Where does power end and responsibility start? That’s a timely question for Mr Rupert Murdoch and the editors of his local flagship, The Australian, as they ponder the impact today of their “quality” journalism on the fate of one of the pillars of Australian finance, Macquarie Bank.

Macquarie shares have lost some 25 per cent of their value in two days in the wake of a highly speculative, highly questionable, highly irresponsible and highly damaging story by Adele Ferguson in The Australian yesterday. Ferguson asserted that MacBank must refinance $45 billion in debt by March next year — and that was followed up today with further negative “analysis” by the newspaper’s “expert” commentators. The claims were bluntly denied in a statement by Macquarie, which also pointed out that “the author (Ferguson) did not provide the Group with an opportunity to respond to these claims” before publication.  As Stephen Mayne sums it up succinctly today in Crikey: “In the current environment you just can’t say a bank has $45 billion repayable in 9 months if it is not true.” With markets crashing and investor confidence collapsing, the power of the media — which Rupert Murdoch constantly and disingenuously asserts hardly exists anyway — can be lethal. Words are bullets when it comes to making claims about the stability of a major financial institution like Macquarie, and not even the largest and most robust bank could withstand the impact of false or negative reporting in a toxic, rumour-fuelled environment like the one we find ourselves in today. Through its journalism, The Australian and its owner could be singly responsible for undermining confidence in Australia’s largest investment bank and, as a result, in the Australian financial marketplace.Media power may be exaggerated, according to Mr Murdoch, but when it’s wheeled out like this it is hard to escape the cruel truth of Stanley Baldwin’s famous 1929 jibe at the press: ”Power without responsibility, the prerogative of the harlot throughout the ages”.

Peter Fray

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