The spotlight has turned into the financial media, and how they failed to report the warning signs ahead of the current financial crisis, writes Anton Harber in Business Day. Should they serve the market, or the wider public interest? And do they know enoughbout the complexities of finance and related fields to do their job?

Anton Harber writes in Buiness Day:

IT FELL to a comedian in the US to take apart financial journalists and their role in the current global crisis. Jon Stewart of Comedy Central's Daily Show strung together snippets of business channel CNBC's reports to show how wrong their advice had been.

The result was a devastating indictment of financial reporting. It included a CNBC person telling viewers not to sell their Bear Stearns shares, how good Lehman Brothers management was, and how Merrill Lynch had plenty of capital, in all cases just weeks before they had to be bailed out, sold or closed.

Stewart was asking the questions financial journalists need to ask themselves. Why were we not adequately warned? Why were shares being promoted right until they collapsed? Did journalists fail to subject the financial system to the scrutiny it needed? Are our reporters equipped to tackle this difficult subject properly?

Media commentator Danny Shechter believes the media failed to heed the warnings about dangerous lending practices, because of vested interests. "The newspaper industry became, in some communities, the marketing arm of the real-estate industry. In some cities you had newspapers getting a piece of the action of sales through the ads they generated – they were actually part of the corruption. So of course there was little real scrutiny of what was … happening in the neighbourhoods where mortgage fraud was pervasive," he wrote in the British Journalism Review.

Shechter made a film in 2007, In Debt We Trust , warning of the severity of the collapse if nothing was done, and published Plunder, a book that rips apart the greed of the financial industry, just days before Lehman Brothers collapsed.

Others have accused the financial media of being too close to Wall Street and the City in London, of being embedded in the business community. Reporters treat the big names of business with deference, and seldom know enough to ask really tough questions . "Buy, buy, buy " was the message right up until the markets crashed.

"It's unfortunate," Financial Times managing editor Daniel Bogler said in an interview with Editor s Weblog, "that the financial literacy and understanding of how things work in the City … is actually very thin in financial journalism."

Howard Kurtz, media reporter for the Washington Post, talked of the "cheerleading" that often characterises financial reporting, and said "most news organisations fell short in reporting the lax federal regulations that everyone now admits was at the root of the problem".

Polis, a policy research project at the London School of Economics, published an important report, What is Financial Journalism For? The current crisis, they said, had raised profound questions about the quality of reporting.

Polis says journalists are often uncertain whether their role is to serve the market and investors, or to serve a wider public interest. If it is the former, it constrains their capacity to ask questions, which may harm the market or investment.

Polis also pointed out that spending on financial public relations rose sevenfold from the 1980s to the 1990s — so there is a huge, well-resourced machinery to try to bring journalists into the fold and have them serve narrow interests.

And it may be that the steady decline of newspapers in developed countries in recent years has taken its toll, leaving newsrooms less well equipped to deal with complex stories. The cost of bad reporting is severe indeed. Take a look at South African financial reporting and you will see only a few individuals who know enough and have the boldness to question the heavyweights of business. With some notable exceptions, reports consist of media releases and comments by CEOs, fund managers and embedded economists.

It is time to think carefully about Polis's question: who should financial journalists be serving: the market, or the public? And do our reporters and editors have enough knowledge to challenge business leadership when it is needed?

* Harber is Caxton Professor of Journalism at Wits University. This column first appeared on April 1.