Is it fit to print?
The past year has been a lively one for the financial press. Hardly a day went by that they had nothing dramatic to report. Many economic analysts have asked whether the quality of reporting of the financial and economic crisis has in fact made the...
The past year has been a lively one for the financial press. Hardly a day went by that they had nothing dramatic to report. Many economic analysts have asked whether the quality of reporting of the financial and economic crisis has in fact made the situation even worse.
Richard Lambert, director general of the Confederation of British Industry and a former editor of the Financial Times, recently delivered a speech in which he questioned the way some journalists reported the events that were an integral part of this crisis. He rightly commented that "careless headlines and injudicious reporting risk becoming self-fulfilling prophesies of a very serious nature".
But reporting facts hardly falls under such a description of irresponsible journalism. When international companies resort to mass redundancies to remain in business the financial press can hardly be expected to hide this from its readers. These last few weeks Bank of America announced plans for laying off 35,000 of its workforce. Sony announced that it would shed 8,000 of its workforce because of falling sales. Marks and Spencer is shedding 1,200 of its workforce and closing down a number of stores.
More scary events had to be reported last year. Quite apart from the collapse of some much respected institutions like AIG, Lehman Brothers and Woolworths, we had our fair share of scandals.
The Bernard Madoff $50 billion fraud was the last thing that the markets needed to boost their battered morale. Mr Madoff, a former chairman of the Nasdaq stock exchange, devised a Ponzi scheme in which investors payouts are funded not by real returns but with cash flow from new investors. He even managed to fool some very respectable banks like BNP and HSBC.
Many followers of the financial press, who are not necessarily knowledgable on how these schemes work, are asking how such fraudulent schemes could be kept alive for so long. The financial press has a right and duty to report these facts and comment on them, and express opinions on who should be held responsible when things go so terribly wrong.
The financial press is not there to report the waffle and dribble of politicians whose main interest is to promote their PR spin to create a feel-good factor. In the last few years modern communication has revolutionised the way people inform themselves on what is happening around the world, including the international financial markets.
We have of course seen various examples of melodrama in reporting events surrounding the most recent financial and economic crisis. This could undoubtedly have an effect on the morale of investors and ordinary people who are as consumers are an important part of any economy. But one can hardly blame the financial press for aggravating the economic situation in most countries that are feeling the pinch of the economic downturn.
The financial press like any other sector of the media had a duty to investigate and report all events that occur in the local and international markets. They must of course keep asking themselves whether any particular piece of news is fit to print. They must not ignore any rumours, because often these give a clue of what could eventually become a serious event.
Separating truth from untruth may not always be easy and in the world of finance and economics this is even more difficult. Financial journalists have to be careful not to be manipulated by operators in the market who may have an agenda of their own. Last year we saw how the respected British bank HBOS was brought to its knees by malicious rumours by short sellers who had an interest to drive the price of the shares of this bank down.
I still believe that in the current situation journalists should avoid the use of news-speak which the New York Post recently defined as "the antithesis of plain English". Many will, no doubt, remember recent examples of senior executives of businesses rejoicing at the "respectable" results achieved by their companies last year when in fact their profits plummeted dramatically. To dodge and confuse hard truths about the current crisis by reporting sad economic events in euphemistic descriptive terms amounts to doing a disservice to the public.
Financial journalists must not shy away from keeping their readers informed by factual reporting of events and also by their investigation of what would have led to such events occurring. It is also important that they promote a critical analysis of policies that can affect economic performance. This is why we need free spirits in the financial press who are not inhibited by the towering personalities of political and business leaders.
Richard Lambert, director general of the Confederation of British Industry and a former editor of the Financial Times, recently delivered a speech in which he questioned the way some journalists reported the events that were an integral part of this crisis. He rightly commented that "careless headlines and injudicious reporting risk becoming self-fulfilling prophesies of a very serious nature".
But reporting facts hardly falls under such a description of irresponsible journalism. When international companies resort to mass redundancies to remain in business the financial press can hardly be expected to hide this from its readers. These last few weeks Bank of America announced plans for laying off 35,000 of its workforce. Sony announced that it would shed 8,000 of its workforce because of falling sales. Marks and Spencer is shedding 1,200 of its workforce and closing down a number of stores.
More scary events had to be reported last year. Quite apart from the collapse of some much respected institutions like AIG, Lehman Brothers and Woolworths, we had our fair share of scandals.
The Bernard Madoff $50 billion fraud was the last thing that the markets needed to boost their battered morale. Mr Madoff, a former chairman of the Nasdaq stock exchange, devised a Ponzi scheme in which investors payouts are funded not by real returns but with cash flow from new investors. He even managed to fool some very respectable banks like BNP and HSBC.
Many followers of the financial press, who are not necessarily knowledgable on how these schemes work, are asking how such fraudulent schemes could be kept alive for so long. The financial press has a right and duty to report these facts and comment on them, and express opinions on who should be held responsible when things go so terribly wrong.
The financial press is not there to report the waffle and dribble of politicians whose main interest is to promote their PR spin to create a feel-good factor. In the last few years modern communication has revolutionised the way people inform themselves on what is happening around the world, including the international financial markets.
We have of course seen various examples of melodrama in reporting events surrounding the most recent financial and economic crisis. This could undoubtedly have an effect on the morale of investors and ordinary people who are as consumers are an important part of any economy. But one can hardly blame the financial press for aggravating the economic situation in most countries that are feeling the pinch of the economic downturn.
The financial press like any other sector of the media had a duty to investigate and report all events that occur in the local and international markets. They must of course keep asking themselves whether any particular piece of news is fit to print. They must not ignore any rumours, because often these give a clue of what could eventually become a serious event.
Separating truth from untruth may not always be easy and in the world of finance and economics this is even more difficult. Financial journalists have to be careful not to be manipulated by operators in the market who may have an agenda of their own. Last year we saw how the respected British bank HBOS was brought to its knees by malicious rumours by short sellers who had an interest to drive the price of the shares of this bank down.
I still believe that in the current situation journalists should avoid the use of news-speak which the New York Post recently defined as "the antithesis of plain English". Many will, no doubt, remember recent examples of senior executives of businesses rejoicing at the "respectable" results achieved by their companies last year when in fact their profits plummeted dramatically. To dodge and confuse hard truths about the current crisis by reporting sad economic events in euphemistic descriptive terms amounts to doing a disservice to the public.
Financial journalists must not shy away from keeping their readers informed by factual reporting of events and also by their investigation of what would have led to such events occurring. It is also important that they promote a critical analysis of policies that can affect economic performance. This is why we need free spirits in the financial press who are not inhibited by the towering personalities of political and business leaders.