The finger of blame for the financial crisis of 2007–2008 has been pointed in several directions—from greedy bankers to incompetent regulators and self-serving governments—but clearly the breakdown in financial news, information and communication also played a key part. All markets need reliable information in order to attract and service buyers and sellers. In theory, this information should be equally distributed to all parties. However, market participants always look for a market edge, which often involves getting inside information early, spreading faulty information to others or obscuring the true financial picture through clever accounting and complex financial instruments. Thus, the scandals, bubbles and crashes that began to multiply after several rounds of financial deregulation in the 1980s and 1990s have continued unabated since 2008, despite various attempts at reform. At the same time, successful public prosecutions of individuals remain extremely rare, and financial sector pay and bonuses continue to rise to extravagant levels.
Chapter 11 focuses on the corruption of information flows in the London Stock Exchange, in which, supposedly, all market participants have been given equal access to the same information. However, as Philip Augar argues, ever since the London stock market was deregulated in the 1980s, this has not been the case. Investment banks have been able to take advantage of their central positions in the trading and information chains to keep making large profits at the expense of all others. Even after the financial crisis and new waves of financial regulation, that crucial problem remains.
In chapter 12, Peter Thompson shows that many years after the financial crisis hit, problems remain as deep-seated as ever. He uncovers the details of how the Libor scandal came about and the failures of financial news reporters and regulators to deal with the problem earlier. Although focusing on Libor, the chapter also sheds light on the reasons why so few failed to spot (or report on) the coming financial crisis of 2007–2008, as well as why future crises are also likely to be missed. The continuing problem is that both journalists and regulators are dependent on self-serving inside sources for key information, as well as for interpretation of that information.
In chapter 13, Henry Silke demonstrates how the mainstream Irish press contributed to the property bubble that helped crash the Irish economy in 2007–2008. The rapid rise of the Irish economy was strongly tied to promoting the real estate boom and encouraging international investors and businesses to come to Ireland. In the process, a property bubble grew, which then made homes unaffordable for most people while also destabilising the economy. The media, with close links to both elite national political and international investment networks, first pumped up the bubble and then kept it inflated. Thus, mainstream media coverage of the housing market, supposedly constructed for the public, was instead produced by and for market-linked interests.