good morning from cnn rogue. >> happy friday and welcome to world business today. here are the top stories. there's a 50/50 chance standard and poors will cut the u.s. credit rating as lawmakers continue to lock horns on the debt ceiling. and scores of banks will soon be finding out if they're tough enough to withstand another financial shock. >> i think they've injected themselves into a situation that's beyond their comprehension. >> plus a former fed boss paul volcker has a blunt message for the ratings agencies.

quit meddling in things you don't understand. we have that candid interview in full. but first, though, we begin with the tide of debt that is causing problems on both sides of the atlantic. this of course with the results of the european banking stress tests out later on today. now, that is seen as one of the -- one of the most debted nations, italy, is of course trying to fight to stave off a bailout to become the fourth euro nation if it were to do so to request one from the imf, the eu and also the ecb. this was the scene just yesterday as lawmakers approved a four year, $57 billion austerity plan. the lower house is expected to adopt some of these measures later on today. and newspapers have been having quite a field day with this situation. let me show you the front page of one of the newspapers owned by the prime minister

berlusconi. they're on the bow of the titanic as that fated ship sinks. this is in reference to a comment made yesterday saying the situation of the country finds itself in at the moment is akin to the sinking of the titanic and not everyone the first class passengers are safe. >> you can always count on him for a very colorful sound bite. and another metaphor, the iceberg is all that debt under the surface. meanwhile time is running out to raise the u.s. debt ceiling. lawmakers are still at odds. another warning about a possible downgrade of u.s. debt. this time from standard and poors, has raised the stakes even higher with no compromise on either side, the u.s. stands to run out of money on august 2nd. but perhaps there a glimmer of hope on the horizon. we'll take a look at that a little bit later on in the show. so with all of that going on, investors have plenty on

their plate this bring. so let's see what's happening on the stock markets. we start in europe where the they're just over an hour into the trading day and this is how things stand at the moment. all major indices down in negative territory. there's a lot of caution there ahead of the results of the stress tests. those will be released at the end of the day. these stress tests are the third in three years and there's a lot of concern about which banks have the most exposure to debt from greece, ireland and portugal. so that's the main focus right now. and also the recent warning from standard and poors about u.s. -- the u.s. credit rating. nina? >> pauleen, let's bring you new that's come out just in the last couple of hours. credit suisse has not confirmed that it is under investigation by the u.s. department of justice. it issued a statement saying that the investigation is

focused on the private banking services that it offered to u.s. citizens and that it will fully cooperate with the authorities to try and resolve queries linked to those particular services. here's what's happening in the asia pacific markets. the markets were mixed on this friday as investors worried about that standard and poors threat to cut its raising on america's bonds. it was a little bit of a mixed bank. shanghai and hong kong, it was a choppy session where property stocks were under pressure. they will limit the number of homes families can buy in smaller cities. china is trying to control housing speculation after selling increased 31% by last month. but by the end of trade, it regained ground and ended the day up by almost a third of a percent there. the main aussie benchmark town by about 0.4%.

and stocks on wall street started strong on thursday, but they limped to the finish after ben bernanke weighed in after hinting at what could have been interpreteded as another round of stimulus, bernanke told lawmakers that the fed is not ready at this point to take further action to boost the economy. at the close, the dow was off by half of one percent, the nasdaq had lost more than 1% and the s&p 500 had fallen about two-thirds of 1%. after the bell google was up 36% from a year earlier. as we were giving a hint earlier ouks the banking sector here in europe will be in focus a bit later on today. these european banks have had their second health check. results due out a bit later on today. midday new york time, we'll know

an awful lot more about what's on their balance sheets, how he will any or unhealthy some of them are. they'll be telling us more with what's expected from these investigation tests. >> that's right, this is the third health check on the euro zone's banks. analysts expect up to 15 of the 91 lenders tested to fail, that's double the figure last year, but not everyone has faith in the results. last year both irish banks that were tested passed. the bank of ireland and the allied irish bank. we remember what happened to those. both collapsed and needed bailouts. it left the people questioning the viability of tests. so what is the solution? stricter standards this time around. they're looking at reserve benchmark p 5% core capital, the ability of banks to happen

contraction in the euro zone in 2011, a 15% slide in euro stock markets and the ability to handle potential trading losses on sovereign debt. not all are taking part. only 90 results are to be released and the german bank withdrew on thursday to avoid public fame you're. they refused permission for the publication of results and the withdrawal has to some extent challenge validity of these tests. so what are the implications if a bank fails? they must show plans to plug the shortfall by the end of the year. they can request tax payer money only if needed. and if it only just passes, it's forced to improve its capital offers. back to you. >> of course where i am in italy, a number of the italian banks hold no less than 3.36%. allegations that news corp

journalists hacked in to phones have shocked the world. now it seems they've crossed the atlantic and the fbi says it's launched its own investigation into the claims of september the 11th victims against rupert murdock's media empire. we'll have more on that as world business today continues. when i got my medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket. these are the only medicare supplement insurance plans... exclusively endorsed by aarp. when you call now, you'll get this free information kit...

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investigations into whether its journalists allegedly tried to hack into the voice mails and phones of crime and terror victims in the united kingdom. and on the other side of atlantic, the fbi has now said that it is looking in to allegations that murdock controlled news outlets tried to tap into the voice mails and phones of september the 11th victims and also their family. and now there's also cause for congress to investigate. brian todd reports from washington. >> reporter: a law enforcement source tells cnn looking into the news corporation is now a high priority, so high that the fbi has already launched an investigation. the source says the probe is focusing on allegations that murdock's employees or associates may have hacked into phone conversations and voice mail of september 11th victims and their families. anyone acting on behalf of news corporation is being looked at the source says from the top down to janitors. frank loudenburg also believes

news corporation violated federal law. >> would you want to hold hearings? >> certainly that would be a serious consideration. i'm waiting now for a return from the justice department. >> reporter: in canvassing capitol hill, we've learned of growing sentiment for congress to delve into the activities of rue further murdock. most of those calls are from democrats. murdock is a big backer of republicans. if more momentum builds for probes, there are cautionary tales for lawmakers, reports that the tabloids sometimes turn the tables on those who investigate them. most of those accounts date back to well before this scandal ploou up in the media in recent weeks. martin moore of the media standards trust tells us when british parliamentary looked in the tabloid press a couple years ago, he heard of allegations that they were discouraged from

repeatededly inviting rebecca brooks to testify. >> the