08 March 2011
The BBC's Robert Peston on the collapse of the banks
A first job on a specialist magazine covering the minutiae of the banking industry – a task he found incredibly boring at the time – helped the BBC’s Robert Peston crack one of the biggest scoops of the decade.
Peston told students at a special guest lecture organised by the Department of Journalism Studies at the University of Sheffield, that the specialist knowledge he gained as a junior reporter the Investors Chronicle helped him understand the significance of the first signs of the banking collapse.
The BBC’s Business Editor said in 2007 he received a message on his BlackBerry that the BNP Paribas bank had decided to stop investors withdrawing money from two large funds because it could no longer value these “collateralised debt
“This sounds tedious, but I recognised that this was the biggest event in my journalistic career and was the beginning of the worst banking crisis we had ever seen.
“It meant that funds that had attracted trillions of dollars in investments were impossible to value. It was an emperor’s new clothes moment.
He added: “If banks can’t borrow, they can’t lend and the economy begins to shut down – and that’s precisely what happened over the following 18 months.”
A few months later in 2007 Peston broke another huge story when he revealed that the Northern Rock had been forced to approach the Bank of England for emergency support.
Peston said those few months as the banks collapsed were difficult for him as some people blamed him for the crisis, accusing him of “talking the economy down”.
“There was personal invective and some people genuinely believed I was personally to blame.
“But as a journalist you are a messenger, not an actor or protaganist. You should be invisible. What is important is what you say, not who is saying it.
“Suddenly I became a bit of a public figure and it became hard to do the day job. But I believe it is not about you – it is the story that matters.”
Peston said despite starting his career as a traditional print journalist, he had fully embraced new technology.
“The blog is the spine of what I do but there is also TV, radio and I use Twitter.
“I get a huge amount of information from it. Some of the comments I receive are barmy, but many of them are incredibly useful. The multi-platform world is incredibly enriching in the way we do our job.”
He warned that the problems affecting the world finance system had not gone away.
People in producer countries, such as China, were working harder and for less money than people in the West.
They were also saving more and shifting the surplus to the West where it helped fuel a bubble in unsustainable borrowing.
He said we had to consume less, save more and sell more overseas to survive.