Freddie, Fannie and a Communications Strategy…

by Peter Prodromou

This week’s crisis with mortgage giants Freddie Mac and Fannie Mae has reinforced the need for a strong communications strategy and community formation to quell fear and inspire confidence in the public. As with every financial crisis, this one has the potential to spiral out of control if public confidence isn’t re-inforced. The government’s swift action to provide credit to the mortgage giants, is commendable and, so far, has worked. Bit the prospect still remains that with the foundation of financial markets quaking, the public could lose confidence and financial institutions of all kinds - down to community banks - could begin to fail.

That’s what happened in the late 80s with the S&L crisis and what we saw was a spiral effect that compromised completely solvent institutions that should have survived. A key preventive measure this time around is a sound communications strategy to convey strength by reminding shareholders and depositors that your institution is strong. Heads of marketing at every bank should be reaching out to key constituents via media, social media and direct contact to reassure them of the strength of the institution. This kind of relationship building - through offline and social media - will inspire confidence and keep institutions that deserve to survive, out of harm’s way.

Also posted on www.rpgworld2blog.com