Economic information, the market and business in Italy

Debate at this roundtable touched on the complex relationship that persists between the media and the business community. Participants noted that information should not be considered a necessary evil, but rather a meter by which to judge a democracy – a country’s freedom is evident in its journalism. A lack of information, of course, is detrimental to the workings of a democracy. Silence or tardiness in getting out the news represents a clear case of market abuse. As happened in the US, with the subprime catastrophe, financial markets also depend on the news. To cite another example: all the time the French authority failed to speak up about Société Générale damaged the market. The Parmalat case was held up as a paradigmatic case: many levels of control were eluded, and the truth about the company’s books was kept hidden for ages. Particular attention was granted to “rating companies”: their role, their potential conflicts of interest and their lack of legal responsibility. While their judgements strongly influence markets, nobody holds them accountable. They can condition the entire economic system. Several recent phenomena were cited that effect economic information, such as Italy’s recent law on transparency in accounting.Participants also considered the capacity for crisis management in today’s political leaders. Once again, Société Générale was taken into consideration: the French president complained bitterly that he had not been kept informed, but had only learned of the crisis from the newspapers. Finally, discussion revolved around how journalists choose what is “fit to print”. In Italy, in particular, journalists tend to defer to big business and demonstrate little interest in small to medium-sized enterprises. A certain level of partiality is a must. Another sensitive point is the interpretation of economic data: recent media analyses that have been judged unrealistic or misleading have stemmed from a misunderstanding of the data available. Indeed, happily, the Bank of Italy has recently launched a course to train economic journalists.