The Peston effect

The last week or so has seen some of the worst bank communications since 2007, when the Bank of England started a bank run by leaking news of Northern Rock's emergency liquidity request to the journalist Robert Peston. Then as now, awful communications have frightened the horses, triggered stampedes and caused banks to fail. Three banks in particular have shown an extraordinary insensitivity to popular fears: Silicon Valley Bank, Credit Suisse, and Wells Fargo. Two of these have paid a heavy price for their management's inept handling of vital communications. But the third seems to have got away with it - this time. Next time, it might not be so lucky. Exhibit 1: Silicon Valley Bank (SVB) In the wake of Silvergate Bank's failure, Silicon Valley Bank decided to restructure its balance sheet. SVB's full-year accounts released in February revealed that it was backing highly volatile uninsured deposits with long-dated government securities that were falling in value and