March 19, 2020
Citi CEO Attempts to Calm Financial Fears
In the midst of a major stock market tumble, the onset of the COVID-19 pandemic, and the closure of multiple major events and venues, fears are rising. Investors are worried. Workers are worried… Everyone is hoping for the best and trying to prepare for the worst. Into that maelstrom, one top-level financial sector executive is trying to calm fears.
Citi CEO Michael Corbat has a message for people who are forecasting another recession: “This is not a financial crisis… Banks are in solid shape…”
This message came after several CEOs of America’s largest financial institutions met with U.S. President Donald Trump to discuss the stock market downturn and the next steps to get the economy back on track. Coming out of this meeting, Corbat was not the only CEO saying not to panic, saying everything is alright, and asking concerned investors, workers, and consumers to calm down and understand that things are fine and getting better.
Bank of America Merrill Lynch CEO Brian Moynihan reminded worried investors that the banks are “very strongly capitalized” even as the Dow fell into a bear market. Meanwhile, after hitting an all-time high mark about a month ago, the S&P 500 also slipped sharply.
The reasons for the drop are stark and there are many. Dropping oil prices, fears about the spread of Coronavirus, and uncertainty about responses and the overall impact of the disease topped the list. But financial firm leadership encouraged people to be patient and be calm, promoting a cohesive narrative that this was a momentary blip and not a major issue. Bolstering this, the Federal Reserve planned to inject billions of dollars into the financial system in hopes that this would ease worries and keep things flowing in a positive direction.
From a consumer PR standpoint, the messaging here should be clear: don’t fear, don’t panic, this too will pass. That’s the message, because in the best of times, markets don’t like uncertainty. With oil prices doing what they’re doing and the ultimate uncertainty of a fast-spreading viral illness that no one seems to know how to stop, “uncertainty” is a polite term for how most people are feeling.
That doesn’t mean all is lost. Strong, positive, and consistent messaging from the leaders in the financial industry could help assuage fears and calm the upset that is surging through other sectors of the national economy. Open communications with financial sector media will help them amplify that message and go a long way toward getting people to respond in a more careful, measured way.