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British media to face banking crisis inquiry

world Updated: Jan 22, 2009 01:16 IST

An influential group of British lawmakers said on Wednesday that they would hold an inquiry into the role of the media in the banking crisis and whether journalists should be partly gagged in periods of market volatility.

The Treasury Select Committee said it would take evidence Feb. 4 from key figures in the news media, including Robert Peston, the British Broadcasting Corp.'s business editor, who broke several stories in the autumn when the financial crisis was most acute--including the news that Lloyds TSB was to take over troubled HBOS, which caused a sharp rise in the latter's share price.

The year before, Peston broke the news that Northern Rock had agreed an emergency loan from the Bank of England to keep it afloat as the money markets dried up.

The following morning, customers lined up outside Northern Rock ranches around Britain, prompting suggestions by a few fellow journalists and some Rock shareholders that he was partly responsible for the first run on a British bank for around 150 years.

In a recent edition of the BBC's flagship current affairs programme Panorama, Peston said he was shocked by the run on the Rock, which eventually led to its full-scale nationalization.

On the same program, Simon Jenkins, a columnist at The Guardian newspaper, said financial journalists should be more aware of how their coverage can affect sentiment.