Business must stop being a 'ghetto subject'
Robert Peston, the BBC's business editor, has been thinking, writing and, more recently, broadcasting about business for 25 years. He has interviewed the people that matter – retail magnate Phillip Green, private equity chief Damon Buffini – and written a book, Who Runs Britain?, which came out last month, on how their actions are changing people's lives.
And on 13 September last year, he broke the business story of the year – if not the decade – that British bank Northern Rock was about to ask the Bank of England to bail it out with a multibillion-pound loan.
He believes that during this period of turmoil in global business, there is more financial journalism in the mainstream press than ever. But he says there is a generation of financial journalists who started their careers in the economically buoyant Nineties and early-2000s and have not yet reported on a slump.
'I think that if you look across the news, there is a lot of coverage of business and economics at the moment,"â€ˆPeston says. 'We're going into a period where there is probably more of it than there has been for some time. Certainly I don't think there's any shortage.
'We've been lucky enough in this country since the early Nineties during a period of pretty steady economic growth and low inflation. It's been a hell of a long time since we've had to confront the possibility of a serious downturn.
'Plainly the economy is on the turn. Almost the most dominant characteristic of where we are now in the economic cycle is that the outlook is pretty uncertain. I can barely remember a time when there has been less clarity about how bad it might get."
Peston says that American financiers are already talking openly of a recession and he reckons Britain 'is not insulated from that". But given the grave and very real threat to our jobs, savings and pensions, is there a danger of worrying people unnecessarily, or even not enough?
'I hope that the balance is right. We have got to present an accurate picture. We shouldn't be too optimistic in the upturn or pessimistic in the downturn. The crisis in money markets is as bad as it's been, but the economy is still growing at two per cent – slower than last year, but still some way from a recession.
'However, if you talk to business people, there is a lot of uncertainty, a lot of nervousness and pessimism around the place."
The former Financial Times and Sunday Telegraph man is passionate about explaining very complicated matters to millions of people. 'I think about whether my gran would get it,'he says, adding that he feels it is about time business stopped being a 'ghetto subject".
'It's not about the funny behaviour of a funny bunch of people in the City – if share prices are moving and you are saving for a pension, that directly affects you."
Peston is often gloomy in his assessments on TV, radio and on his BBC blog, which started as an internal BBC newsletter on financial issues and now claims up to a million. But panic is not the order of the day.
'It would be wrong to talk ourselves into a great depression over it. But the problems in the financial markets are serious. I think conditions in the global financial market remain very bad – there's no sign of them improving in any significant way."
Translating City stories into everyday top-of-the-bulletin items is a problem, says Peston, especially for journalists who feel unfamiliar with collateralised debt obligations and the like.
'All of us feel much more comfortable with stories that we are familiar with. I was lucky enough to break the Northern Rock story, and that's become a huge talking point everywhere, so Northern Rock is on everyone's front pages because everyone's familiar with it.
'There's no point whingeing about not getting your story on air if you yourself can't explain why it matters in language that everyone understands."
But there's no doubting Peston's excitement. 'The world for me is an incredibly interesting place at the moment. What's going on is complicated and making sense of it is incredibly gripping. Having one of the most interesting stories that I can ever remember being on my territory, it's incredibly exciting."
'It's hard to put Citibank or UBS on the front page'
Alex Brummer, City editor of the Daily Mail, has seen a fair few banking crises in his time and isn't too shocked to be reporting on another.
He spent more than 25 years as an economics journalist and business editor at The Guardian and has spent eight years so far at the Daily Mail. But he admits that this current downturn poses different sorts of challenges for politicians, investors and journalists.
'People forget that banking crises are nothing new, we've had one almost every decade. What's interested me about this crisis is its global nature – it's much more global. This is the first real global crisis.
'People think of it as a UK thing, but on 9 August, which was when the whole thing broke, it was a French bank that was in trouble, BNP Paribas, and there were three German banks in trouble too."
Given the weight of the problems facing businesses, lenders and ultimately consumers, does he think journalists have got a grip on this story?
'I think we've lurched through this quite interestingly. There have been periods of huge and dynamic activity [in financial journalism].
'Last August, when most people weren't reading papers at all but lying on beaches, we did a huge amount and it went all over the paper.
'There was a huge amount of blanket coverage and then it went off the radar. In the past couple of months, there have been a few economic issues to take its place and Northern Rock has kind of faded. People do get bored."
In October, Brummer wrote an op-ed piece for the Mail which said that the final bill for 'Northern Wreck'would be at least £50bn, and he says he was the first person to use the figure in print, with help from a well-placed contact. But he regrets not taking that story further.
'We didn't do it as a news story – we probably should have. That was probably me not reacting in the way we should have done. Because it was on the op-ed page of the Mail and we can be agenda-setting, it was picked up quickly by the BBC and the following day all the national newspapers were writing about it."
It is hard for a Middle England-favouring paper such as the Mail, he says, with its traditionally female audience, to get business on the front page.
'For UK papers generally, apart from the FT, it's hard to put Citibank, UBS or the Bank of America on the front page. They can be big City stories – but the only way you can do it is to produce a larger theory about what's going on. Why has this happened? Who are the greedy bankers? Who has profited? Should the whole banking system be changed?"
'It's a lot easier for the FT than other news providers'
But what of the Financial Times, the old pink lady of the City? The FT is enjoying a period of success rare among national newspapers. It has been a singular circulation success story in recent months and, recession or not, just posted profits for 2007 of £56m.
But how do its journalists, who chronicle the goings-on of private equity houses and the excesses of investment banks, approach a global slowdown?
Chris Giles is the paper's economics editor. In an office overlooking the River Thames in the paper's London headquarters, he says the most important task for the FT is to simply tell readers the truth without speculating too much. And he admits that even the FT's experts don't know what will happen. The key for Giles in financial journalism is, to paraphrase Socrates,know what you don't know.
'The important thing is to tell readers as far and as best you can what really is going on. You have to make a very, very clear distinction between things you know, like banks are in trouble, and conjecture.
'You have to be very careful in making that distinction very clear. It's a lot easier for the FT than it is for many other news organisations because we have far more people with far more experience in the various sectors, particularly the deep bits of the financial system, which frankly people just don't look at very often."
Giles admits the FT was not 'particularly up on the exact causes'of the credit crunch, after it emerged that the collapse in the US housing market was affecting big European banks in August last year.
'But we all made a point of finding out what the problems were,'he says. 'When it comes to conjecture, about what will happen, clearly we have to be more careful, because we don't know. Anyone who pretends they know what will happen is lying.
'We can tell them what might happen and we can tell them what other people are saying, but we should never – and I didn't think we ever have – give the impression that we know what will happen.
It doesn't mean the FT doesn't write about the future, but Giles won't allow his reporters to 'pretend you know things you don't know". That is, he says, when 'reporting turns into fiction".
FT readers expect to be told just how bad the situation is, however, and Giles agrees that 'to tell readers that it will all be over soon wouldn't be giving them a good service at all". What you need to do is 'point out that these things are new and are serious'and whenever possible speak to the financial institutions themselves to gauge what is going on.
Like Peston, Giles cannot hide his excitement over the events being played out in his paper.
'It's a great story. And you can't deny the fact that as a journalist you want to cover big stories and this has developed into certainly the biggest story in the financial world since the dotcom crash."