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>> stock markets fall in asia and europe after moody's downgrades 16 spanish banks, so shares of some of those banks are up. $ hundred billion -- $100 billion and rising, that's the offer for facebook. controversy costs queen elizabeth's diamond jubilee lunch for royals invited from around the world. welcome to "bbc world news." i'm david eades. also coming up in the program -- china's most wanted fugitive is jailed for life for running a multibillion dollar smuggling operation. the olympic torch heading for the u.k. first stop, the southwesterly tip of england.

>> hello. thanks for being with us. stock markets in europe and asia have fallen. it's in response to the latest downgrading of banks in spain by the ratings agency, moody's. that move being taken after the continuing recession, unemployment, and the high price of government having to pay for borrowing. in the last hour, some of those banks have recovered sharply from their earlier falls. humphrey hawksley pulls it together for us. >> asia's opening market falls, underlining the global challenge. spain's banks downgraded. greece in turmoil. and europe itself without a clear solution. >> still likely, and it will definitely be causing you -- >> but even with greece factored in, spain has now become a flash point. the ratings of 16 banks downgraded because of the deteriorating economy. >> the biggest concern really

is the much bigger economy, much higher debt levels, very fragile banking system, a government that now starting to own parts of the banking system that's hugely unindebted and a economy that's in deep recession. >> america is determined to contain on the knock-on effect. europe is the biggest trading partner. the u.s. is just coming out of recession, and president obama is facing re-election. >> further growth and job creation, a balanced approach that includes not just austerity, but growth and job creation is the right approach, and it's something that we can -- when we discuss this with our european allies, we can point to some of our own experiences. >> the election of the new french president, francois hollande, has changed the debate, who now has a powerful ally in america. that may force compromise from those european governments like

germany that argue for austerity. now, in the tranquility of the american countryside comes the g-8 summit at the camp david presidential retreat. with each leader given their own cabin and time and space to think. first to arrive, it's mario monti, an economist and technocrat. his job in the euro crisis -- to stop italy being next. humphrey hawksley, bbc news. >> whether italy is next or not, spain appears to be right in the firing line. let's go over to madrid. our correspondent is there. tom, i mean, it's a bit of a yo-yo going on for some of these bank shares. >> that's right. let's talk about banks here. banks, really troubled banks here in spain, one of the old savings banks here, which really lent a lot of the money that funded the property boom which then went bust.

shares dropped dropped sharply yesterday. at the end of the day, they were down 14%. they bounced the day a little while ago. they were up some 20%. so, good news in that respect. maybe the new leaders are coming out yesterday saying, look, there's no run on this bank. people's savings are safe, main investors really feel that actually in the short term, at least, it's ok, and actually, another message coming out of the european commission that a bailout is not necessary, according to a spokesman there, that spain is making the necessary reforms, because, of course, the fear really is that the spanish government has the fourth largest bank out. it part nationalized it, and essentially, the solvency of the spanish government is tied up to a certain extent with the banks. the fear is that the spanish is short of cash too. >> yes, i don't suppose you'd expect the european commission to say anything other than it doesn't need a bailout at this stage. what is the feeling now, tom,

within spain? i mean, these sorts of ups and downs are difficult for many people to work out. how depressed is the spanish population, do you think? >> well, interestingly, we'd just come back from the biggest wholesale market here in spain, just on the edge of madrid, and there's lots of fruits and veg stores here, a big production here in spain, food production. basically, we chatted to a small business owner there, a guy who runs a fruit and veg family business, and he said, look, there is no credit at the moment. it's really dried up. spain does have a credit crunch, because the banks aren't providing capital for businesses like us, and he said if you get a loan, then you have to pay higher interest, and it's more difficult. so, you know, that's the knock-on effect for the economy. the big problem, really, aside from the unemployment, which obviously contributes to all of this, is how who get the economy moving again, how to get growth within the spanish economy. the banks are fundamental to

that happening. >> tom, thank you very much indeed for that. certainly, there's a lot of turbulence, isn't there? aaron is here now. perhaps you're going to help to explain why the banks -- i mean, we all know about the dead cat bounce, cashing in on bit on a big fall, but -- >> and you're talking about the banks here, and the spanish market having a bit of a rebound. i can tell you the exact reason why, and that is because there's been a lot of pressure, as we know, and as tom just mentioned, on the spanish government. it certainly has been -- what we're seeing now, the spanish government has said that they're actually hiring two independent auditing firms to look at the whole banks, the whole spanish banking sector. what they'll do is put a stress test, put the whole sector through a stress test and then look at each individual bank. that's good news. that's the markets going, ok, thankfully, finally some certainty. the spanish government is acting on top of that.

we believe it also hired goldman sachs to look at banks here, the troubled bank that tom was mentioning, the bank that was partially nationalized a couple of weeks ago. goldman sachs is going to look at banks here, look at all of its paper, its books, and decide just how big a hole they do have, that the state is probably going to need to fill. some are speculating that hole could be as big as $10 billion. this is the reason we've seen this sort of bounceback, but let's just take a look at the markets in general. it's still been a horrid state. let me get on. this is the asian markets. take a look at the nikkei, down 3%. that is the seventh straight week of closes. we haven't seen that for the nikkei since 2001. close to $4 trillion, david, has been wiped off the global markets this month alone. the euro, of course, remains under pressure against the likes of the dollar, and this, as we speak, is what european markets are doing. so, really, another fairly gloomy day. the big problem is, yes, we've

got the g-8 gathering in weekend this weekend, but still many thinking there's no light at the end of the tunnel, basically narcotics nut shell. they can't see a solution to this mess. >> no growth? >> no answer. >> aaron, i'll see you. thanks a lot. now, in spite of everything aaron has told us, there is some excitement and some money out there, because one of the most eager al waited stock flotations of them all, shares in facebook are going on sale in new york later at $38 apiece. that's the value that the company's put on those shares. that would make the company itself as a whole worth something around $104 billion. and all this despite the fact no one yet knows really the extent to which facebook is going to be able to generate profits. daniel miller is professor of anthropology at university of college london. he's the author of the book "tales from facebook." he's been telling me about the potential impact of the flotation of facebook from the site's users. >> once upon a time, when the

typical user was a student, maybe interested in politics, then issues of ownership, etc., might have impinged more. today, when it's a flobal form, people aren't really concerned about who owns the telephone they're using, and i think their interest really is what they can do with facebook. >> but in a way, sorry to interrupt you, but telephone is an interesting example. there are big teleconference companies out there, but everyone feels that they use it so much. >> i think that's the point. their ownership comes from their usage. the really creative egg of facebook is coming from the users. the things they do today with facebook, memorialization sites for the dead, stalking each other, these aren't things envisioned by the company, facebook. it's things that users have seen. the reason they feel an association with it is they've invested their lives in it, their friends, their families. it's not because of the corporation. >> it's very clever, isn't it, to have something in which you get loads of people to do loads of greater things for you for

nothing and thank you you for it and you make a lot of money. that's very neat. do you think over time people will wonder whether it's good that mark zuckerberg, for example, remains the controlling, as indeed he will be, very much the controlling element over this? >> i think the answer is entirely a wash. if the new concerns become too intrusive, if they make it more difficult for users to be creative, if they can see things being turned entirely to the interest of the corporation -- in other words, if they're made more for the corporation, that's probably not good for facebook itself. people want to know it's about form, they understand it, yes, they keep changing all the time, but nevertheless, as you said, they have their sense of personal ownership. if that remains, then i think people will simply develop it. >> do you think it's fair to say we still struggle with this idea of having advertisers being imposed upon us?

that would be the same with facebook perhaps. there is a threshold, we'll take so much, but maybe no more? >> except that the very fact that very few people have to click on the adverts surely suggests they're not really that interested in the presence of the adverts. so go back to intrusiveness. if you try to force it into the foreground, people may start to get upset. as long as it remains in the background and they feel they can actually ignore what's going on, they'll carry on with the kind of main industry, which is their friend, their relatives. >> interesting stuff, isn't it? daniel miller talking to me a short while ago. buckingham palace has confirmed the king of bahrain, whose regime is facing accusations of human rights abuses, will be among the monarches to attend a lunch this afternoon in honor of the queen's diamond jubilee. human rights campaigners have been arguing that the king should not be among those invited to attend the event at windsor castle because of the way pro-democracy demonstrations are being dealt with in his country.

we can go to windsor castle now. our royal correspondent is there on a bit of -- sort of a blip on what should be a grand day of celebrations. >> the controversy over the guest list is rather overshadowing what should be a lavish celebratory lunch at windsor castle. i think perhaps the most controversial guest is the king of bahrain. the bahraini royal family were invited to the royal wedding last year, but at that stage, they turned the invitation down. this time the king feels it is appropriate for him to accept, and he will be here for the lunch a little bit later on this morning. also, rather controversially, the king of swazz i land will be here. his critics have attacked him over his extravagant lifestyle, his private jet, the way he lives his life, when so many people living in swaziland are struggling, one of the poorest countries in the world. also, a little bit of a political snub from another queen, queen sofia of spain. she has turned down her

invitation on the advice of the spanish government over the rather thorny issue over the sovereignty of gibraltar. some problems for the queen with the guest list here today. >> and problems she presumablely had to work carefully through. maybe not personally, but with the foreign office. it would be their decision ultimately. what is the government's decision as to whether or not someone should be uninvited? >> buckingham palace is keen to stress, but this isn't a guest list that has been kwan you up by the queen this. guest list has been worked out very carefully in conjunction with the british foreign office, the british government. all sovereign leaders from around the world have been invited also. so, with no picking and choosing, that is really because the queen has always seen herself as stand ago part from any political or diplomatic row. so, on the advice of the government, everybody was invited, and there was no picking and choosing. buckingham palace has been very

keen to stress that. >> ok, thank you very much indeed. i'm going to take you to athens live, because greece's newly sworn-in parliament, remember those pictures from the presidential palace only yesterday, as they were all taking the oath of office? well, the parliament is filled now, so an election will be called. that's likely to be held on june 17. things moving pretty swiftly there. the government has four weeks obviously to run the show until those elections take place, and i wonder what the makeup will be. obviously it's a pretty scant picture there in parliament. perhaps no greater prize either, because they do not have much scope to do anything at all. but the indications have been from opinion polls that it's the anti-austerity left parties who are likely to be the biggest beneficiaries of a further general election. you're watching "bbc world news" with me, david eades. still to come in the program --

the bbc gets access to the relatives of the blind chinese dissident, chen guangcheng. apparently safe the children say that -- save the children say months of warnings have been unable to prevent a crisis in niger. the charity says the crisis, which extends across the countries, has reached a new level, moving to an emergency response. our world affairs correspondent, mike wooldridge, has this. >> alarm bells have been ringing about niger with its severe food crisis since late last year after chop shortages and food prices soared. eight organizations have been trying to mitigate the impact. today it's estimated that over six million people are affect in niger and 18 million in the whole region. save the children says a rising number of children now need medical treatment for

malnutrition. it's clear, the charity says, that the crisis is reaching a new level of seriousness. children are dying because of hunger. save the children says the culture -- save the children says a quarter of the world's children are suffering from malnutrition. it says it's concerned that g-8 leaders will shy away from making bold commitment to ensure that children have enough to eat, but also the right kind of food and nutrition. >> u.n. secretary general bank ki-moon says he believes al qaeda was responsible for the two suicide car bombs in the syrian capital last week. 55 people were killed and hundreds more wounded in the attacks near a military intelligence building. they were the deadliest in damascus since the uprising since president assad began last year. officials in vietnam say 34 people have been killed and another 21 injured after a bus veered off the road and into a river. the vehicle was traveling south from the central highland province to ho chi minh city

when it smashed through the railings of a bridge into a river. the bus' two drivers were among those who died at the scene of the accident. you're watching "bbc world news." i'm david eades. the headlines this hour -- stock markets fall in asia and europe after 16 spanish banks are downgraded. but the shares of some of those banks themselves are now up. facebook has set the price of its latest share offer, its first share offering, putting the value at more than $100 billion on the company. >> coming up in sports today -- robin's ready for the champions league final against his former club, chelsea, but he has a warning for his bayern teammates. just not enjoying it anymore, the world champion, casey stone, has said he'll quit at the end of the season as his passion has gone. and looking at the stanley cup

finals, los angeles kings are just one win away from their first finals appearance in almost 20 years. that's all coming up in sports today in 30 minutes' time. >> the chinese court has convicted the country's one-time most wanted man to life in prison. lai changxing was sentenced to this for a vast smuggling ring. he was extradited from canada to face trial. a court in the south eep province also ordered him to be stripped of all his passes. martin patience has details. >> mr. lai fled from china. he was in hong kong, and then he left in 1999 to go to canada. it was only last year that he was deported from canada and returned back to china. now, this was an almost decade-long, lengthy battle. mr. lai said if he returns to china, he could be tortured, even face execution. but the canadian government

extracted a promise from the chinese authorities that they wouldn't execute mr. lai if they found him guilty. they have found him guilty today, but he's facing life in prison, and as you said, he's been stripped of all his assets. >> martin patience there. we're going to stay in china as the relatives of the dissident, chen guangcheng has given details of retribution. the bbc has been getting the first interviews of the family members of mr. chen, as he escaped from house arrest last month and fled to the american embassy in beijing t. led to a diplomatic crisis between the u.s. and china. here's our china correspondent, damien gramatica. >> he's the blind human rights activist whose daring escape into the american diplomats put china and the u.s. at logger heads. for 15 days, he's been under

guard in a beijing hospital. just how chen gone chen managed to flee his illegal house arrest, eluding dozens of guards, watching him, is becoming clearer. first, he had to scale the walls of his house. he fell and broke his foot. he hid in a neighbor's pigsty, then felt his way late that night to the river. he couldn't swim across except the guards were asleep. villagers found him covered with mud at 5:00 in the morning, and he was driven to a town where he met an activist who spirited him to beijing. this is the first interview with his brother. when the guards discovered chen had escaped, he was seized and interrogated for two days and three nights. >> they sat me in a chair, bound my feet with iron chains, put my arms behind my back and handcuffed me. they yanked my hands upwards, then they slapped my face and

stamped my feet with their shoes. >> by that time, chen was safely here in the american embassy. the local communist party bosses were furious. >> i resisted for a long time. in the end, i couldn't hold out anymore. i didn't want to name those who helped my brother, but i had to. >> his wife says enraged officials also attacked their 32-year-old son, who tried to defend himself. >> so many people were beating him. his face was bleeding, and his legs too. his trousers were torn. he said, mom, i need to escape now. >> the son has been arrested, charged with attempted murder. in beijing, chen guangcheng, his wife and two children remain confined in the hospital. he told us by telephone today he still can't walk. his wife can only go outside with approval. they have been allowed to apply

for pass ports. if approved, chen guangcheng could be on his way to new york. the issue that caused crisis will be defused. they'll have to leave behind relatives at risk of further retribution. >> some reports coming in of an earthquake with a preliminary magnitude of 4.8 in eastern japan. the quake is said to have shaken buildings in tokyo in the capital. there are no immediate reports of damage or injuries. no tsunami warnings issued either, but 4.8, the preliminary magnitude of that quake. meanwhile, the japanese government is urging businesses and households to cut their electricity use by up to 15%. no great surprise, really, all of it 50 nuclear reactors have been taken offline in the wake of the fukeshim adisaster. they were severely shaken by the meltdown, which, of course,

was the result of the earthquake and tsunami last year. now, the clearest signal yet that the london olympics really are just around the corner. the olympic torch is to spend 70 days winding its way around the u.k. en route to london for the start of the games themselves, and it's beginning its 12,000-kilometer journey this weekend in the southwesterly english county. my colleague, ros atkins, is there, as he awaits the arrival of the torch. >> in this beautiful corner of england, you'll find an independent spirit and a different way of doing things. they still celebrate being part of britain, and it relies heavily on visitors for its income. as preparations continue to welcome the torch and the people who want to see it, it's been very good news for the hotel owners. but locals here will tell you this is about more than just

good business. >> it's pulling people together. >> hazel is a freeman of the town of penzance, and she volunteers at the tourism information center. >> the rest of the world will actually see the way the cornish people are, the traditions, what we can do. and, you know, it's just a wonderful place to be. >> you sound very proud. >> i love it. i love it. i've traveled all over the world, but there's no place like home. >> i met lots of people here who share hazel's enthusiasm for the torch relay, but we mustn't forget that they're one of the poorest regions in western europe. of course, there are particular economic pressures coming to bear at the moment. all of that is leading to some frustrations with the olympics. >> our town is a mess. this is is probably the best shopping town, and now look around. there are closed shops, charity

shops, nothing else. all the local businesses are gone. and i believe the money that's been spent on the olympic torch would be far better invested in penzance. >> while they're far from impressed, others here in penzance are busy make sure they're ready for the big day. >> treat us very professionally. we're thrilled and excited and a touch apprehensive. it rains and its windy, and it's cold at land's end. so some of the band will be wearing long johns under their costumes. that's the biggest challenge, the weather, i should think. >> the olympic organizers have pronounced the torch weatherproof. not long now until they're backplaying for the test. ros atkins, bbc news, penzance. >> some of the journey will be in the rain, no doubt.

>> make sense of international news at bbc.com/news. >> funding was made possible by the freeman foundation of new york, stowe, vermont, and honolulu. newman's own foundation. and union bank. >> this is kim -- about to feel one of his favorite sensations. at shell, were developing more efficient fuels in countries like malaysia that can help us get the most from our energy resources. lets use energy more efficiently. lets go. >> bbc world news was presented by kcet los angeles.