Friday, 13 February 2009

Together in electric dreams

Interesting to see the blogosphere and mainstream media tag-team Stanford International Bank.

Primed by the Bernie Madoff scandal, mainstream financial media are now on the look-out for any similar scams.

So when Alex Dalmady, a banking analyst and - now - occasional journalist, wrote that all was not what it seemed at Stanford International Bank, he had a receptive audience.

The financial press are now cranking up the stories. None have said anything quite so contentious as Dalmady. They say 'questions being asked' or some similar conservative formulation.

This should be enough - the financial authorities should now be finding the truth, whether it be benign or not. And investors also know they should do some checking before putting their money with SIB.

That's as it should be. But sometimes the appeal of the story lets a journalist run too far. Last night the BBC ran an awful story of a suicide linked to the Madoff scandal. A man had lost his money and then shot himself. Terrible.

But it didn't end there. The BBC journalist let the man's son rant about how his father was killed by the banking crisis, and that it was terrible that the banks were being bailed out while the victims of Madoff had not.

There are times when a journalist should not quote people however interesting the things they say. This was one of those moments. The banks have been bailed out and nationalised because it is in society's interest to keep the country's economy afloat. The same can not be said for Madoff's victims. And fraud is fraud, it has nothing to do with the banking crisis.

1 comment:

JJ Hornblass said...

I agree. This kind of reporting breeds a certain hysteria that's counterproductive. I was conversing with someone yesterday who is not involved in the banking industry. It was surprising to me how warped were her perceptions of banks and the banking crisis. I am not sure how to resolve this other than persistent education of the public -- something the banking community has completely avoided since the crisis began. The ramifications of this inaction are profound.