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.