What to Remember When Covering Bank Failures

Bank failures can have catastrophic consequences for everyone ranging from wealthy people to ordinary workers. Covering bank failures can be a challenging task for journalists, especially when dealing with large and complex financial institutions and the equally large and complex fallout that comes from their collapse. The recent failure of Silicon Valley Bank in March 2023, which marked the second-largest bank failure in United States history, highlights the importance of effective and accurate coverage of such events. 

Here are some tips for journalists to consider when covering bank failures.

KNOW YOUR SOURCES

It is essential to know the right sources to approach for information when covering bank failures. According to Fatima Hussein, a journalist who covers the U.S. Treasury Department for The Associated Press, understanding the agencies involved in bank oversight is crucial. Other banks that have failed recently include First Republic and Signature Bank, and U.S. government agencies that have been involved include The U.S. Treasury, U.S. Securities and Exchange Commission, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Consumer Financial Protection Bureau.

Covering these agencies can be insightful because lawmakers might not always be forthcoming with information. In some cases, press agents from smaller agencies that are not usually associated with banking crises may be more willing to provide information than lawmakers within these departments. Therefore, it is essential to build relationships with these sources and rely on them for accurate and reliable information—and it’s not such a bad idea to build relationships with policymakers over time either.

KNOW WHAT YOU KNOW AND WHAT YOU DON’T

Journalists should recognize their blind spots versus their specialties when covering bank failures. It is essential to identify the areas where they can provide the most valuable coverage. For instance, if a journalist specializes in covering Congress, they are more likely to be able to reach out to lawmakers and access information from the House Financial Services Committee. However, they might not be well-versed in covering agencies, which is where they would need to lean on their colleagues for assistance. In this way, knowing their strengths and weaknesses can help journalists to identify the best sources to rely on and provide a more comprehensive and accurate report.

KNOW YOUR AUDIENCE AND WHAT THEY NEED TO KNOW

Knowing the target audience is essential when covering bank failures. Journalists should tailor their coverage to suit the needs and interests of their audience. According to Hussein, different news organizations have different audiences, and how they cover bank runs will differ depending on their readership. For instance, the Associated Press's audience is the average consumer, according to Hussein, and therefore their coverage of bank failures should be geared towards providing information that is accessible and easy to understand for the general public. Journalists should consider their audience's level of financial literacy and use language that is clear and concise.

KNOW HOW TO COVER CONSEQUENCES

Journalists should also be aware of what comes next after a bank failure. In the case of Silicon Valley Bank, Hussein suggests that the review of the Federal Reserve is the next critical step. Conservative lawmakers are asking questions about the regulators' role in the crisis, and the Federal Reserve is conducting an independent review. Journalists should keep an eye on the review's progress and stay informed about who the key players are. They should also be prepared to cover any subsequent failures that may occur in the future.

With talks of the debt ceiling now reaching a critical point, with a U.S. default expected as soon as June 1, all eyes are on banks across the country to see if they’re solvent, or if the U.S. is headed into its third major financial crisis in 20 years. Bank failures like Silicon Valley Bank’s may have stirred questions in consumers—questions journalists can answer with thorough research. The importance of understanding what causes bank failures, why they happen, and what they mean for the average person is essential for citizens to learn how to protect themselves and make solid financial decisions.