The Media: Reporting the crisis or creating it?

The Media: Reporting the crisis or creating it?



798_2022-05-03-11-01-31am.gif
.

Since the onset of the ubiquitous credit crisis there has been much speculation over the influence of the media. Many people believe that if it weren’t for media scaremongering, consumer confidence would not have declined so rapidly. Deposits would have stayed safely in banks and the mounting panic amongst savers would have remained under wraps. 

BBC business editor, Robert Peston, has come up against criticism for his involvement in releasing a variety of disturbing financial revelations into the public domain.

 

He was responsible for informing the world when Northern Rock had requested assistance from the Bank of England, which was arguably what began the whole crisis of confidence in the UK banking sector. He was also allocated the job of breaking the news about the Lloyds TSB/HBOS merger. Now he has sent shares spiralling by releasing information on his blog an hour before markets opened for business yesterday.

 

His suggestion that RBS, Barclays and Lloyds TSB all needed a £15 billion bailout from Alistair Darling ‘rather quicker than he might have expected’, resulted in a dramatic loss of more than £17 billion in the banking giant’s share values.

 

RBS lost £10 billion after share values dropped 39%, HBOS values sank 41%. Barclays shares dipped by 29p to 285p, whilst Lloyds TSB suffered a decline of 33.5p to 225.5p.

 

The role of the media throughout the onset of the credit crunch has been important, perhaps influential. The question is: are the media merely reporting reality, or are they creating it?

 

Leave a comment