Financial Services - Mahony Partners

Oct

2011

Morgan Stanley struggles to quell risk rumors

Financial Services, Taking & Managing Risk

The note earlier today by Morgan Stanley CEO Jim Gorman addressing what he called “confusion and misinformation” about the firm wasn’t too reassuring. It’s not likely to quell the rumors about the firm, nor does it do much to improve Gorman’s stature. By penning such a short memo (a mere 218 words), Gorman clearly did not want to appear to overreact to rumors, but he did not want to leave them unchallenged, either. He didn’t reply directly to the “misinformation” but instead offered up a few encouraging points from research analysts who cover the firm, along... Read More

Sep

2011

CEO pay, and an echo from 9/11

Financial Services

Today’s New York Times spotlights the rich payouts to failed CEOs, drawing special attention to three CEOs who recently were fired: Carol Bartz of Yahoo, Léo Apotheker of HP and Bob Kelly of Bank of New York Mellon. (See my earlier posts on how these departures were communicated.) While it may spark outrage, these payouts shoul... Read More

Sep

2011

Firing the CEO, Part 4: Parsing the UBS statement

Financial Services, Taking & Managing Risk

Swiss banking giant UBS today announced the resignation of CEO Oswald Grubel after a marathon meeting of its board in Singapore. There was speculation all week that the scandal could ultimately cost Gruebel his job but the suddenness of his departure is a bit of a surprise. His exit marks the fourth CEO firing in the past two weeks, and the second in the banking industry. The statement by UBS, while more detailed than earlier commentaries, nonetheless leaves several questions unanswered. There is no complete explanation of how the trading losses occurred and who besides the jai... Read More

Sep

2011

A one-hand clap for Jefferies

Financial Services, Taking & Managing Risk

Jefferies Group (NYSE: JEF) could have spared itself (and its shareholders) a lot of pain if it had better handled the news CEO Richard Handler’s stock sale. The news, reported as a result of a regulatory filing, sent shares of the investment bank tumbling more than 11% on Thursday. They recovered somewhat today, but investors remain shaken over the sale and the clumsy way it was handled. That’s a shame, because Jefferies did the hard part right. Usually, the CEO is tight-lipped about the reaso... Read More

Sep

2011

UBS: Pressure mounts after trading loss

Financial Services, Taking & Managing Risk

Today’s press coverage of the continuing drama at UBS suggests the saga is playing out in predictable fashion, as rivals seek to poach UBS deal-makers, whose bonuses are likely to shrivel following the bank’s losses. And speculation is mounting that CEO Oswald Gruebel will have to step aside. The situation has been made worse by UBS’s reluctance to move aggressively, along the lines I recommended in a Read More

Sep

2011

Friday Risk Reading: Advice on financial risk management from 15 years ago

Financial Services, Friday Risk Reading, Taking & Managing Risk

In light of the startling $2 billion trading loss that UBS reported this week, my Friday Risk Reading selection is a speech from 1996 by New York Fed President William J. McDonough. As president of the New York Fed from 1993 to 2003, when he was succeeded by Tim Geithner, McDononugh spoke often about bank safety, financial innovation and the impact of technology on banking. In 1996, he addressed a conference on Latin American banking in Buenos Aires and outlined the basic elements of sound risk manageme... Read More

Sep

2011

Silence reigns at UBS after trading debacle

Financial Services, Taking & Managing Risk

UBS has remained oddly silent since its brief press release announcing a $2 billion loss from unauthorized trades in London. The announcement chopped some $5 billion from the bank’s market cap, and neither CEO Oswald Grübel nor any other senior executive has addressed the matter. It’s instructive to compare UBS’s public response to that of other banks involved in similar situations. When Jérôme Kerviel’s trades racked up losses of $7.2 billion for Société Générale, its CEO, Daniel Bouton, faced the cameras and the critics head-on. He appeared at a press co... Read More

Sep

2011

The 3 things UBS must do

Financial Services, Taking & Managing Risk

Today’s stunning announcement by UBS that a rogue trader lost $2 billion presents big communications challenges for the Swiss bank. It will need to be forthcoming with regulators about the reasons for the loss and the breakdown in the bank’s internal controls. It must reassure private clients that their assets are safe, keep valued employees from fleeing and address investor concerns about the scale of risk-taking in the investment bank – all while trying to rebuild its businesses during a very rocky time in the markets. Clearly UBS has to answer some very tough questions abo... Read More

Sep

2011

A look back at 6 lessons in crisis communication from 9/11

Financial Services, Taking & Managing Risk

Like many people, I have been thinking about the events of September 11, 2001, as the tenth anniversary approaches. This article from the New York Times earlier this week focused on the media’s efforts to cover the anniversary with sensitivity, and it called to mind some remarks I gave about the media’s conduct in the immediate aftermath of the tragedy. In February 2002, just a few months after the attack, I had a chance to reflect on the lessons of 9/11 at a meeting of the Public Relations Society of New York. ... Read More

Sep

2011

3 Communication tips when firing the CEO

Financial Services, Taking & Managing Risk

Last week Bank of New York Mellon (NYSE: BK) abruptly announced that its CEO, Robert Kelly was leaving, citing “differences in approaches to managing the company.” The story made headlines for a day but was quickly forgotten, and the stock price has held pretty steady – both hallmarks of a communications success. Of course it helps that the bank doesn’t stir public passions the way some other banks do, and that its business dwells in the normally sedate world of securities custody and transaction processing. Still,... Read More