Media was complacent over borrowing, forum told

THE MEDIA failed to alert the public to the dangers posed by excessive borrowing by western economies during the boom years, RTÉ economics correspondent Seán Whelan said yesterday.

Addressing students at the University of Limerick, he said the Irish and international media had missed “the spectacular growth” of borrowing for investment and the risks this posed to economic and financial stability.

“Put simply, the question ‘where is all this money coming from?’ was not put with sufficient consistency, nor was there sufficient tenacity in seeking an answer to this question,” Whelan said.

“Exploring the leverage question would have entailed hard work and a hard sell from journalists to editors. Documenting the spending of all that money was easier and more fun.”

The journalist was speaking at the conference Catastrophe: the Irish Media and the Economic Crisis jointly hosted by the Kemmy Business School and the journalism department at UL.

He said the media was not the key institution that failed. The key failure was that of the banks, followed by regulatory organisations and governments.

“But the media – domestic and international – has a small part to play and failed, in my view to play it as well as it could have,” he said.

Whelan also said the media failed to fully appreciate the consequences of European Monetary Union and its impact on European politics. “The game-changing nature of EMU was not, I believe, fully understood by most media and, as a result, they failed to adapt their coverage of European political and economic developments in line with the new realities.” This contributed to the economic crisis, he said.

“This was nowhere near as serious as the failure of the bond markets to understand the nature of sovereign risk under the rules of EMU.”