Negative press coverage is not to blame for the global financial crisis, according to the deputy editor of the Financial Times.
Speaking on the first anniversary of the credit crunch, Martin Dickson told Press Gazette that journalists had an important job in following the crisis and could not be held responsible for the City’s own failures.
‘Usually those criticisms are not justified because the press or the media generally are just one voice,’he said. ‘There are a lot of other people out there who make a lot of money by going against the prevailing mood in the markets in a very contrarian fashion and all these different voices make up the way the market is defined.”
The start of the credit crunch is commonly accepted as 9 August last year when French bank BNP Paribas admitted it could not calculate the amount of debt it owed. The same day the US Federal Reserve bank pumped some £45bn into the US banking system and within a month thousands of savers were queuing on British high streets to withdraw their cash from the stricken Northern Rock, which was soon to be nationalised.
Describing the challenge of covering the story Dickson said: ‘The key thing has been explaining what is an extremely complex and to some extent a hidden story. What exactly is on banks’ balance sheets hasn’t been at all clear.”
The Northern Rock story and the ensuing drying up of international credit thanks to the collapse of the ‘sub-prime’US housing market made front-page news in several papers in the early Autumn.
But Dickson admits that even the FT, with its roster of economic experts, did not appreciate the scale of the problem immediately.
He said: ‘We certainly knew it was a very, very big story, but quite how big I don’t think emerged for quite some time. No one appreciated at the time quite how much the capital markets would freeze up and for how long.”
For a pro-market, pro-capitalist paper, the crunch poses some difficult questions about the financial world, but Dickson said the experience has still been good.
‘It’s been a very exciting time, the events have been remarkable. News like this sells newspapers. Yes, we’re in favour of markets but we want markets working efficiently and in the run-up to this crisis they weren’t.”