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 melted down, which felt like a distinct possibility among his Wall Street sources, he would lose most of his money, because the federal deposit-insurance limit at the time was $100,000. He wanted to transfer half the balance to the Chase branch next door, just in case.
When Authers arrived at Citi, he found “a long queue, all well-dressed Wall Streeters,” all clearly spooked by the crisis, all waiting to move money around. Chase was packed with bankers too. Authers had walked into a big story—but he didn’t share it with readers for 10 years. The column he eventually published, titled “In a Crisis, Sometimes You Don’t Tell the Whole Story,” was, he wrote this week, “the most negatively received column I’ve ever written.”
I found myself rereading Authers’s 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 have been deploying to local branches in search of worried depositors. Reporters and editors have been making split-second decisions about what to say, and what not to say, while the wider banking sector is stressed. Some financial pundits are choosing their words very 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 fall 62 percent on Monday.
But for every cautious commentator, there is a panicky Twitter thread and a reckless talking head. When a Fox & Friends co-host said, “It’s time to be honest with the American people,” Ainsley Earhardt blurted out, “We need to go to our banks and take our money out.”
Most media outlets have higher standards than Fox & Friends. But ethical deliberations about how to cover a financial emergency are mostly confined to college classrooms and journalism blogs. When a piece of information can be precious, profitable, and dangerous, all at the same time, what should members of the media do with it?
The Information’s founder and CEO, Jessica Lessin, faced a version of that quandary after Silicon Valley Bank disclosed nearly $2 billion in losses and announced plans to shore up its balance sheet after the markets closed on Wednesday. Venture capitalists reacted with concern right away in text chains and Slack channels; Lessin told me she picked up on “nervousness” from sources Wednesday night.
But The Information, a 10-year-old tech publication with subscribers throughout Silicon Valley, did not report on the anxious chatter right away. Its first reference to the bank’s trouble came in a Thursday morning email newsletter, and the headline was about the bank’s stock plunging in after-hours trading, with no mention of the VC alarm bells. Lessin said this was intentional: Talk isn’t nearly as newsworthy as action. She directed her team, she said, “to start reporting on concrete reactions—what were founders actually doing, and what the bank was doing and saying.”
By midday on the West Coast, the team had reportable answers. The six-bylined story began this way: “Silicon Valley Bank CEO Greg Becker on Thursday told top venture capitalists in Silicon Valley to ‘stay calm’ amid concerns around a capital crunch that wiped nearly $10 billion off the bank’s market valuation.” The Information’s scoop was soon matched by other news outlets, but there was much more to learn. “As we were getting word of companies pulling their money,” Lessin said, “we were making sure to ask questions like ‘How much?’ and other specifics, as there was a difference between hedging, bailing, etc.”
By the time Lessin took me to dinner during SXSW in Austin on Saturday, she looked like many of the other founders at the conference who’d barely slept for several days. Silicon Valley Bank was The Information’s bank, so Lessin was part of the bank run she’d been covering. By Thursday night, most of the company’s money was transferred out, and Lessin spent the next few days setting up new accounts and processes. I asked her on Monday if this felt like a conflict of interest, because her company was affected by the story it covered—a fact not disclosed to readers in that first scoop, but made clear by The Information in its subsequent coverage. Lessin acknowledged the tension, and said she’d simultaneously tried “to serve readers (especially with so much on the line) and serve my employees by wisely managing our business and trying to keep things as smooth as possible for them during unprecedented times.”
Not everyone was a fan of the aggressive reporting that put the extent of the bank’s problems on the public record. “As a business owner,” Rafat Ali, the CEO of the travel-news site Skift, tweeted on Thursday, “the real-time reporting on SVB is NOT helpful at all, only increasing panic.” Lessin replied by emphasizing the need for caution, but then posed the question “Is it fair to NOT report facts around the situation and let that info be known only to insiders?”
In 2008, Authers could have dispatched a photographer to his Citi branch. “We did not do this,” he wrote. “Such a story on the FT’s front page might have been enough to push the system over the edge. Our readers went unwarned, and the system went without that final prod into panic.”
Authers, now at Bloomberg, remains confident that he made the right choice. He found himself musing on 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 seem to predict a bank run—it’s just possible you will end up taking the blame for causing one,” he wrote in his Bloomberg newsletter. “But one of the critical changes since 2008 is that the monopoly that established media enjoyed over financial information has now disappeared.”
Indeed, now that virtually everyone is a member of the media, thanks to social networking, does it even matter how journalists behave if investors can tweet themselves into a panic?
The answer is still yes. In fact, the ease with which rumors can now spread might make good reporting more valuable than ever.
When I asked Bill Grueskin, formerly a deputy managing editor at The Wall Street Journal, about the factors that newsrooms should consider when reporting on a bank crisis, he said that “the main thing for reporters to do is to report the news—as accurately and quickly as they can—and avoid exaggerating or minimizing risks of the fallout from their stories.”
If I’d had a cameraphone at that Citi branch in September 2008, I would have wanted to take a photo. But in a financial crisis, journalists should be the verification layer for consumers, helping their audience separate their fears from the facts by reporting what they actually know. And as the panic passes, journalism becomes a crucial tool of accountability and reform.
“Reporters who can provide historical context—explaining why 2023 is not 2008, and why SVB is not Lehman—perform a tremendous public service,” Grueskin said. “As do those who can dissect what regulatory or legislative changes enabled this collapse, and what would be required—politically as well as legislatively—to prevent a similar one from happening anytime soon.”
