BBC Analysis: Mis-Selling of Financial Services

Juxtaposition of the repeated BBC radio 4's Analysis with the second airing of Money Box yesterday evening created an opportunity for some interesting reflection, but before giving this I want to tell a short cautionary tale.

In the early 1990s, I worked for a professional services firm in a tallish office building opposite the Old Bailey. The young star economist of my group, which occupied an upper floor of the building, came in one weekend to dabble with his computer model. Feeling that his brain was in need of increased oxygenation, he endeavoured to open a non-opening window with some force, very nearly defenestrating himself and causing a large pane of glass to crash to the ground in many shards.

This experience, combined with the property bust (which followed a boom) and international recession of the same era, taught me that a crash might accompany anything to do with economists and their supposedly scientific discipline.

Fast forward to yesterday evening, and my second hearing of BBC Radio 4's Analysis - yes, I felt compelled to listen to this programme twice - began to ring internal alarm bells, as Janan Ganesh of The Economist made some rather astounding statements.

First of all, words to the effect of "four years on from the first intimations of the great crash" were used. Excuse me, Mr Ganesh, but many people had "intimations" of a bubble likely to burst well before 2007. Then there was reference to economic recessions arising from problems in financial services being less severe than those linked to manufacturing: this "thesis" being used by Mr Ganesh to caution the present Government against being too zealous in re-balancing the economy away from the banking sector.

In short, my response to this "analysis" was very similar to the BBC's own advisers on hearing the mis-selling of financial products to under-cover customers by the staff of major banks, as reported in the pre-ceding Money Box programme.