As described by John Gapper in the Financial Times recently, the crisis in world financial markets was anticipated by Warren Buffet, who warned that derivatives were “financial weapons of mass destruction” in the Berkshire Hathaway Annual Report 2002 . With the benefit of hindsight many a central banker will be wondering why that annual report wasn’t read more closely.
This last week has shown the effects when trust and confidence in financial institutions is lost. Restoring confidence in these institutions will take more than communications activity. That said, communications will have a role to play and the next two reporting seasons will be closely watched as the markets assess which institutions have really put the worst behind them.
When the markets do settle, it will be back-to-basics for many financial services corporate communications teams to rebuild the loyalty of shareholders, institutions, and consumers. With consumers raising concerns this week about the security of their savings - the extent of the challenge they face is not to be underestimated.