKE: They're concerned about their income. So, does that mean that that we can fade back as quickly, since you don't have that -- some of those economic fundamentals connecting. I think people are worried about that, Richard.

QUEST: One thing that is clear, Maggie: the momentum and the, as you say, the enthusiasm, is not there as it certainly was in 2007. But that's because the fiscal cliff, the sequester, the continuing resolution, the ceiling. So, Maggie, why aren't these other political economic events taken the tone here?

LAKE: I'm not sure that they completely are, Richard. You'd have people who would argue the fact that we've been able to get to this high despite that is actually a positive and that the market's looking through that.

I think that you don't have that sort of -- that feeling of total confidence around this, because you don't have that much participation in it.

Volumes are still low, you have a lot of professionals driving it, you don't have that retail investor back in, you don't have a lot of those long-term money managers, those buy and hold money managers, maybe participating in this the way people would like.

I think that's what has people down here feeling a little vulnerable, and it's a question you and I are going to be talking about, and does this record high start to draw them back in? Do people get that allocation out of bonds, do they start to make more of a commitment to equities?

Does the retail investor that got burned look at this and finally think, you know what? If I'm going to have a retirement, I have be in equities. That's the question we don't know the answer to yet. That will maybe determine the level of confidence we have in the months going ahead.

QUEST: Maggie Lake at the New York Stock Exchange, on the floor of the Exchange. We thank you, Maggie. Good to see you.

I'm going -- we're all going to be watching. We're all going to be watching very closely to see if it holds it until the closing level. This is how the Dow has performed since the last all-time high, and I want you to just look at the -- interestingly, that very sharp fall that happened, that's Bear Stearns, that's Lehman Brothers, that's the great recession.

It then picks up quite strongly, and then we have this over here, a couple of clicks and bumps on the road. That bump on the road is the debt ceiling crisis, when the US lost its Triple A. But otherwise, it has been a fairly traditional rather solid gain with these singular exceptions.

Now, if we put elsewhere into it, look at the other major markets, with the FTSE, for example. The all-time high of the FTSE was at 6730 back in 2007, so it's over here. The FTSE had a dramatic fall, and the FTSE's had continual falls again and again. But the FTSE is just off 298 points from its all-time high, so the FTSE is also, quite dramatically, come back.

Into the German market, with the DAX, which had an all-time high of 8105. That was back in 2007. Now, the DAX has had much more -- that's the crisis, but this is the eurozone crisis. This is when it looked like Greece was going to bust out of the euro and Merkel was in such trouble. And yet, things have come back even here.

So, across all equity markets, we have seen this, with perhaps the exception of the Nikkei in Tokyo. Now, we've had to take instead of the all-time high, because those of you of a certain age will remember that that was back in 1989, we have taken the post-crisis high of 18,212.

This is a very sorry situation. Get right in there and you'll -- and just trace that line and you'll see virtually no major improvement in the Nikkei. The only recent improvement is just here, as monetary stimulus starts to come back into the market.

So, with all of this, markets rising high, Bob Parker is the senior advisor of Credit Suisse. Why such resilience?

(BEGIN VIDEOTAPE)

BOB PARKER, SENIOR ADVISOR, CREDIT SUISSE: I'd actually add two or three other factors. I think the first factor is that worldwide, we're probably going to get another round of monetary easing. So, the Bank of Japan will clearly ease monetary policy.

In Europe, there are expectations that following the poor days that we had at the end of last year that the ECB will ease policy. And obviously, the Bank of England, I think, will add to its quantitative easing. So, global monetary easing.

I think I would also add very stable commodity markets, so we don't have any threat from equity markets from rising commodity prices. Low inflation.

And I think the other factor, which is probably the key factor, is the expectation that bond yields and money market rates will stay low, therefore by default, equities are an attractive asset class because other asset classes are unattractive.

QUEST: You see, that's the point, isn't it? The monetary easing argument, yes it'll stimulate growth, which will eventually improve profitability, monetary easing could -- but fundamentally, monetary easing keeps rates low.

PARKER: Correct.

QUEST: And therefore, equities are the better investment.

PARKER: Absolutely, and particularly if you look at the relationship between dividend yields in most markets relative to bond yields. And whenever dividend yields are elevated relative to bond yields, that underpins equity markets.

QUEST: I'm going to be the normal person who wants to take the punchbowl away.

PARKER: Right.

QUEST: At what point does this equity rally or bear -- sorry, bull market become speculative and bubble-ish?

PARKER: When we're significantly higher. Now, having said that, one word of caution, which is our technical models show -- and this is, I think, intuitively obvious -- that equity markets are overbought at the moment, therefore we could go through a period of a strong equity market, like we've seen over the last couple of days, but then setbacks.

QUEST: Well, that's correction.

PARKER: Exactly. And my view is we're going to -- the trend over the balance of 2013 for equity markets is up, and we could be up at least 10 to 15 percent relative to today by the end of the year. But obviously, it's going to have corrections.

QUEST: And yet, we see the Dow at its high, the FTSE's not far off --

PARKER: Correct.

QUEST: The DAX is not far off, the CAC in Paris is quite a long way - -

PARKER: And look at the movement of Japan over -- since November --

QUEST: And Japan --

PARKER: Yes.

QUEST: -- has not been --

PARKER: Correct.

QUEST: So, it's very much pick and choose.

PARKER: Well, there are some markets which have underperformed quite badly this year. Brazil this year is down 7 percent.

QUEST: Which it shouldn't be.

PARKER: Well, actually, given that the real has strengthened -- and one point to make, actually, is that the best performing markets, ex the US, have been where we've had weak currencies. The UK, Switzerland, Japan. Where you've had stronger currencies, which Brazil is an example, that's actually put -- that's one reason why you've had an underperforming market there.

Some other markets, such as India, where you had a disappointing budget, where you had a good run last year, the market has not done well. So, there is some divergence. I think one theme is that certain emerging markets, like India and Brazil, are not doing very well.

(END VIDEOTAPE)

QUEST: Bob Parker joining me earlier. One note of caution: Bob talks about gains of whatever percentage points in markets. Needless to say, nothing you ever hear on this program should ever be taken -- you take it and you take it what you like, but we're certainly not giving advice one way or the other on whether you should invest in equities, bonds, gold, or put it in a mattress under the bed.

At half past the hour, you're going to hear from Michel Barnier, the man behind the EU bankers' bonus cap. He's issued a warning to London banks considering legal action. Tread carefully.

Also after the break, an extravaganza of chief execs from the Geneva Auto Show. We've got Renault-Nissan, Ford, and Daimler. It's QUEST MEANS BUSINESS, good evening.

(COMMERCIAL BREAK)

QUEST: It is a critical time for the car industry as the Geneva Motor Show officially opens to the press. At the show, Volkswagen's Golf VII as the show's Car of the Year. Now it's time for the other companies to unveil their new models and convince us they have got what it takes to motor on.

Well, here at the Quest Car Showroom, we have all the big names represented right on the forecourt for you. You don't need to go any further. Tonight, you're going to hear from the CEO of Renault-Nissan. You're going to hear from the president -- the head of Ford Europe, and the chief executive of Daimler.

Each one of them is faced with one common dilemma: the global outlook may be robust, but demand from Europe remains critically weak. Let's start with Carlos Ghosn, the chief executive of Renault-Nissan. He says the European car market, when bluntly you take it overall, Europe is just -- it's going from very bad to bad.

(BEGIN VIDEOTAPE)

CARLOS GHOSN, CEO, RENAULT-NISSAN: The market in Europe continues to decline, and the contraction is even bigger than what we have foreseen. Even with this very bad start of the year, I still consider that the rest of the year should be a little bit better.

Which means that we're going to go from a very bad market to a bad market. Instead of having a minus 8 percent decline, we're going to probably see something around 3 to 5 percent decline for the year.

QUEST: What is it you would like to see from governments in Europe to help growth?

GHOSN: The best thing that governments can do today is, as much as possible, bring predictability to the economy. Eliminating some of the uncertainty. Because today, one of the reasons for which consumers are not buying cars or other goods is because they are uncertain about the future.

QUEST: If we take Japan, Nissan, and that side of your empire, we have some very interesting economic developments. A new government, a new head of the Bank of Japan threatening -- or promising more stimulus and quantitative easing.

That's going to take its toll on the currency, which should be good for your exports but bad when it's translated into your balance sheet. You really can't win here, can you?

GHOSN: Yes. Well, you know, it's about time, because Japan has been, unfortunately, for the last three years, hesitating between different policies, and the situation was really bad. Finally, we have a government which has a vision and trying to do something about the deflation -- about Japan.

I hope that government's going to bring the yen-to-dollar at the historic level of 110 yen. So, with the new administration, there is a chance that finally something's going to -- something serious is going to be done to try to erase the handicap that the currency represents on this economy.

QUEST: You'd rather see the weaker currency, which will boost your exports, even though that might reduce your profitability and your margin on those exports?

GHOSN: Yes. No, but it is true, at the same time, what we want is the currency to be more in the neutral territory. We're not asking for something which is going to be artificially boosting our competitiveness. We're not asking for this. But we want to remove some of the obstacles on our activities.

(END VIDEOTAPE)

QUEST: That's Carlos Ghosn, the CEO of Renault-Nissan. Accelerating productivity is one of the ways he wants to jump start Europe's flagging auto industry. And he's already doing it, using a Spanish plan as a roadmap for the rest of the company, as Isa Soares reports from Barcelona.

(BEGIN VIDEOTAPE)

ISA SOARES, CNN INTERNATIONAL CORRESPONDENT (voice-over): Piece by piece, it's all coming together: the components of recovery. Adversity, it seems, has brought opportunity to Spain.

Here at Nissan's plant in Barcelona, reform and restructuring are bearing fruit. Earlier this month, Nissan Barcelona received $178 million in investment to produce 80,000 cars, a deal only made possible, says Nissan's boss in Spain, by changes in labor legislation.

FRANK TORRES, CEO, NISSAN MOTOR IBERIA: Two weeks ago, we got a competitive agreement with the unions. Thanks to this, we got the location of a new six-segment car, which will create 1,000 new employments from Nissan and 3,000 indirect employments from suppliers.

This could be remarkable, and this will put Barcelona to produce more than 200,000 euros, which will be the record for this Barcelona plant.

SOARES (on camera): The deal you've reached with the unions -- in a way, you've set a precedent here in Europe for reduced labor costs. Do you think the rest of Europe will follow suit?

TORRES: I think it's not a choice. You are competitive, or you are out.

SOARES (voice-over): This change of mentality has benefited both employee and employer. For Nissan, it's a way to survive Spain's economic crisis, boosting exports and manufacturing. For its employers, it's a way of holding onto their jobs.

JOHN MARTIN, SENIOR VICE PRESIDENT OF MANUFACTURING, NISSAN: We agreed to new flexible working practices, specifically around our ability to hire temporary labor, which prior to this agreement, the unions had a very strict limit that we could not hire any more than 15 percent of our total staff as temporary workers.

We asked the workers to work an increase of around 42 hours per year on their existing contracts. So, they are working 42 more hours per year for no extra pay.

SOARES: Nissan's plant here in Barcelona has been able to reduce costs by 30 percent. Labor market reforms have played a huge part in that. But having key supplies under your roof and a port on your doorstep have also been beneficial.

Labor market reforms are already attracting investment. Ford, Renault, and Volkswagen, are all expanding production to take advantage of lower labor costs. And the difference is quite significant. According to EOCD, France's labor costs have risen 4.3 percent in three years. Germany is slightly more competitive at 1.9 percent. But even Italy and the UK haven't adapted to the difficult times.

Compare that with Spain. Here, labor costs have fallen almost 5 percent. The Spanish government hopes that making the labor force more flexible will help combat recession and begin to cut unemployment, now at 26 percent. Just one part of the long haul to recovery.

Isa Soares, CNN, Barcelona.

(END VIDEOTAPE)

QUEST: Now, a Currency Conundrum for you. The currency of Georgia is an anagram of which Asian currency? Is it the dinar, the rial, or the rupee? I think I know the answer to this one, but I shall hold my nerve until later in the program.

Which is exactly what the dollar did. It's up against the euro. It's boosted by the Dow. Little change against the yen, and the pound is stead. These are the rates --

(RINGS BELL)

QUEST: -- and this is the break.

(COMMERCIAL BREAK)

QUEST: Justin Bieber has apologized to his British fans for not getting on stage on Monday night until after 10:00 PM, well beyond the bedtime of many of his young supporters. Disgruntled concertgoers showed their displeasure at being kept waiting.

(BEGIN VIDEO CLIP)

(CROWD BOOS)

(END VIDEO CLIP)

QUEST: They say they were led to believe the singer would be on stage at 8:30, which would make him almost two hours late.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I'm totally and utterly disgusted. We were all fans, and now we hate him.

UNIDENTIFIED MALE: A disgrace.

UNIDENTIFIED MALE: It is.

UNIDENTIFIED MALE: So, I have to wait the length of time that you waited for this guy. It's just ridiculous.

UNIDENTIFIED CORRESPONDENT: What do you think? Are you a bit cross?

UNIDENTIFIED CHILD: Yes.

UNIDENTIFIED CORRESPONDENT: Are you sad that you missed Justin Bieber?

UNIDENTIFIED CHILD: Yes.

(END VIDEO CLIP)

QUEST: Hero to zero in two hours. Bieber said he was late but not as late as everyone made him out to be. He tweeted, "I was 40 minutes late to stage. There's no excuse for that, and I apologize for anyone we upset. However, it was a great show, and I'm proud of that."

Now, Bieber is tweeting -- he's 19 years old, of course. He's got 35 million Twitter followers. That night two -- he said night two, that's tonight, will be even better. Let's put this 35 million Twitter followers in perspective. It's the population of Canada, which is his home country. Now bear in mind, it cost a minimum --

(RINGS BELL)

QUEST: -- of $86 to see Bieber live, so the four nights, sold out -- let me just do the calculation there. The four nights sold out in London will rake in almost $7 million in ticket sales. But that, of course, is before you add in the cost of actually putting on the concert, which is expensive.

Erin McLaughlin is outside the O2 and joins me now. Erin, the concert is underway, and poor Erin McLaughlin, who I'm sure is a Bieber fan in her spare time, poor Erin is left outside.

ERIN MCLAUGHLIN, CNN INTERNATIONAL CORRESPONDENT: Yes, Richard. The concert started not too long ago, though Justin Bieber's not expected onstage for another hour and a half.

The believers are out in force tonight, Richard. Some 15,000 fans expected right here at London's O2 arena, and I spoke to a --

(CROWD SCREAMING)

MCLAUGHLIN: -- ecstatic fans and kids. The parents, however, well, they're hoping he'll be punctual. Take a listen.

(BEGIN VIDEO CLIP)

(GIRL SCREAMING)

MCLAUGHLIN: Yes. What do you think?

(GIRL SCREAMING)

UNIDENTIFIED FEMALE: These things happen. The only thing that I think is why didn't he say something? That's all. Why didn't he say something when he came on stage?

UNIDENTIFIED GIRL: I don't care! It's Justin Bieber, he's allowed to!

(LAUGHTER)

(END VIDEO CLIP)

MCLAUGHLIN: Well, now they're -- while there are high hopes for tonight's concert, last night, well, that was another matter. Fans complained of a two-hour wait. Some kids could be seen sleeping in their seats. Others simply had to go home. It was a school night, after all.

Justin Bieber apologizing, citing technical difficulties. Tonight, he promises a great show. And take a look Richard: I have a ticket. So, we will be seeing how smoothly things go tonight, Richard.

QUEST: You -- hide it quickly before you get rugby tackled to the ground by some Bieber fan who wants to rush in and see it! Are you looking forward to the concert? Come on, admit it. I mean --

MCLAUGHLIN: Yes. I have to say, I -- I am. The kids that I've spoken to so far, pretty excited, so I would say I am looking forward to seeing Justin Bieber in action, Richard.

QUEST: If you don't wear a Bieber scarf or a hat or a t-shirt, you're not half the woman I thought you were. Erin McLaughlin, who is in at the O2 center.

From Bieber to bankers. Back to our more normal fare and menu. The EU's top banking official on this program says there'll be no budging on cap of bankers' bonuses. Michel Barnier tells me why those seeking to sue should think again.

(COMMERCIAL BREAK)

QUEST: Hello, I'm Richard Quest. There is more QUEST MEANS BUSINESS in just a moment. This is CNN and, on this network, the news always comes first.

(BEGIN VIDEO CLIP)

QUEST (voice-over): Venezuela has expelled a U.S. embassy (ph) attache for plotting against the government. The vice president of Venezuela has accused various foreign countries of attacking President Hugo Chavez by infecting him with cancer. Nicholas Maduro says the president's health is the worst it's been since his December cancer surgery.

The United Nations Security Council is meeting to talk about more sanctions against North Korea. It comes in response to North's recent nuclear test. North Korean leaders are now threatening to throw out the 1953 armistice which ended hostilities with South Korea.

Kenyans are watching closely as votes are being counted from Monday's elections. Partial results show the Deputy Prime Minister Uhuru Kenyatta with an early lead in the race. Kenyatta faces trial at the International Criminal Court in connection with the violence that broke out after the last election in 2007.

At the Vatican, Catholic cardinals are meeting for a second day ahead of the conclave to elect a new pope. Most of the 115 cardinals who are eligible to vote, those who are under 80, have now arrived. The Vatican spokesman says there's no desire to rush the process.

(MUSIC PLAYING)

(END VIDEO CLIP)

QUEST: The battle over the bankers' bonuses just keeps getting hotter. Today in Brussels, the U.K. finance minister, the Chancellor of the Exchequer, squared off against his E.U. counterpart.

If you'll join me in the library, you'll see what I mean. You remember, of course, that the E.U. has these proposals on bankers' bonuses, to limit the amount to one or twice the amount on shareholder intervention.

Well, now George Osborne says that if this goes ahead, it would have a perverse effect. Essentially, the argument that you heard on this program last week, it would raise base salaries because that wouldn't be capped by the bonus cap.

So you would actually be in a worse situation having less performance related pay. It would make it harder to claw back not one of the other 26 members backed him up.

In London, some of the biggest banks are considering suing the E.U. They say the ban may contravene European law because it prohibits regulating the pay in its member states. The bankers' bonuses, the cap would restrict the amount that can be paid to one or two times without shareholder approval. Forget it.

The rest of the bloc is standing firmly behind Michel Barnier, the banking commissioner, told the ministers an unlimited bonus pool was what led to the crisis. Bonuses encourage risk-taking, and risks created crisis. In his interview with me, he made it quite clear, enough's enough.

(BEGIN VIDEO CLIP)

MICHEL BARNIER, EUROPEAN COMMISSIONER, INTERNAL MARKET AND SERVICES (through translator): Perhaps some bankers have a short memory. We ourselves, however, as regulators, it is the feeling of almost the entirety of the E.U. finance ministers today in Brussels and of the European Parliament; we don't have a short memory.

And we remember that one of the reasons for the financial crisis in the U.S. and then in Europe, I say, one of the reasons was that some bankers took risks and were encouraged to take risks because they were getting an unlimited bonus. And who paid for these risks when they turned into a crisis? It was the taxpayers, payors.

We want to put an end to this situation. And to apply more responsibilities. So if some bankers wish to take legal action, let them think carefully that they be sure of the legal basis of their argument and especially that they take care of their reputation.

QUEST: Except if we now look at both the commission's proposals and now the referendum that's just taken place in Switzerland, it could appear from the rest of the world point of view that Europe has become a very unfairly place for CEOs, for bankers, for executives.

BARNIER (through translator): I want to remind you, it's not about the proposals of the commission. Proposals, I made them almost two years ago. Today, we're talking about a political agreement between almost the entirety of the 27 E.U. finance ministers and the European Parliament. We're at the end of the road.

And I note also with regard to a jurisdiction which is not in the E.U., Switzerland has a similar setting of moderation. And we hope with the progress that we're making in Europe in favor of transparency and moderation, we can convince the other jurisdiction in the world that we can convince it the same. Because throughout the world, people don't have a short memory.

QUEST: The U.K., which is still Europe's single largest banking financial industry, continues to oppose many of the measures that you are putting forward. It continues to fight claiming Brussels is anti-London.

BARNIER (through translator): It's not true. It's a misunderstanding. (Inaudible) understanding of what I'm doing. The proof is that in the 27 laws I've introduced in three years, to put into practice the G-20, like the Japanese, the Chinese, I've worked on compromises with the British government. Why?

Because it's an opportunity for us, for the whole of Europe, that the main financial center be in London. And that it is in the single market. On the text that we have approved today, the ministers have approved.

In the most part, George Osborne, who was very constructive, approved vital parts of the rules of play that we're introducing in the banking sector. There is one point of disagreement, the question of bonuses. We're going to try and work on a consensus. But the text was approved with the capping of bonuses. And I think it's a balance text.

(END VIDEO CLIP)

QUEST: That's Michel Barnier, who is the E.U. banking commissioner.

Standard Chartered, the bank, in -- says that the E.U. bonus cap could stifle competitiveness and its chances of hanging onto top talent. They told us this as they announced 2012 results. The results themselves were good; problem was that before tax was up just 1 percent at $7 billion or so, capped by a huge fine for breaking sanctions on Iran, and which we'll tell you in a second.

It also -- this is crucial. At a time that the profits were up, the bonus pool was actually down by some 7 percent. It was lower than dividend amounts; it was lower than all other variety of matrices. So they kept it under 7 percent.

In 2002, the bank set up five core values, courageousness, responsiveness, international creativity, trustworthiness. Now 10 years later, the bank was paying out $667 million in fines for breaking sanctions. I asked Standard Chartered's finance director, Richard Meddings, whether the bank had failed entirely to achieve its own value goals.

(BEGIN VIDEO CLIP)

RICHARD MEDDINGS, FINANCE DIRECTOR, STANDARD CHARTERED: We have apologized for the mistakes that we made in our historic sanctions regime. And I'm happy again to repeat those -- repeat those apologies. And we are talking about a period some time ago. So in the 2001-2007 period.

And absolutely I take a point that our values, I think, brought out effectively initially in 2003 (inaudible) from that point. And all we can say is that we continue to focus on those values.

We appraise our people against them consistently and we adjust how we assess that performance, not just in terms of how we remunerate them, but actually in terms of other aspects of performance on values as well as on what they do.

QUEST: If we take, for example, now the E.U.'s proposal, the E.C.'s proposed bonus restrictions, and you tie it in with the Swiss vote on corporate pay, I'm assuming that Standard Chartered is against the E.C.'s proposals on limiting bonuses in the formula that they're putting forward.

MEDDINGS: Absolutely we think that the measures will hurt or damage the competitiveness of E.U. located banks. And they compete -- we compete with banks in Asia and the American banks in Asia in the Middle East and Africa, who will not be subject in the same way to those restrictions.

And we want to be able to pay our people for good performance, for what they do and how they do it. And so I think the concern here is actually what does it do for the competitiveness for banks located in the E.U. And over 95 percent of Standard Chartered staff are located outside the E.U.

QUEST: So obviously if these rules come in, you will abide by them. You'll have to, as indeed all banks. Do you fear if the E.U. rules come in, it will put European institutions basically you will turn 'round at board meetings and say, eh, let's move as much as we can -- let's keep them -- the lowest minimum necessary in Europe and we'll put the rest elsewhere?

MEDDINGS: Standard Chartered has roughly 2,000 people in Europe. And we employ 89,000 people around the world. Over 90 percent of our business (inaudible) from Asia. Clearly we will abide -- comply with any rules.

What I would simply reiterate is first of all, it's too early to think about the specific impact for Standard Chartered, but secondly, we do believe that those measures will reduce competitiveness of E.U.-based institutions as they seek to engage globally in trade finance and other aspects of banking business across the world.

QUEST: What's your one biggest economic concern now? Is it U.S. budgetary issues? Is it remaining Eurozone issues? Or is it slowdown in Asia and possibly China with a more hard landing than we thought? Which would it be across the globe, sir?

MEDDINGS: I don't think I would highlight any of those. However, as an individual, I think all of those are very relevant. And we need to watch them. I would also add one, which is the (inaudible) of regulation and to make sure that regulation doesn't impede economic growth.

(END VIDEO CLIP)

QUEST: Richard Meddings, the CFO at Standard Chartered.

Ford is investing in the future. The carmaker's European head tells me there are green shoots, but they are there, they are small and you'll hear him explain how they can be nurtured after the break.

(Inaudible).

(COMMERCIAL BREAK)

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QUEST: Ah, well, welcome back to "Quest's Cars" showroom, where we're talking about the problems facing the industry as we've been hearing from the Geneva Motor Show. And it all seems to be circled and based around the issues of Europe, where, of course, growth is poor, sales are down and many people are wondering whether or not this is actually the bottom.

Daimler's chief executive echoed the sentiment from Ford and Nissan on growth. He says that -- the CEO says the year's got off to a slow start, but they are outside of Europe still growing in that declining market.

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DIETER ZETSCHE, CEO, DAIMLER: America is one great opportunity for us. We're doing very well there, actually. We are leading in our segments as premium manufacturers. Of course, China is another great opportunity where we have to restart our momentum.

We were great there for many years. They slowed down a little bit last year. Now we have to reaccelerate. We took a lot of steps to do so. In Europe, obviously we have to go against the market, which is declining, and gain market share. What we are doing with our new compact cars in a successful manner.

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QUEST: That's the CEO of Daimler.

One of the core issues and one of the companies that has been most robust at dealing with the European problem is, of course, Ford. Quite up front when dealing with the problems. I asked the head of Ford Europe, Stephen O'Dell, whether he is now seeing any signs of a turnaround in Europe.

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STEPHEN O'DELL, CEO, FORD EUROPE: Certainly not from the industry perspective. Last year's industry in western Europe, the way we measure it, is about 14 million units. We've given guidance between 13 million and 14 million units this year. And it's clear that the first part of the year, anyway, is operating at the lower level of that bandwidth.

There are some signs, though, on suppliers' purchasing, on our own order banks that there are some green shoots, all be them very small, that we could start to see some sort of recovery slow in the second half. So certainly in the first half, if it was like we are now are finally running along at the trough.

QUEST: And the problem, of course, is you think it's in the trough, but with another year of recession in the Eurozone, I hate to be the bearer of bad news, as you turn the corner, there could be another hill downwards.

O'DELL: I think that's a reasonable estimate. Actually, I was saying this time last year, we felt that were in the trough. But our plan, the Ford plan, is we'll face the reality of whatever the industry is. We'll restructure our costs accordingly. We continue to invest actually at an accelerated rate in new products. So when the upturn does come, we'll ride that and we're also changing our brand strategy as well.

QUEST: You have some very strong views, don't you, on the prospect of an E.U. referendum in the U.K.

O'DELL: I understand there are some things that individuals would not find palatable or even positive about membership of the E.U.

But from a business perspective, to elect and decide to vote to move away from 50 percent of your business partnership doesn't strike me as a very good view on what would an outcome of a referendum would be. I don't know what the outcome would be. But I hope sense prevails as we start to move potentially towards that referendum.

QUEST: Would you reassess any of your investment decisions in the U.K. because of the uncertainty of the U.K.'s position in the E.U.?

O'DELL: I don't see that as an inhibitor in the short term. I mean, we've already got the currency issue. The U.K. industry last year, car industry, was quite buoyant because the pound was strong against the euro. It's come down a little bit since then. But I don't think that's the principle driver of our decision. We're committed to the U.K.

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QUEST: So you've heard tonight from all the chiefs and CEOs.

Coming up next, you'll hear from the ultimate CEO, at least when it comes to the global weather forecast, with Jenny Harrison (inaudible) after the break.

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QUEST (voice-over): Tonight's currency answer on the "Conundrum," the currency of Georgia is an anagram of which Asian currency? Georgia uses the lari, which is an anagram of the rial. I never knew that and I'm not sure how much further it takes me if I go -- if I know it afterwards.

Jenny Harrison is at the World Weather Center for us this evening in charge of all matters meteorological.

JENNY HARRISON, CNN METEOROLOGIST: Indeed I am. Sadly, no control over them, but I can stay and tell you about it, Richard.

I'm going to be talking about the U.S. again, because you need to be prepared for some pretty lengthy travel delays, if not, indeed, cancellations of flights over the next couple of days. It's all because of this. (Inaudible) satellite. Not so when you see the radar. The snow in the last few hours, rain, of course, that pink is the icing in between.

And the numbers, by the way, they are the current wind speed. You can see fairly strong in the South, but we're going to keep an eye on those wind speeds over the next two days. They could cause some problems. But as we continue through Tuesday, Chicago, Cincinnati, Indianapolis, Minneapolis, you can see the sort of areas we're talking about.

Of course, some of the major, major destinations and then Wednesday, as that whole system works its way eastwards, it will have an impact on the northeast, New York, and also Washington, D.C., we could see some cancellations there, some lengthy delays as well. This is storm system working its way eastwards.

And from then on, it kind of rolls along the coast. But because of the snow that's expected, we have got those warnings in place. And this is what I mean about snow, that is expected. Look at the numbers, first of all, sure for Chicago, 19 centimeters of snow. Of course, it's already snowing there.

This is going to continue to come down as we continue through Tuesday into Wednesday. To give you an idea, the highest March total, daily total in March ever recorded was 29 centimeters. So we're looking at 19 in the next few hours. The average for March in Chicago is only just over 3 centimeters.

This is a lot of snow to come in one huge dumping, as you can see. And then Washington, D.C., now these numbers are fluctuating quite a bit, depending on the time of day and the models. But really, because that area of low pressure, the journey it makes is pretty critical as to where the Washington ends up in this area or of course, the system heads further to the north.

And then (inaudible) lot less. But 36 centimeters of snow, that could beat the highest-ever March total, daily record, which, actually, again, is 29.21 centimeters and the average in March is pretty much the same for there as well.

So not surprising, the warnings are in place. This is an area covering a population which is about 35 million people. And this -- the area covered, 1.2 square miles, about the size of Spain and France combined.

System works its way through the rest of Tuesday into Wednesday. And then as you can see, it just kind of works its way up into the northeast. And so because of that, the snow continuing to come down or land, which is why we have those warnings in place and why the totals could be so high, 8 in Atlanta on Wednesday, 1 in Chicago.

Meanwhile in Europe, it's the southwest really seeing the weather, mostly rain coming through here. The winds are going to be blustery over the next couple of days as that next system comes through. So generally quiet picture, snow to the far north, some snow along the line of the Alps, rain across the southwest. But at least it will be mild, Richard.

QUEST: Jenny, before you go, as we look -- I mean, obviously those travel delays to the United States, it does seem to have been an especially bad year for winter in the U.S., nor'easters, this, that and the other. And I -- and you see -- now you see, am I right or am I just being wrong?

HARRISON: No, I'll tell you what it is, it's not that you're wrong. I think it's just that this has been happening for the last couple of weeks. So we've had sort of -- we had (inaudible) of the big storm systems that came through, in particular the first one you mentioned, the nor'easter.

Then a week or so later, then again, in actual fact, if I tell you that in Chicago -- Chicago? No, I don't know what I want to tell you.

In D.C., they've actually had way less snowfall than they should have in the last two years. They should have 91 centimeters. And so far in the last two years, 25 months, they've actually had a tiny amount of snow, only 10 centimeters. So no, it hasn't been particularly bad; it's just been quite late (inaudible) season.

QUEST: Jenny, I'm in Berlin tomorrow. I'll talk to you from the German capital when, hopefully, I see it's warmer than average. Jenny, we thank you for that.

After the break, I'll have a "Profitable Moment."

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QUEST: Tonight's "Profitable Moment," the picture tells the story. The Dow at an all-time high, it has recovered all the losses that it made from 2008 and seems set tonight to go one stage further. It is easy to dismiss the Dow as being irrelevant. It is, after all, only 30 stocks, chosen by a committee not fully representative of the breadth and range of the U.S. economy.

Nonsense, I say. The Dow is the market, perceived by ordinary investors around the world, if the Dow's at an all-time high, it telegraphs that important message. There may be light at the end of this terrible tunnel.

Among the reasons why the Dow, a complete gerrymandering of the market, by central bankers, printing money, equities at their best return in town, it's reflection. Someone is doing something. And the central bankers won't stop until finally growth has returned. Well, they won't stop and growth will return. That is, of course, unless the politicians finally mess it up.

The Dow tonight at an all-time high, that's worth celebrating, because that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable.

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QUEST (voice-over): The headlines at the top of the hour: Venezuela's foreign minister says Caracas is expelling two diplomats from the U.S. embassy, who were allegedly plotting against the government.

And the vice president has accused various foreign countries of attacking Hugo Chavez by infecting him with cancer. Nicholas Maduro says the president's health is the worst it has been since this December cancer surgery.

The United Nations Security Council is meeting to talk about more sanctions against North Korea. This comes in response to the North's recent nuclear test. Pyongyang is now threatening to throw out the 1953 armistice that ended hostilities with South Korea.

Kenyans are watching closely and perhaps nervously as votes are being counted from Monday's elections. Partial results show the Deputy Prime Minister Uhuru Kenyatta with an early lead. Kenyatta faces trial at the International Criminal Court in connection with the violence from the last election.

Cardinals are meeting at the Vatican for a second day ahead of the conclave to elect a new pope. Most of the 115 cardinals who are eligible have arrived in Rome. The Vatican says there's no desire to rush the process.

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QUEST: Those are the news stories we're watching for you. Now to New York and "AMANPOUR."

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