Posted by Matt Purdue
You know the whining must be loud when you can hear it all the way from Switzerland. The world’s banking titans are once again assembled in Davos for their annual confab. Amid all the confusion about how the global banking system may look in the future, one thing is painfully clear: the big banks still don’t get it when it comes to PR.
Financial giants are complaining that government leaders are threatening to place tighter restrictions on the way they do business. However, at least in the U.S., only a small portion of citizens surveyed in a recent Rasmussem poll opposes such measures. For example, only 29% of respondents are against limits on the type of investments banks can make.
But the bankers quoted in this Financial Times article just don’t understand the power of public opinion. Politicians read polls religiously, and they are feeding off the disgust Main Street currently has for Wall Street, the City, etc.
Instead of complaining, the banks need to become aggressive. Where is their proactive response to this reputational crisis? How about a top 10 list of actions banks are taking today to decrease systemic risk? How about a depositors’ bill of rights, spelling out exactly what consumers can expect in terms of financial security? How about town hall meetings with small depositors, to give them a chance to ask questions of bank CEOs?
Instead, we hear news like this: money manager State Street Bank & Trust just agreed to pay $300 million in restitution and a $10 million fine to settle charges that it misled investors about their exposure to mortgage-backed securities.
A huge disconnect still exists between banks, the general public and their elected officials. Unless banks come up with ways to convince the public that they are no longer doing business as usual, the politicians will continue to come pounding on the doors.
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