I am olivia sterns. Coming up on the program, the worlds greatest golfer gary player shares how to perfect your swing as the u. S. Open tees off today. Our top story. Bnps coo is stepping down. Pressuring theen worlds biggest bank to dismiss de courcell. This link to investigations over sentient violations . Bnp is letting him go of his own accord. It was his decision to step down. There has been a lot of indications in the media that u. S. Regulators were calling for his departure. We should be clear. He has not been accused of any wrongdoing. I want to ask you about your sense do you think bnp can afford this if they get cut off from the u. S. Dollar Payment System . It is a lot of money. I do not think it was their intent to force the bank out of business. Spiraling bigger and bigger. Every bank has to pay more than the last one so the regulators can show they are taking a very aggressive approach. Fair, it is not the reason that is up to 10 billion because of the sense that bnp was not cooperating with investigators. They did cooperate. Regulators said they did not. Theyre seeking a 10 billion fine. Obviously, someone has the power to exert that sort of fine. You know, it is what it is. The coo is stepping down. We will see more heads roll. Yeah, there will be some more heads rolling. The top banking regulator in says he wants other heads to roll. There is a lot of pressure on regulators these days to hold individuals responsible. They took a lot of criticism amid the financial crisis to sort of a loud banks to harmed. Putation was entities have reputations, but it does not prevent someone who was involved with someone and getting a job at a separate bank. It is harder when your name is been associated with wrongdoing at this level. Thanks. Moving onto our other top story but staying in the world of finance. George osborne has a message for currency riggers jailtime is on the time. They will announce plans to extend the laws. Lets bring in caroline hyde. Good morning. Watch out. That is George Osbornes message to traders. Watch out if you are foreign currency trader. Watch out if you are commodity trader or fixed income trader and you dare to. Mutilate the market. Youentioned how he outlined could face criminal charges. If you have many belated li libor, already if you manipulated that market, you face unlimited fines and up to 7 years in jail. 9 firms have been forced to pay 6 billion. There are worries that the foreign currency markets have been in the belated in old markets have been manipulated. George osborne one year at head of the general election is talking tough. He is talking to the electorate, not just the bankers. He is using words trying to relate to people at home saying markets set Interest Rates for peoples mortgages. Exchange rates for exports and our holidays in the Commodity Prices for the goods we buy. Relate to theo person at home. This is why that manipulation has hate you at ho has hit you. He wants to start penalizing with criminal lawsuits. It is interesting. It is a similar sentiment that is driving the story we were talking about with bnp, this e sense there has not been enough individual liability over all this commercial action in the market. Staying with the libor story, u. K. Seems to be carving their own path. Osborne says they will not follow the European Unions rules. Why are they going it alone . Interesting. Maybe that it is another election ploy. There is a referendum promise by the conservative government and United Kingdom trying to step away from the eu. That backlash after the European Union that european Member Parliament were many feeling antieu, playing to that crowd a little bit today as well, saying we will not take your rules on market manipulation from the eu. We are going to enforce our own. We wanted to be strong, perhaps even stronger. But what this is potentially is looking after our own industry. Remember, the Financial Markets make up a huge part of the u. K. Economy in terms of our service sector. They want to protect that. They do not want to they want to make sure it is not too harsh. We stepped away from other eu that on transaction taxes have been imposed in the likes of germany and france. We shied away from that. Once again we are shying away from eu policy, making our own regulation but notably, if you are a foreign bank working in the u. K. , you will be under own own auspices. Or jpmorgane bnp, working in the u. K. , it will be under u. K. Law whether you manipulate foreign currencies and the like. It will be the courts you face here. Caroline hyde. Unless you have been living under a rock, you know the world cup begins today. Brazil will play croatia in the opening match. Organizers have faced controversy over preparations for the tournament but investigators investors are viewing the country as an opportunity. Billion spent on the tournament, by far the most ever. Will it be worth at . Unless you have been living under a rock, you know the world cup starts today. You also know that according to the media, the country is a dump. That has been the whole focus of all of all the media attention, extremely negative here that is why the contrarians say this is a perfect opportunity. If you look away from the coverage, bmw is there and apple is there. Was writing them for years ago saying he would never open a store there, they built the store there. Also, financial investors. Good. Sayhs is its they say all the negativity is priced in. All the pessimism you hear from the brazilians that is a good thing because they will change things in their country. What you are worried about, pimco says, is if they were apathetic. I heard a similar thing from mark mobius earlier this week. Franklin templeton. He says he is very bullish on brazil. Give us then the basics. The fundamental far this one, brazilians are young, average age under 30. That means they have a huge Resource Base and they have workers as far as the ey can see. Two, it is a very democratic nation. They protest. Three, increasingly educated. The last government when it was in power really pushed this pro gram which effectively they took all the surplus money that was kicking around because of 8 Economic Growth and told poor families if you send your kids to school, we will give you a stipend. That reduce the poverty rate by 50 that was very effective. Finally, they are increasingly wealthy. It is always relative, but if you look at the middle class as brazil defines it, that is 109 Million People. If you look at their wealthiest group for their income brackets, we are talking about the brazilianaires are a dozen. People that are earning 30,000 a year. 29 Million People. Five years ago that was 13 million. Thats who bmw lands to send their beavers do their beemers to. High, but really these people have gotten the consumer bug. That is the argument is that a the from, away from negative coverage there is this big story. Story. G consumer we will have more on the world cup later on in the pulse. We will be joined by a senior for total analyst for ihs. Turning to check, eric schmidt is on a Charm Offensive in germany. He opened a new start up in berlin called the factory. Hans nichols is in berlin. Hans, has the german vice chancellor warned that google might need to be broken up. Argument is that there are a lot of Tech Companies in germany that cuts against his argument that google is a monopoly. Eric schmitz really needs these Tech Startups to succeed. He he said he welcomes competition. Being ericthis schmidt, he could not keep himself from criticism of politicians. Listen to the dig he got in as he was praising the german minister who introduced him. We never have politicians that get it right until now. Right . So its very, very important. I do not fully understand the german system provides that you to eventually become the president of europe where you could actually get the rest of the countrys fixed. Facesarly google headwinds in europe. They have this right be forgotten. This Court Opinion out of brussels. They have antitrust and some tax issues. Eric schmidt also talked about how slow the internet is in germany. Another dig. Saying there is such a thing called cyber. I have spoken to a lot of people who say that it feels nowadays that regulators are almost gunning after google the way they were gunning after microsoft. They do not want to see is shaken up because there is so much power. The big story as you mentioned is the right to be forgotten. Did schmidt say anything more on that . Public approach on this is that they are going to try to comply with it. Listen to how he had to put it. We are disappointed by this ruling. There are, located tradeoffs involved. Defense an example, in of their decision, they are trying to address issues that people have in the best way they can. So we decided we are going to work very hard to comply with the spirit of what they are doing. Olivia, you can take down the state. H companies in the google, facebook, or amazon they face regulatory challenges in europe. Both in brussels and increasingly in berlin. Many decisions berlin is going to make an regulation may be followed throughout europe. Google is here in europe. A new factory that is mostly on the tech sdide. Challenges ahead. We will see how successful schmidt was in appeasing his critics. Hans nichols there, our International Correspondent joining us from berlin. Ilianaires. Azxl we will meet a wealthy family behind four of the tournament stadiums. The brazil brand all over the world. I think i dont believe that the riots will affect the game or the tourists. That was the president of one azilsults br biggest Football Clubs. The on security and one of most dangerous countries in the world. Lets bring in the senior principal analyst ohn a latin America Country team at ihs. Good morning. Half a million tourists expected to show up in brazil for the world cup. How big is the Security Threat . 600,000 foreigners. We are talking about 3 Million People there. There are issues. The main concern is infrastructure. The bottlenecks and some cities. The airports are not ready. Some stadiums are half finished. Thats the main concern. Urban transportation is a concern and some cities. In sao paulo there is only a metro line that takes people to the newest stadium, but at the same time, there has been this threat of industrial strikes. I would say the main reason the infrastructure constraints and quite critically the threat of industrial action. Yor example, the just toda workers at the rio airport are going on strike. To increase salaries. For us, this is our main concern at the moment. We have been covering this for weeks saying it does not look like resell is ready, that that brazil is ready. Is it as bad as you thought it would be and is that going to disrupt the game if there are stadiums that are still today have finished . I think they will muddle thr ough. They have some decisions with help, for example, on game days. The metro in rio and sao p aulo, only people with game tickets are allowed into the metro and that will help. Three hours before in three hours after the game. Secondly, theyve decided to bring forward the school holidays. In brazil, one of the main reasons of traffic is people taking children to school. People in brazil are on holiday right now. That kind of thing will help. Some airports in sao paulo avenue terminallike a new terminal. Fantastic terminal but it is not ready. 16 airlines are supposed to be operating from there. Only six at the moment. Basically 90 of people will arrive to the old tournaments the old terminals. Brazil will shut down. I have been in brazil for world cup four years ago. People will not be allowed on the subway in chile have tame game tickets. Thatillion in the country has poor schooling. Contrary to the general perception, there is a problem in brazil. The clash the middle class has been the main beneficiary of growth. Taxess. High when you pay high taxes you expect good Service Provisions and they are not getting that. Brazil pay say that taxes similar to europe and get Public Services similar to africa. They are becoming more demanding and demanding Better Health and education. That is the main challenge. On the other hand, brazil really needed this infrastructure. Ispersonal view is brazil going to benefit in the midto longterm from and for structured. For the olympics it will be better. Brazil really needed better ports, better airports, and better highways and because of the world cup and the olympic games, that problem has been addressed. The only things they have not done them on time. But in the next five to 10 years, brazils capacity to handle passengers come a air traffic will double in capacity and it will be good for the country. The economy does appear to be stalling. It is growing at 2 . Something the u. K. Would love to be doing. A most any nation in europe. Razil. Low for b there was a lot of frustration that the president had to put in reforms. In terms of ease of doing business brazil ranks 116 out of 139. What are the prospects for Economic Growth and reform . That is the main challenge of the president. The formerula, president , was very lucky because he had the best of times. He had the commodity super cycle. He had the discovery of oil. He had fantastic. Prospects. When rosel came in, it was difficult times. Brazil has done Macro Economic stability quite well. But the second one which is structural reform, cutting taxes, making the labor market more flexible, that is what hes expected to address. But we have serious doubts about that because she comes from a leftwing government. She represents a leftwing party. With that we doubt she will go all the way to address that. Possibly will have a very economic anemic growth. Ihs is predicting 1. 5 growth for this year and 2. 4 for next year. In 2016 is when this investment makes a difference. Also when Oil Production will increase will make a difference. Still, it will be below the potential that brazil has. If they are not actually in fact if you think she is not it, they say do that she is losing popularity as a result of the world cup. Carlos, thank you very much for joining us. A senior risk analyst at ihs. Stay with the pulse. Back in two with more. Welcome back to the pulse. We are open rolling across the board. Open after it of the late start because your next had a technical issue aw week before its own ipo. Trading higher in the core of europe. Stoxx 600 trading flat ahead of u. S. Data. Initial jobless claims should improve as well. In europe we are looking for industrial production. Technology trading higher. Miners trading lower this morning. Still concerns about growth and for investors as well, geopolitical risk back on the agenda. Iraq, the key concern. Eda capturing the country secondbiggest city. Worries there. Lets have a look at what were watching in terms of stocks because a lot of it has been focused on france. There was a delayed opening the check out m a in this industry. Back in a moment. Welcome back. Live from Bloomberg European headquarters. Hese are the top headlines militants from a breakaway Al Qaeda Group are extending their control over parts of iraq. Capturing the birthplace of saddam hussein. A Warnings Issued about the Global Housing market. Holocene makers must take more steps to prevent another policymakersh must take more steps to prevent another property crash. The bank also faces a possible fine of up to 10 billion. Brazil has spent seven years and more than 11 billion getting ready for the world cup. Critics say it is a waste of money, but the president defends the spending sing preparations for the tournament will improve results infrastructure and help stimulate the economy. Will it ultimately be worth it . Joining us is the ceo of a spanish infrastructure company. Thank you very much. You are doing business for some companies in brazil getting ready for the world cup. Do you think it will be an economic benefit for the country . Thinghink it is a good for the country. It is good i believe it is a positive thing for brazil and for the companies. What is the Business Environment like down there . Brazil still seems to have this. Yzantine bureaucracy we need to they are doing better. Recently, they were in a different situation. This is coincidental with the emerging middle class. It is important for the country. Brazil recently was totally different. My belief it is this kind of thing that is energizing the country and changing slowly the consistency, the way to do things in brazil. On and hewas just said their forecast is for the economy to grow 1. 5 this year. Are you not concerned that things are slowing down . The other from thing that is very important is to consider the midterm, not only the shortterm. One of the problems we have now is with a shortterm benefits. Next 10to look over the years. Of the greatquence advance in the last years. Future oftive for the a great country. 73 of the credit cards are in brazil. 38 of the internet is an brazil. Future. Be the you are saying there is an emerging middle class and that is good news, but this is something we have heard before. The story line that brazil is on the brink of booming is something people have been saying for 15 years. Why is it still such a poor country. Brazil is the constant within ntinentdent a confiden within a continent. It is important to put it on the table. When he to shortterm analysis the evolution is going to be positive. It is not so far away. It is no longer than 10 years. 10 years is nothing for transforming a continent. Brazil is much more different than 10 years ago. Creatings the cup been opportunities for you specifically . One year ago, we were off brazil. We work in the northeast and southeast. Electricity, and telecommunications. The middle class is going to use it for the next 100 years. We are strong believers that we can make it. Positive that is the reason we are growing and investing mark in brazil invest