Media Spotlight: Dispatches, Channel 4
Share
These days, art forms from TV dramas to comics are getting to grips with the credit crunch. Barely a day goes by without a sound bite comparing this crisis with the Great Depression of the 1930s or illustrating the West’s love of mammon.
As a result it’s easy to become blas窠especially when you work in the mortgage industry. So you could hardly have been blamed for choosing to flick to EastEnders instead of watching the second part of Dispatches’ Crash - How The Banks Went Bust on Channel 4 last Monday.
But if you did you would have missed out. The first instalment focussed on the US but the second looked at the downturn in the UK, including how HBOS and the Royal Bank of Scotland’s fortunes took a turn for the worse.
Alas, there was no interview with Sir Fred Goodwin or even Sir James Crosby but Dispatches’ principal reporter, well-known economist Will Hutton, did manage to secure interviews with chancellor Alistair Darling, deputy governor of the Bank of England Sir John Gieve and former Monetary Policy Committee member David Blanchflower.
The show also featured sound bites from Paul Moore, HBOS’ head of regulatory risk between 2002 and 2005. He was the man who caused the media storm over HBOS’ lack of risk controls that led his former boss Sir James to quit his role as deputy chairman at the Financial Services Authority.
Shouting at the camera in a similar style to the hosts of MasterChef, Moore boomed that HBOS had borrowed more money in one year “THAN THE ITALIAN GOVERNMENT”.
And judging by his description of working at HBOS, it was like being employed by the Mafia. He claimed one of his superiors had threatened him over his warnings that HBOS was lending money to the wrong individuals.
“She leant across the table and said, ‘I’m warning you, don’t you make an effin’ enemy of me’,” he confided.
With Sir John quoting Fred the Shred as describing the RBS bailout talks as “like a drive-by shooting”, it all started to make the banking industry sound like The Sopranos.
Some of the most entertaining quotes came from Professor Willem Buiter of the London School of Economics.
Asked whether the government knew that once the wholesale funding market stalled many banks would fail he bluntly replied that it “didn’t have a clue”.
And he also gave short shrift to the notion that the government was right to recapitalise HBOS.
“It should have been liquidated,” he said. “There’s no reason for the continued existence of a bank that failed so heroically.”
Well, apart from the thousands of staff employed at the bank.
But getting back to the programme’s central question of how long the freefall will last, Blanchflower made it clear that despite the Bank cutting interest rates to 0.5% it may not be enough.
Blanchflower has a heavy axe to grind with Bank governor Mervyn King.
During a Treasury Select Committee meeting with members of the MPC the camera zoomed in on Blanchflower as King basically said he was talking rubbish about how unemployment would rise if the base rate was not cut.
At the time, King was more worried about inflation. Sadly, Blanchflower was proved right.
And asked whether the Bank cutting the base rate sooner might have made a difference Blanchflower’s response was a simple “yes”.
If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat
