Subprime – The death of financial reporting or a failure of investigative journalism?

Abstract

The in-depth reporting in the UK of the subprime market began in the UK in earnest after Northern Rock ran into trouble last August and a liquidity crisis developed. It was only then that the media started to report the inherent problems of the subprime market and the role of highly complex financial vehicles, especially Collateralised Debt Obligations. The UK public received very little warning prior to August 2007 in the media that there were potential problems for UK investors, mortgage seekers, saver, borrowers or other interested parties. Nor was it revealed in a timely fashion how many of the UK’s most respectable financial institutions were heavily exposed to derivatives. At this stage two key questions emerge: with the dominance of the current ‘churnalism’ news desk model, did the UK’s major media fail to apply investigative techniques to this important issue? – and are the mechanisms of the globalised financial markets now so complex and secretive that it is impossible for journalists to investigate?