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PR needed to prevent a run on the banks

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PR needed to prevent a run on the banks

In the film Margin Call the Jeremy Irons character (John Tuld), a bank chairman who has seen it all before, is reassuring an anxious colleague, Kevin Spacey (Sam Rogers).

The plan is to ditch a load of worthless assets on other banks; with the government to sort out the mess later.

“It’s just money; it’s made up. Pieces of paper with pictures on it so we don’t have to kill each other just to get something to eat,” says Tuld.

There’s nothing wrong with legging over your rivals, is his point. It is what bankers do. And they can’t help themselves.

Credit Suisse bondholders are on the thick end of that reality today, as $17 billion worth of bonds were wiped out overnight. “In my eyes, this is against the law,” said one of the completely-legged-over investors.

There is no need to weep for fund managers who got it wrong. But the public might begin to think that if even the well-informed can’t see what is around the corner, it’s time to panic.

If this latest banking crisis isn’t going to turn into a re-run of 2008, PR is going to play a serious role.

Ordinary bank depositors who can now move money via an app on their phones need reassurance, beyond just platitudes from the Bank of England.

Before the digital age, it was generally thought better that we didn’t understand what was going on.

Henry Ford famously said: “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

A revolution before tomorrow morning is now possible anyway. The flaks (and the hacks) need to explain why we’re all going to be ok, in language anyone can follow.

Press release of the day

Only 9% of retired over 50s say the pension changes might encourage them back to work according to this from interactive investor.

A poll shows that most retired folk are perfectly happy being retired, shock.

Alice Guy says: “It’s a big ‘no thanks’ to the Chancellor’s offer for more pension savings.”

Stories that will keep rolling

1) What have people stopped buying from Kingfisher to cope with the cost of living?

2) How are interest rate expectations moving today?

3) Is SThree seeing a tech hiring slowdown?

4) Which is the next financial instrument almost no-one had heard of to face distress?


Socialise the losses, privatise the profits

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