Media Spotlight: The Love Of Money - Back From The Brink
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Back From The Brink, the final installment in BBC2’s The Love Of Money series, focusses on the week in which the British banking system almost collapsed.
The programme offered candid interviews with the men who lived, breathed and almost laid to rest the Royal Bank of Scotland and HBOS in the weeks following the Lehman Brothers collapse.
Viewers were privy to the accounts of Mervyn King, governor of the Bank of England, Prime Minister Gordon Brown and chancellor Alistair Darling, who gave a glimpse behind the scenes.
As the true extent of the financial crisis in the UK started to unfold last September many were unaware that it was “the worst situation we faced in peacetime”, as Darling puts it.
The programme takes us back to the roots of the troubles in the US, as US treasury secretary Henry Paulson struggled to stop millions of US citizens withdrawing their money while also trying to stop the financial resolution talks turning into the next political campaign for President Barack Obama and senator John McCain.
While the US had agreed its package to buy back the toxic debts from flagging banks, the UK was not convinced and instead pushed forward with its plan to part-nationalise our defeated banks.
Unlike other documentaries on the financial crisis, Back From The Brink did not dumb down the reasons for the crisis or overwhelm with technical jargon. Instead it explored the bigger picture and what was actually done to solve the problem and each country’s role.
The high-profile interviews with the likes of Brown and Darling gave the programme credibility in getting its message across.
UK politicians are rarely given credit by the media for their achievements, but BBC2’s balanced account of events showed that when it came to a financial crisis the UK’s head was a bit more screwed on than the Americans’. They rushed through their bill, only to end up following in the UK’s footsteps and buying stakes in their banks.
But the UK had its problems. Darling explained how when the heads of the banks were summoned to a crisis meeting at the Treasury where they were told about plans to part-nationalise them, RBS’ former chief executive Sir Fred Goodwin was still unaware of the problem he was facing.
“RBS’ view was that it didn’t have a capital problem but it most certainly did,” Darling recounted.
Other advisers recalled how Goodwin insisted that RBS’ problem was a lack of liquidity, not capital, until he was put in his place by the head ofanother bank. Unsurprisingly Goodwin turned down the chance to be interviewed for the programme.
And if anyone thought things in the UK and US were bad, Iceland brought home the severity of their situation.
“I don’t think I’d ever left the house with so much money on me because I did not know whether my credit card would work when I checked out of the hotel,” said Arni Mathiesen, former Icelandic finance minister.
The final word went to King, who pointed out that the economic disaster was just the latest in a long line, from the South Sea bubble of the 18th century to the Depression.
The transactions and financial products may have got more complicated, but the pattern of manic speculation leading to financial collapse is the same today as it was 300 years ago.
“People who think the world has changed have not read history,” King added.
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