Page last updated at 17:48 GMT, Wednesday, 4 February 2009

I did not cause Rock run - Peston

The BBC's Robert Peston faces questions about his access to Treasury sources

BBC Business editor Robert Peston has told MPs he does not believe his reporting led to the collapse of Northern Rock.

Mr Peston broke the story of the bank asking for emergency funding from the government in September 2007.

He has been criticised for causing the run on Northern Rock that followed.

But he told the Treasury select committee he had acted responsibly in reporting the facts, which were from multiple sources and had been checked.

Mr Peston was one of five leading business journalists being quizzed by the committee on the role of the media in the financial crisis.

The British Bankers' Association has singled out Mr Peston and the BBC for acting "injudiciously" in reporting the problems at Northern Rock, the committee heard.

But Mr Peston said he had never held off from reporting a story he knew to be true to serve a wider interest.

'Structural reasons'

In the case of Northern Rock he had monitored the bank for "years" and only when all of the pieces of the story "fitted together" and he was sure of the facts had the decision been taken to run it.

Asked whether he felt he had caused the run on Northern Rock, he said: "I have obviously given a lot of thought to this and the answer is no."

Northern Rock, frankly, would have collapsed, it would be where it is today, irrespective of whether there had been that retail run
Robert Peston, BBC business editor

He said the bank had a flawed business model and there were other "structural reasons" why it was vulnerable, such as its policy of keeping its number of branches to an "absolute minimum" in relation to its number of customers and its lack of computer server capacity, which made its website crash.

"Savers become anxious because they simply could not find out from the institution what was going on," he told the committee.

But Mr Peston said the bank's collapse had not been caused by the queues of customers demanding their money back but a "wholesale run, " with other institutions refusing to fund it.

"Northern Rock, frankly, would have collapsed, it would be where it is today, irrespective of whether there had been that retail run," he said.

Warnings

Mr Peston was also quizzed about his scoop on troubles at Bradford and Bingley and on an entry in his blog in September 2008 which critics say sparked a run on the share price of HBOS, which led to it being forced into a merger with Lloyds TSB.

He said it was a "fact that this bank needed capital" and that HBOS's share price had been "wrong".

He was questioned about his sources and denied he had ever had "special help" from inside the Treasury, insisting he spoke to "lots and lots of people" in government, the banks and Parliament.

"I am simply not going to get into who I talk to about any story," he told the MPs.

But he added: "I have never felt that I was in receipt of preferential access or preferential information from any source at all."

We were asked by people at the highest level if we would restrain ourselves from publication because it was felt that we might cause a second run on the institution
Alex Brummer, Daily Mail

Financial Times editor Lionel Barber congratulated Mr Peston, who used to be the newspaper's political editor, on his Northern Rock scoop.

He said there had been rumours for months about problems at the bank but his newspaper did not report them because it was "not in the business of trying to drive Northern Rock out of business".

Northern Rock was nationalised in February 2008 after the government failed to find a buyer for it.

The five journalists giving evidence to the committee all claimed that the media acted responsibly in their reporting of the financial markets and that their organisations had carried warnings about excessive debt levels and a house price bubble before the markets crashed.

But Daily Mail City editor Alex Brummer said financial journalists might have done more to push the warnings into other parts of their newspapers.

He also revealed his newspaper had held off from publishing a document which could have been "highly damaging" to the planned sale of Northern Rock in late 2007 and early 2008.

"We were asked by people at the highest level if we would restrain ourselves from publication because it was felt that we might cause a second run on the institution," he told MPs.

The newspaper agreed, as it did not want to cause a problem that would prevent the bank from being rescued. This proved the media could act with "self-restraint" and did not just publish things out of "spite", he added.

Former Times and London Evening Standard editor Simon Jenkins, a columnist for The Times and the Guardian, and Mr Peston's predecessor as BBC Business editor Jeff Randall - who now presents Jeff Randall Live on Sky News - also gave evidence to the committee.

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