Business Irish

Friday 20 September 2019

Lenihan lash at Joe Duffy banks panic

Finance Minister rang RTE's Director General over 'run on banks' fear after Liveline broadcast


Finance Minister Brian Lenihan personally rang the director general of RTE on Thursday to express his outrage at a Liveline radio programme, presented by Joe Duffy, which purported to elicit public opinion on the financial turmoil of last week but ended up provoking unprecedented panic and causing genuine fears that it might lead to a run on the banks.

Mr Lenihan took the initiative when alerted by officials in his department that the Financial Regulator and banks across the country were being "inundated" with telephone calls after the programme from customers alarmed that they were about to lose their savings.

Significant sums are believed to have been removed from Irish banks last week following the Liveline programme. An estimated €50m was lodged to An Post's state-guaranteed savings scheme in just one 24-hour period.

Liveline began its programme on Thursday with an An Post employee extolling its security. A spokesman told the Sunday Independent: "The Joe Duffy show did prompt a huge level of interest in terms of inquiries across the board."

The Finance Minister's intervention forced RTE, as it admitted yesterday, to "scramble" to rectify the potential damage to Ireland's banking system on its subsequent radio

Week of shock and panic How corporatism failed capitalism, Pages 27,28,29,30,31,38

and television news programmes on Thursday and Friday. It also led to the Liveline team, including Mr Duffy, being rebuked by figures in RTE management.

A senior figure in Irish banking told the Sunday Independent on Friday: "That Liveline programme on Thursday was absolutely its single most destructive broadcast ever."

Yesterday, RTE publicly sought to defend Mr Duffy and the Liveline team in general, stating that the programme "fulfils a legitimate function" in allowing "ordinary people" to express their views.

But behind the scenes, the State broadcaster is known to be deeply embarrassed by the fallout from Mr Duffy's programme, which, sources at the station admit, virtually gave panicked callers free rein to express their lack of confidence in the banking system based on little other than their own feelings.

Several callers to Liveline on Thursday told of how they had withdrawn their money from banks, some of which were identified, and were either carrying it around on their person, or considering keeping it "under the mattress", or even burying it in their garden.

Seemingly oblivious to issues of personal security, Mr Duffy asked one woman what it felt like carrying over €70,000 "down the street", and another man how he would feel carrying his savings with him "on the bus".

At one stage, Mr Duffy sought to editorialise, offering his opinion on the stability of the banking system.

He said: "I think people will not believe them", when the issue of the banks' stability was raised.

Mr Duffy also suggested that were the Government to raise the deposit guarantee limit, which it did yesterday, it would be "seen as a panic" measure.

A senior source at RTE yesterday told the Sunday Independent: "If your article castigates Liveline, I would have no problem with that."

Following Mr Lenihan's telephone call to RTE's director general Cathal Goan, concern began to sweep through RTE.

Management took a decision to immediately seek to counteract the impact of the programme, primarily through RTE's business editor David Murphy and economics editor George Lee on the Six-One news and its 9pm bulletin on Thursday and on Morning Ireland on Friday.

"We had to scramble to get it right, to offer some balance, during the rest of the day," a senior RTE source said yesterday. He admitted: "Liveline ran the risk of creating a run on the banks. There is no doubt about that. We became concerned about that after the programme."

He confirmed that subsequent meetings between the Liveline team and senior editorial management had taken place.

"The production team was spoken to at length on Thursday and Friday," he said.

"You could say the issue of the maturity of the editorial judgement of that programme was discussed."

He was unable to say whether Mr Duffy attended the meetings, but added: "If criticism is to be passed on to a presenter, it is usually done through the producer."

It is understood Liveline wanted to return to the issue on Friday. Mr Duffy had even prepared and broadcast a promo indicating that he intended to do so.

But RTE management decided otherwise, "the damage having already been done", according to a source.

The Sunday Independent understands that while the Department of Finance was alarmed by the Liveline programme on Thursday, it had similar concerns in recent weeks in relation to the programme. A Government source said: "Liveline had a guy on a couple of weeks ago whose only expertise in this area was that his grandfather was a bank manager in 1911 or something.

"Have they no idea of the sensitivities associated with this?" he asked.

An Irish banking source said: "If you look across all the commentary in all the media, it is fairly balanced and responsible. But this programme drove it into a different place altogether. It raised the temperature, and caused a lot of worry and stress. I know the regulator's phone was hopping, and banks around the country were inundated with calls after the programme."

A spokeswoman for the Financial Regulator's office declined to comment.

However, a source at the office said: "Programmes like this didn't help the situation."

The source confirmed that Liveline did not invite on air the Financial Regulator to offer a balanced view.

Sources in RTE, however, said that only in "exceptional" circumstances would a counter opinion be specifically invited to participate in a programme such as Liveline.

The source said Liveline seeks to obtain balanced contributions from members of the public who telephone the programme, rather than canvass such opinion in the interests of balance.

"That's the nature of the programme. It's inherently risky, and difficult, particularly on a sensitive programme such as this," he said.

The extent of the Finance Minister's concern first publicly emerged on Friday morning when he was interviewed by RTE's economics editor George Lee.

In that interview, Mr Lenihan insisted that deposits were not in any danger and said that people should not be going to banks to shift their deposit accounts "on the basis of unfounded allegations made on radio programmes".

Yesterday, Peter Feeney, the Head of Public Affairs at RTE, was reluctant to acknowledge that there had been criticism of Liveline within RTE.

He said: "Liveline fulfils a legitimate function in allowing ordinary people express their views. On Thursday last, ordinary people were able to express their concerns about the reliability of the banking system.

"Over the course of the day, and the following day, the banks and the regulatory authorities were given every opportunity to respond to reassure customers."

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