Of the executive committee with allegations of corruption or being involved in inappropriate behavior. Beans that are processed through a cap. And, find out how the u. K. Is beefing up its naval power. First, we begin with a bloomberg exclusive. Jpmorgan may have unwittingly helped bnp paribas violate u. S. Sanctions according to a person familiar. Billionch bank paid 9 for processing dollar transactions for countries such as sudan. Jpmorgan has not been accused of any wrongdoing. Here with more is caroline hyde. Good morning. Walk us through the details. The saga continues. Bnp paribas has admitted guilt. 9 billion euros in terms of what they had to be fined. They were using jpmorgan as well. Unwittingly, jpmorgan was involved in this, helping hide billions of dollars of deals related to banks in sudan, cuba and the like. It was in 2004. Paribasutives in bnp came up with a plan to use jpmorgan. They had already caught the eye of u. S. Regulators. They promised that they would abide. How did they make compliance better . Instead of using bnp paribas new york, they used jpmorgan instead. They use a network of u. S. Banks. Helpused arab banks to disguise the dollar transactions. Banks wouldtellite pass this payment onto jpmorgan without any revelation that it is related to sudan. Suddenly jpmorgan had this payment that it passed on without knowledge that it was related to sudan. Thisaribas thought that was the way that it could avoid any sort of legal repercussions. So that was the whole tactic, to deliberately get around, or they were just trying to skirt the sanctions . This is all according to legal documents. Initially they got advice from lawyers. They got a memo from the lawyers saying, if you use a u. S. Bank you could protect your self from sanctions. Later, the lawyers said, this is a legal. Bnp paribas was warned that this would be illegal, if they were trying to hide these payments by routing them through jpmorgan. You cannot avoid punishment by going through a u. S. Bank. Just because you are not going directly, doesnt mean that you are not getting sanctions. Jpmorgan, and also the legal firm, are not accused of any wrongdoing. Of course, this all comes from the back of bnp paribas leading guilty to almost 9 billion. They were using jpmorgan. Was , jpmorgan itself to the tune of 8 million. They too had been involved in sanctions transactions but they hadnt done it on purpose. It had been recklessly failing to exercise a minimal degree of caution all caps to get but it wasnt intentional. They were inadvertently helping move sandra asked move transactions. When you hear about these tactics, it does help put perspective on why the fine was 9 billion. Caroline, thank you. It is time now for another bloomberg exclusive. As the world cup enters its quarterfinals, corruption allegations continue to follow fifa. It is fighting claims that qatar bribed officials to host the 2022 world cup. I spoke to Peter Goldsmith, a member of the Governance Committee about the scandal. How would you describe the culture . The culture was one of they saw themselves as a family. Families dont like other people interfering in what they do. They think they know best. At a time when fifa didnt have such a sway in the world as it has today it now produces an income over 1 billion from a single product. They are faded as World Leaders wherever they go. The consequence of that is that their culture was not modern, not transparent. Quite simply, the allegations are that fifa is mired in corruption. We have seen scandal after scandal. Having worked with them, what do you think . It is annt deny, extraordinary state of affairs when you find a number of members have to leave office because of allegations of corruption or being involved in inappropriate behavior. It did have to change. The question is, have they done it . The president said he was setting out to reform fifa. He said he wanted to leave a legacy of a clean fifa behind him. There is still a long way to go. Not least because they havent demonstrated that they have the cultural willingness to embrace this change. Do you think stepladder blatter can cleanup feidafa or does he need to step down . Something he said a week ago really shocked me. When the allegations were through ant was english newspaper about what had been happening in qatar. His response to that was to say that it was a racist allegation because it was directed against leaders of the african associations. That really isnt taking this seriously at all. On theto dismiss this basis that it is racist doesnt demonstrate the commitment that you expect from the top man in an important organization. It has to demonstrate it is clean, transparent and ethical. Lord goldsmith telling me needs to make a major commitment to transparency. Later on, we will keep the focus on football. We will be joined by brazils ambassador to the u. K. As his prepares to take on columbia. This weekend, Angela Merkel heads east for an official visit to china. It is merkels seventh trip to china while in office. The focus will be on Economic Cooperation and trade. Lets bring in david tweed. Great to see you. Merkel will begin her trip in western china. Why is that . Du. She is going to cheng it is interesting that she is going there. It is a favorite of xi jinping, the president. He is trying to encourage investment anywhere in the western part of china, also in the interior. Most of the investment that you see in china does take lace on the coastal areas. That is where you have the fast economic growth. You have this massive migration of people to the coastal areas. Even though chengdu is a 14 million peopled city, a massively big city, it is still considered to be second ranked. She is going to visit the vw plant because there is indeed german business and factories in chengdu. She will go there. She has the ceo of volkswagen with her along with a whole host of other ceos. They might be thinking this is perhaps the place to have their next investment. David, i also heard you telling anna that this is a region known for spicy food. Apparently Angela Merkel likes chiles. Apparently so. Who would have known . Szechuan cuisine is like with is and theed chil special peppers that you put on your lips. You get sort of a numbing sensation. There is a chinese word for that which i dont know. She is going to go and learn how to make a very typical dish called gongbao chicken. She is going to learn that and cook the dish. I wonder whether she is going to get rated on that dish by the chefs. If she does, i am thinking she might get 10 out of 10. It will be interesting to see. Also Hillary Clinton well known for liking peppers. Big changes at the European Central bank. The ecb announcing it will Start Publishing minutes of policy meetings. Or catching up with its peers . Lets ask manus cranny who has been covering the conference. Which is it . I think it is a little bit of both. I think it is draghi trying to say that it is time to change how often we get together. Expectation, expectation, expectation. He wants to change what he calls the selffulfilling prophecy. Every time they meet, every time we get an announcement. Policy is not based on short termism. That is what the message is. The minutes are about delivering clarity. There was a lovely line in the bloomberg story. It would be absurd. There is enough clarity in the world. Is it going to be everybody on the committee . Delivery,t transparency. It is about disrupting. Who would have thought . Thatitially, the fear was revealing all that information would provoke too much debate, and less negotiation, and it would open up officials to criticism. A big step forward for transparency. We also wanted to get more details on Mario Draghis efforts to get lending going into the economy. It sounds terribly complicated. Walk us through the details. It is. Two types of banks in the eurozone, those who are lending and those who are deleveraging. Two clear pools. People who are maintaining, increasing lending, borrow some money. You will be able to keep the money for four years. I am calling this the new draghi put. Given what is embedded, the program is attractive to bonds with a dynamic performance. This is the advice for all banks. That is for the strong. He is basically saying the banks that are deleveraging, reducing lending, stop. Hit the pause button. If you slow down on your deleveraging and stabilize into 2015, you too can have money for four years. I think too that end, it is about addressing both of those. The people who are deleveraging, that is who he wants to stop lending. Manus cranny, thanks so much. Still to come, adm goes wild with what could be its biggest ever acquisition. More on that potential deal coming up later on the pulse. Above dow has closed 17,000 for the First Time Ever. What a way for wall street to celebrate july 4. The u. S. Added more jobs than economists had forecast. I am joined by the director of Economic Research at the National Australian bank. Thanks for coming on. What do you make of this jobs number . Well above consensus estimates. What is your reaction . Are you revising your growth forecast . We will. Q2 will see a massive bounceback. We could see a 5 annualized growth rate. Numbers would suggest the economy is doing far better than anybody predicted. Nowthe fed, the issue we have is they think the Unemployment Rate would be between 6 and 6. 1 by the end of the year. We are there already. The risk is, markets are going to start pulling for fed tightening. They would expect the fed to act like the bank of england. The headline numbers are great. The Participation Rate came up a little bit. It had been following the past couple months. Tix. 1 is where unemployment is down to. 6. 1 percent is where unemployment is down to. What is your thinking . We were expecting soft wage growth because wages were strong last year. You had a very strong 2013 number. 2014 was always going to be weaker. I expect that from now on, positive base fx will come through. We will expect accelerating wage growth. We could be at the feds estimate given the current rate of unemployment declined by september. What does yellen do with this . I think they need to start making the markets more twoway. Recently, yellen has been very dovish. We initially thought when mark carney talk about the prospect of a rate rise, that this was Central Banks telling markets volatility is too low. Yellen so far has been dovish and more so than we had thought given the fundamentals. Maybe we will have to see some other fed governors talk about the need to tighten. Sounds like we are beginning to hear mark carney do that. Do you think yellen is behind the curve . That is a risk that they will be. You can understand why. Turning now to europe, what is your take on what we heard yesterday . A little more clarity. Every six weeks, we are going to get minutes. I think the move is interesting. You can see draghi saying, we believe the markets are expecting us to do far too much on a monthly basis. We dont know when they are going to meet but if we assume they would like to take august didas historically the ecb until they were made to come was anasically august off month. They will have a cycle which is fairly similar to the fed. What they are now saying is when we start to tighten rates, we are not going to do much. They have only got six chances now to increase Interest Rates. It is another way of telling markets we are not going to tighten policy. Back in june we were told there were 400 billion available. Now it is a trillion. It just comes out in comments. They are trying to say there is a vast amount of money to use. Is it going to the affected now that it is one trillion euros . It depends whether you think it is supply or demand side. If it is supplydriven, banks dont have available funds, then it is going to work. If you think it is because there is no demand, then it is not going to work. If no one wants to borrow, it is not going to work. If it doesnt work, we go down the road of full qe. The ecb can only act with unconventional policy measures within its mandate. That mandate does not involve qe. It seems to involve tightening policy sooner. The European Central bank has already extended what they can and should do. They are still talking about asset purchases. Do you think that is the way europe should be moving, to move the risk from the banks Balance Sheet to the Capital Market . About a year ago, there was a discussion about using the European Investment bank balance mes. To lend to ske it would either by loans from the banks or it would loan directly itself. Nothing has really happened there. Yesterday, draghi was talking about the abs market being around 1. 5 trillion euros. That is bigger than most other estimates. They are getting on with the bank of england to kickstart that market. If you tell banks you can fund at 25 basis points and we will buy it back from you, then maybe you might be telling banks there is free money to be had. Finally, your growth forecast for the u. S. We could grow at 5 for the second half. What is your outlook for europe . Europe seems to be limited to around 1 . Euro zone growth will accelerate in the second quarter. Germany is going to slow. I would not be surprised if france went into recession. Overall, europe still lags behind. Thanks so much. Up, apparently it tastes good. Would you pay 300 pounds for a cup of coffee that has passed through a cat . That is right. That is what i said. That is coming up next on the pulse. Welcome back to the pulse. Lets take a look at how the markets are trading. Manus cranny has your asset check. There was a song once called fade to gray. European equity fund guitar fading just a little bit. We had a threeday rally. This is trading at the highest valuations since 2009. Will profits translate into valuations in the United Kingdom . Germany, factory orders down over 1. 1 . The dow closing above 17,000. But, look at this. It is coming off a fiveyear high. Dollarsterling. We had five straight weeks of advances, the longest winning streak on sterling since 2012. For those of you who are boggled by technical levels, they are important. 1. 71, where do i pluck these from . Highs on dollarsterling. There is one story in town and it is about the bank. What does it mean for the rest of hungary and romania . That is where the problems are. A whole new discussion in terms of what is going on in Eastern Europe. Thanks so much, manus. It is time for todays pulse number. 2 billion pounds. That is the cost of the royal navys biggest ever ship. Aroundster vessel weighs 65,000 tons, carries 40 aircraft. To christen going it with whiskey, not champagne. Welcome back to the pulse live from bloombergs European Headquarters in london. I am olivia sterns. Here are the Bloomberg Top headlines. President and Angela Merkel have agreed to coordinate steps against russia. Going to an email statement from the white house, if russia doesnt reduce tensions in ukraine, the powers may pledge more potential costs for russia. Jpmorgan may have unwittingly helped bnp paribas hide transactions. Frances biggest bank agreed to a 9 billion settlement for violating u. S. Sanctions. The french bank hid billions of dollars in transactions. Some of the money was transferred to jpmorgan. Jpmorgan has not been accused of any wrongdoing. Our church and midland is said accordinging a deal to people familiar with the matter. The takeover would help adm diverse off i and gain a bigger foothold overseas. Companyvors is a swiss that manufactures natural flavors. Here with more is caroline hyde. Tell us about the reasoning behind this deal. Is this about the demand for more Natural Products . We are trying to feel that we are putting Better Things inside our bodies. This is what wild flavors sales itself on. It says all ingredients are natural. Whether you are drinking a decorate, a flavored beer, all the flavorings might be coming from wild flavors which is based in switzerland. They are technically allnatural. They also provide them for tea infused cold drinks or vitamin waters. This is what the Company Really does. Even though it is 83 euros old, we are getting 83 years old, we are getting very novel. It is interesting, the price tag, 3. 5 billion euros. 66 more than it was valued at at the beginning of the year. We knew the owners of wild flavors were thinking about their tactics. At that point it was valued at about 1. 5 billion euros. This bidding war ensued between adm and a japanese company. Flavoring that isnt quite so natural. They were looking to get into natural Food Products as well. So it is on trend with everybody interested in Natural Products. Certainly on trend with all the m a we have seen. Who wins from this deal . It is interesting because it is a privately held company. The bulk of it is held by a certain han peter wild. This company is affiliated with capri sun. That became the Market Leader in europe and america for jews strengths in those little foils. They even had mohammed ali for adverts in the 1970s saying, i am the greatest. Boxing, capri sun will be the greatest. The 526parently wealthiest person in the world. He has 3 billion to his name. Also, another big winner, kkr holds 35 of wild flavors. Another big sale for private equity. Thanks so much, caroline. Now, the biggest loser this morning on the stoxx 600, the Austrian Bank says it will have a record loss in both hungary and romania. For more, our Bloomberg News reporter joins us from vienna. Good morning. Tell us what you know about these provisions. Why is the loss so much wider than they had initially predicted . Two things at play here. Hungaryhe losses in which were expected. Parliament is going to sign a law that would force banks to refund some fees that are deemed unfair to clients. That part of the loss is about 300 million. More or less expected. What was not expected were the losses in roma