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tv   Business - News  Deutsche Welle  September 15, 2018 3:02am-3:15am CEST

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it was the largest bankruptcy filing in u.s. history and it sent shock waves around the globe this weekend marks the tenth anniversary of the collapse of lehman brothers we take a look back and ask what has changed also the turkish president already making rumbling noise towards the central bank a day after it hiked interest rates then there are slips again. i'm christopher nolan good to have you with us on september fifteenth two thousand and eight u.s. investment bank lehman brothers filed for bankruptcy the events and everyone from u.s. investors to the spanish property owners running for cover twenty five thousand lehman brothers bankers found themselves out of work overnight and then there was a giant but not too big to fail lehman had become so dalton mortgage origination that it was basically
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a real estate hedge fund disguised as an investment washington wasn't willing to save the financial institution although it did say father. now in the aftermath of the lehman brothers collapse the then u.s. administration introduced stricter banking regulations known as the dot frank walls but many of wall street want the deregulation to go even further critics say racing restrictions on banks could prompt the next financial crisis. so let's go now to the heart of darkness were it all began a new york so if wall street correspondent is standing by sophie you talked to former lehman employees how do those people remember those bad old days. well after listening to some former staff members that seems to me that at least some people on the lower level of the hierarchy weren't really aware of how bad the situation was even days before the bank one of the guys who had trading to. me
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that two thousand and eight actually had been kind of a good year for him for a rather long time afterwards people were still coming in to work although they couldn't really do anything as they were being told not to trade anything and many employees decided to quit before everything really went downhill surely a bank as big as that just doesn't vanish into thin air is there anything left. well first of all there were truth separate bankruptcies the first it was a lehman holding company the second was what remains of the broker dealers sold to barclays and now ten years later both the holding company and the broker dealer are nearing the end of the wind down the vast majority of claims have been taken care of the one point two trillion dollars of claims originally filed all but four point one billion dollars have been resolved the former holding has returned nearly one hundred twenty five billion dollars to creditors thus far but some people are still
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waiting hoping to get money out of lehman states at one of the last big claims still outstanding involved three hundred fifty former lehman executives who had invested some of their paychecks for retirement into deferred compensation plans and this case is probably going to take some more years to resolve i mean the human remains the biggest bankruptcy in history so if you're looking back at the collapse of u.s. investment bank lehman brothers sophie thank you so much now the human brothers downfall unleashed a financial tsunami that tore across the world ripping through europe asia and finally hitting africa earlier i asked our correspondent in nigeria funny such are how badly african countries were fact. christopher given the fact of course that this continent is made up of five fifty plus countries of course the effects are felt but the fact there are many faults you would have to zoom in really to each and every country of different political economic environmental makeup to say so to really get the detailed picture of what really happened here ten years ago now what we can say as
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a big picture if you'll remember of course the food crisis two thousand and seven to two thousand and eight so commodity prices were already volatile to begin with even before the global recession and that was through the reinforced by the collapse of lehman brothers the trickle down to a global recession that was especially felt very hard in sub-saharan africa but as a city if you zoom in into each individual country you will see a different effect a different consequence and dollar for example slipped right into recession as a result nigeria the country where i am right now could absorb the biggest shocks and even though there is a slowdown in the economy they could pick up some pace again so let's talk a bit more about nigeria what exactly were the consequences of the financial crisis for africa's largest economy. materia certainly wasn't spades if you look at the stock market at death time it twenty to can always dive it's lost seventy percent of its value logic contributes to the fact stats of the banking
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sucked logic control the stock market at the time there was a massive capital flight people taking their money of foreign investors to try to take all their money from and nigeria also we all know of course that this country is highly dependent on oil revenues that also made a huge slave adult war spot at the same time at that time that year was such a developing country that it wasn't just the oil sector but there was another sector that making sure that there isn't absorbance all of this chicken down effect and that is the non oil sector the agricultural sector was picking up some speed so all around the g.i. did not slip into recession it was a slowdown of the economy growth but no recession it could pick up pace again just a few years later and funny speaking about spooked investors the financial crisis put at least a temporary stop to risky investments now is that one of the reasons why china has become such a massive investor in african countries whereas europe and the us are liking behind
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. no one can really ignore africa and either europe u.s. and china the reason why china really put africa on the top of the our economic agenda has to be china itself china was so needy that time and still is in need of commodities in need of energy to boost their own manufacturing capacity that they're literally ascending delegates from china to each and every capital city of african countries so therefore of course it was the needs to impose their own economy to get invested here the u.s. is rather for focusing on. many factoring goats. recently but you can see very strong ties with europe as about now what i would want to point out have that africa is really becoming self-confident african countries do not just want to free trade or more trade with all these countries but they want to have a fair trade d.w. correspondent funny char reporting from lagos funny thank you so much. and ten
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years on what have you learned how is the financial world changed and are banks policymakers and consumer better prepared critics say the next financial crisis could already be brewing. the financial crisis is over the banks have been saved hundreds of billions in taxes pulled them back from the abyss but experts say the world economy isn't in the clear yes many governments were forced to take on massive debt to ward off the world financial crisis. the next threat is going to come from a very different quarter and it's going to what it's a very different nature than what struck the world in two thousand and eight it has to do with publicly held debt both in the united states and europe and that is the next term threat to the world economy and the results could be every bit as catastrophic and perhaps even more so than what happened in two thousand and eight take italy where sovereign debt has climbed from one hundred two to one hundred
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thirty percent of g.d.p. since two thousand and eight that means the country owes more money than the combined value of all goods and services produced in italy each year the united states debt levels have also ballooned in the same timeframe that france is jumping from sixty eight to ninety six percent of g.d.p. . the international monetary fund predicts the debt levels over ninety percent of g.d.p. hinder economic growth and it also limits government's ability to react if the economy starts to slow down which could kick off a financial death spiral leading the i.m.f. to the conclusion that the world is facing greater financial risk today than it was at the start of the financial crisis in two thousand and eight. u.s. president on strong support of the aids to move forward with new tariffs on iran's two hundred billion dollars in chinese goods that's according to u.s. mirror courts but it's unclear when or if the new sanctions will be in to implement
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trump he was trying to take an unfair advantage of the u.s. and the country's bilateral trade relationship. the russian central bank has raised the country's key interest rate by twenty five basis points to seven and a half percent the move comes despite pressure from prime minister dmitri who called on the bank to lower rates to keep cash flowing to businesses and individual lenders but central bank heads ignored the appeal arguing that preventing rising inflation took priority russia has been grappling with higher prices for food and basic goods as the ruble has. now yesterday turkey's central bank hiked its key interest rate to a record twenty four percent that was against the express wish of president add on the central bank's move immediately halted the nearest dramatic slide this year but sent of climbing again but only for a day not happy and today the narrow slit to get. to one on home
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turf addressing members of his a k p justice and development party he made it clear how he feels about turkey's central bank going its own way. didn't. make it bunk yesterday the central bank raised its interest rates very sharply. showing. talks of independence you're well well here you go have your independence and i will see the results of this i'm not patient person but my patience has limits. those words initially sent the lira down slightly by their zero point four percent reflecting concerns of an escalation in this spot between the turkish president and the country's central bank. but to compare the lira rose five percent against the dollar on thursday following the central bank finance meant that it was raising interest rates. and that wraps up our show thanks
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