He's the voice of the crash, but the words are all his own

Spectator, The, Nov 8, 2008 by Midgley, Dominic

The cover of the hardback version of Who Runs Britain? , Robert Peston's masterly dissection of how the global economy got into the mess it's in today, features an abstract version of the Union Jack. On the front of the paperback version published last week, however, we are treated to a portrait of the man himself. And we all know why the publishers made that change. In the past six months or so Robert Peston has gone from being the highly respected but faintly obscure business editor of the BBC to something of a celebrity.

He laid the foundations for his rise to fame as long ago as September 2007 when he broke the news that Northern Rock was seeking emergency financial help from the Bank of England. But it is in the last month or two that he has come into his own. For if anyone can be described as the man who did well out of the crash, it is Peston.

On 17 September he exclusively revealed that HBOS was to be taken over by Lloyds TSB in a move that was more emergency rescue than orderly merger. He followed this up a month later with another fantastic scoop, the news that all the big high-street banks -- apart from Barclays -- had gone cap in hand to the government to ask for an injection of capital.

This latter story had a particularly cataclysmic effect on share prices, with the Royal Bank of Scotland seeing its shares fall by 39 per cent, wiping £10 billion off its value.

The story also led to a bitter row between the City and the Treasury, with each blaming the other for the leak; and a number of MPs even demanded an official investigation into where Peston got his information. To which the appropriate journalistic reaction is: teehee.

But with papers such as the Daily Mail describing him as 'The Man Who Moves Markets', there is a legitimate question to be asked. Has Peston become, as The Spectator suggested recently, a 'town crier' for the government? And who better to ask than Peston himself?

When I put the key phrase to him in the compact glass cubicle in a corner of the editorial floor at Television Centre that serves as his office, he is mildly indignant. 'I don't agree with that at all, Dominic, ' he splutters.

'It hasn't really worked like that.' He points out that he has been a journalist for 25 years and in that time he has held very senior positions covering politics and business, including being both political editor and banking editor of the FT at different times -- a level of experience that probably makes him uniquely qualified to cover the current financial crisis.

He goes on: 'I don't want to sound pompous and self-satisfied but literally every story I've got has been because I did it in a traditional journalistic way -- by saying this is where I think the story is going, and then making telephone calls and putting together essentially a jigsaw from talking to lots of different people and working out what the story is, as it were.

'Nobody from any of these authorities or banks has ever rung me up and said, "By the way, I thought you'd be interested in knowing x or y, " in some conspiratorial way. So, seriously, I think your town-crier analogy is just wrong.' But if there's ever been a time to take on board the advice of 'Deep Throat' to Woodward and Bernstein during their Watergate investigations -- 'Follow the money' -- this is it. Who benefits from putting in the public domain, for example, the news that the banks are asking the Treasury to bail them out?

Before I went to interview Peston, I called an investor who had invested in RBS some months earlier. He observed that the effect of the story had been to make the government's plan to take highly dilutive equity stakes in the banks significantly cheaper for the Treasury. The previous plan had been to inject less dilutive preference capital.

Given that nobody apart from the government could have had any interest in depressing the banks' share prices at such a sensitive time, he advised me to ask Peston how he felt about that.

'Again, I think there's been far too much of a search for a conspiracy in that particular case, ' he says. 'I'm obviously not going to tell you who I talked to, though I have to say there are multiple sources for all stories that I do, and there were multiple sources as usual on that one, so to look for a single source certainly would be wrong.' He says he's loath to run stories which might cause outcomes that would not occur if he had not run them. 'I have steadfastly avoided doing any broadcast about a bank where I feared that in some shape or form I'd be precipitating a run on that bank, which would undermine the bank in a really fundamental way. I've been very, very, very careful to make sure that everything I said at various times was pitched in a way and at a time when I didn't feel that I would be damaging the bank in a really fundamental way.

'When I did the stuff about the banks talking to the government about their need for capital, I didn't have the faintest idea what effect that would have on their share prices.

It was palpably obviously the case that they needed capital. I wasn't the only person in the City to say that. Every analyst in town who was any good was aware that they needed capital.