News from Ben Dyson, co-founder of Positive Money
A significant milestone?
The BBC produced a video, with a commentary by Robert Peston entitled “How do Banks Work?” which sought to explain the principles of banking and the role played by banking in relation to the global financial crisis. The video gave a misleading impression of the way banks work by failing to note their role as creators of money, and this role in leading up to the crisis.
One of Positive Money’s supporters, Conrad Jones, decided to take action and complained. The process was tedious (as you can read below) and it took perseverance and a lot of patience…
…but at last it resulted in BBC admitting that the video “left a misleading impression of how banks in fact work, and of the impact of the working of banks on the economy at large.” and the video was removed from the website.
The item was a video extract from a BBC3 programme directed at a young audience. In the video, the BBC’s Business Editor sought to explain, in appropriately simplified terms, the principles of banking and the role played by banking in relation to the global credit crunch. A viewer complained that it gave a misleading impression of the way banks work (by failing to note their role as creators of credit) and of the causes of the global financial crisis.
Though highly simplified, the item did not give a misleading impression of the immediate causes of the global credit crunch (as distinct from the period of extensive lending which preceded it). In relation to the principles of banking, however, it was simplified to the point of suggesting that the amount a bank could lend was limited to the sum of its deposits. This left a misleading impression of how banks in fact work, and of the impact of the working of banks on the economy at large.
The video was removed from the website following the ECU finding.
The process was described as tedious but Conrad’s account is not! We recommend it.
New readers may read more about Ben here.