A caught 10 minutes of quite a preposterous episode today: The Treasury Select Committee grilling five well-known journalists about their coverage of the credit crunch and especially Northern Rock.
The caption underneath kept coming up with “should coverage of the credit crunch be restricted?” Ridiculous!
The five business journalists included Robert Peston, Jeff Randall and Alex Brummer. As you might guess Robert Peston was the centre of attention.
The MPs questioning centred on responsibility. Shouldn’t Peston and his colleagues hold off with stories to give Northern Rock a chance? Hadn’t they created the run on the building society? Did they have inside information and mysterious sources?
The rebuttal was that Northern Rock was a badly run business. It had failed because its wholesale division had stalled and big investors saw the writing on the wall and took their money out. Holding off on a story for 48 hours would not have saved it.
The run was in many ways Northern Rock’s fault. Their website had gone down because the bandwidth capacity could not cope with visitors and this created panic.
The queues had built up because they have too few branches for their client base and too few staff were put on duty.
And if a financial institution is badly run, whose fault is it when savers want to take their money elsewhere? And more so when it is on the brink of collapse?
As for the insinuation that the journalists had shady sources, well that proved to show the MPs as lacking an understanding of their subject.
Peston maintained he had many sources and had used many different sources over the years, including some of the MPs questioning him. He cross checked everything and did not have narrow weak biased source to base his stories on – unlike Bush’s evidence of going to war with Iraq.
If this was a trial then the case would have been thrown out on the first day. It was embarrassing for the MPs and they did not know hope ridiculous they sounded.
This view that the media somehow created a recession is seeking a convenient scape goat.
And as for recklessly putting economic institutions in danger by their reporting, it came out that there is a suspicion the the Government used the media to suppress share prices before buying them by leaking the appropriate stories. I wonder if that will go before a select committee.