Professional Secret keeping

Today the Bank of England disclosed that it provided more than 60 billion pounds only in emergency loans to RBS and HBOS at the height of the credit crisis last year. The reason why this figure has not been published in the annual report already back in May but just now is because of the Bank of England's fears of its impact on the banking system. Now, with the two banks on a sounder financial footing, there is believed to be no more reason for secrecy. To me this action behind the back of a population that buys newspapers in order know what is going on, is just not fair. This is why I am curious about discovering how different newspapers are approaching this topic today.

Reuters described this situation objectively, however, not clearly. From the language used in this article, the reader cannot draw conclusion on what the author's position this is. The Bank of England deputy governor states in this article that it 'was a dire emergency'. In my opinion this is a weak excuse that does not give me a satisfactory explanation to the large secret they kept. The statement continues with the words that it was a decision made in order to 'prevent a loss of confidence in (...) the financial system as a whole'. At this point I wonder what financial institutions expected the confidence to be after these shocking numbers get confirmed!? Now, when the banks successfully repaid the borrowed amount and the collateral hasn't got touched, Gordon Brown's spokesman proudly says that 'it was a powerful reminder of how close the banking system came to near collapse'.

The article in the Financial Times, which was published 4 hours later, added some more information: both banks were already eligible for a variety of liquidity providing actions when the Bank of England gave financial aid. The extraordinary measures were not enough to sustain the other lenders. This information worries me even more since it means that actions have been undertaking for much more time than so far expected; everything secretly. Even the Northern Rock bailout was kept secret the year before. The bank added that since RBS now signed up for the famous government-run asset protection scheme and Lloyds took over HBOS in highly controversial government-backed rescue merger, there was no longer a need to keep this information from public. I do very much believe that it was not possible anymore to keep it secret, since too many things were involved. It would have been especially interesting to keep it from public now, considering that investors just started to gain confidence in the market after a long time. To discover the exact, horrible numbers of the crisis, which is not really over yet, certainly make me less risk-loving.

The Guardian was as expected not able to hide its centre-left political orientation: already in the title a sarcastic language is used ('billions spent 'propping up' RBS and HBOS). Under a large picture of Mervyn King the biting language continues with statements such as 'figure had been known to only a handful of people until today' or 'how many universities, colleges and jobs you could support with this'. Hyperlinked in the article is also the letter Mervyn King wrote to the Treasury select committee. This article was the longest, with the most information, the most links and the most interviews from all the article read in the Internet today.

However, the differences on the language used in the different articles is impressive. Whilst on Reuters and in the Financial times very objective language allowed the reader to make his own opinion, the Guardian is really pushy and seems to be willing to incite the reader to hate the whole financial system. This is not particularly useful since in my opinion it takes away the thinking, which should always be encouraged among readers. No source of financial media should sound convincing; they all should be as objective as possible. Since in general newspapers with a left political orientation are not very good at being objective, they are only useful to provide the reader with a critical point of view on information gathered from other financial media. I personally believe that an over reliance on left newspapers is manipulating, which in the current environment is fatal. As you will have understood already, the secret keeping was not a good move at all in my opinion. It is a very controversial action that now newspapers have to explain to the public. This is not easy in a period in which the market is in need of calmness and tranquillization in order to see rising confidence among investors. Only this confidence can then potentially lead to a steady growth of global economy. As a reader I am thus now asking for at least some objective information on this matter. Not for a game of hide and seek.

Sources:
http://www.reuters.com/article/companyNews/idUKGEE5AN16S20091124
http://www.ft.com/cms/s/0/b657a26c-d8e8-11de-99ce-00144feabdc0.html
http://www.guardian.co.uk/business/2009/nov/24/bank-england-rbs-hbos-loans
http://img.dailymail.co.uk/i/pix/2007/09_03/009mervynking_468x325.jpg