On September 17, 2008, the Financial Times reporter John Authers decided to run to the bank. In his Citi account was a recently deposited check from the sale of his London apartment. If the big banks dissolved, which seemed a distinct possibility to his Wall Street sources, he would lose most of his money, since the federal deposit-insurance limit at the time was $100,000. He wants to transfer half the balance to the Chase branch next door, just in case.
When Authers arrived at Citi, he saw “a long line, all dressed-up Wall Streeters,” all clearly terrified of the crisis, all waiting to move money around. Chase is also full of bankers. Authers got into a big story—but he didn’t share it with readers for 10 years. The range later he published, titled “In a Crisis, Sometimes You Don’t Tell the Whole Story,” is, he wrote this week, “the most negatively received column I’ve ever written.”
I found myself re-reading Authers’ column on Monday, after a bank run doomed Silicon Valley Bank and long lines were seen outside at least one other regional bank. Television crews are being deployed to local branches in search of worried depositors. Reporters and editors make split-second decisions about what to say, and what not to say, while the wider banking sector is under pressure. Some financial pundits choose their words carefully while on air and on Twitter. “It is easy for any of us to cause a [bank] run at this very moment,” Jim Cramer said on CNBC Monday morning. I could hear the self-awareness in his voice as he discussed banks like First Republic, which saw its stock drop 62 percent on Monday.
But for every careful commentator, there’s a panicked Twitter thread and a reckless talker. When a Fox and Friends The co-host said, “It’s time to be honest with the American people,” Ainsley Earhardt said, “We need to go to our banks and get our money.”
Most media outlets have higher standards than Fox and Friends. But ethical deliberations about how to handle a financial emergency are often confined to college classrooms and journalism blogs. When a piece of information can be valuable, profitable, and dangerous, all at the same time, what should members of the media do with it?
The informationJessica Lessin, the founder and CEO, faced a version of that turmoil after Silicon Valley Bank disclosed a nearly $2 billion loss and announced plans to shore up its balance sheet after markets closed Wednesday. Venture capitalists reacted with concern immediately in text chains and Slack channels; Lessin told me he got “nervous” from sources Wednesday night.
But The information, a 10-year-old tech publication with subscribers throughout Silicon Valley, did not immediately report on the anxious chatter. Its first reference to the bank’s problem came in a Thursday morning email newsletter, and the headline was about the bank’s stock falling in after-hours trading, with no mention of VC alarm bells. Lessin says this is intentional: “‘Talk’ is not nearly as newsworthy as ‘action,'” he told me. He instructed his team, he said, “to start reporting on concrete reactions—what the founders are actually doing, and what the bank is doing and saying.”
By noon on the West Coast, the team had answers to report. The six-bylined story began this way: “Silicon Valley Bank CEO Greg Becker on Thursday told top Silicon Valley venture capitalists to ‘remain calm’ amid concerns over a capital crunch that has of nearly $10 billion in the bank’s market valuation.” the information’s scoop was immediately matched by other news outlets, but there was more to learn. “As we get news of companies taking their money,” Lessin said, “we make sure to ask questions like ‘How much?’ and other details, as there is a difference between hedging, bailing, etc.
By the time Lessin took me to dinner at SXSW in Austin on Saturday, he looked like many of the other founders at the conference who barely slept for days. Silicon Valley Bank is The Informationat Lessin’s bank, so Lessin was part of the bank run he was covering. By Thursday evening, most of the company’s money had been transferred, and Lessin spent the next few days setting up new accounts and processes. I asked him Monday if this felt like a conflict of interest, since his company was affected by the story it covered—a fact not revealed to readers in that first scoop, but made clear by The information in its subsequent coverage. Lessin acknowledged the tension, saying he simultaneously tried to “serve the readers (especially the many on line) and serve my employees by managing our business wisely and trying to keep things as smooth as possible.” t is possible for them in unprecedented times.”
Not everyone is a fan of the aggressive reporting that puts the extent of the bank’s problems on the public record. “As a business owner,” Rafat Ali, the CEO of travel-news site Skift, tweeted Thursday, “real-time reporting on SVB is NOT useful at all, only increasing panic.” Lessin responded by emphasizing the need for caution, but then asked “Is it fair to NOT report the facts about the situation and let that information be known only to insiders?”
In 2008, Authers may have sent a photographer to his Citi branch. “We didn’t do it,” he wrote. “A story like that on the front page of the FT could be enough to push the system over the edge. Our readers were not warned, and the system went without that final prod into panic.”
Authers, now on Bloomberg, remains confident that he made the right choice. He found himself thinking Monday about how much has changed since 2008. “Junior financial journalists have it drilled into them that you have to be very, very careful never to appear to predict a bank run—it’s just possible that you’ll take the blame for causing one,” he wrote in his Bloomberg newsletter. “But one of the critical changes since 2008 is that the monopoly that the media enjoyed on financial information is now gone.”
Indeed, now that almost everyone is a member of the media, thanks to social networking, does it matter how journalists behave if investors can tweet themselves in a panic?
The answer is still yes. In fact, the ease with which rumors can spread may make good reporting more important than ever.
When I asked Bill Grueskin, former deputy managing editor at The Wall Street Journalabout the factors that newsrooms should consider when reporting on a banking crisis, he said that “the main thing reporters have to do is report the news—as accurately and quickly as they can —and avoid exaggerating or minimizing the dangers of falling out of their stories.”
If I had a cameraphone in that Citi branch in September 2008, I would have taken a picture. But in a financial crisis, journalists should be the layer of verification for consumers, helping their audience separate their fears from the facts by reporting what really is. they know. And as fear fades, journalism becomes an important tool of accountability and reform.
“Reporters who can provide historical context—that explain why 2023 is not 2008, and why SVB is not Lehman—are performing a tremendous public service,” Grueskin said. “As people can dissect what regulatory or legislative changes allowed this collapse, and what is needed—politically as well as legislatively—to prevent something similar from happening anytime soon immediately.”