Crisis Communications: Black Swan Edition

Over the course of my career in foreign exchange I was witness to many market upheavals, including the Asian financial crisis of 1997, the adoption of the Euro in 1999, and Brexit in 2016. I suppose I could have thrown "Y2K" in there, but we all know how that turned out.

One event I did not mention, but that really stands out for me is the Swiss National Bank (SNB) removing the Swiss franc (CHF) peg against the Euro (EUR) in 2015. Whereas the other crises I mentioned unfolded over the course of months or even years (Brexit even had a scheduled vote), the SNB acted abruptly and without warning. This is what we call in the markets a Black Swan event - completely unexpected and catastrophic.  

Deceptively Beautiful

Just minutes after the announcement, the EUR/CHF rate plunged 20%, and the trading desk where I worked was in chaos. As the events unfolded, we went into crisis communications mode. We first had to make sure we were getting accurate information, as there was a lot of market chatter about what was happening. The next step was keeping senior management apprised of the situation. Information had to be conveyed quickly as well, as we were operating in a fast-moving market where literally every second counted. Lastly, what are we doing to protect the bank and our customers? Communicating an action plan demonstrated that we were implementing the appropriate risk management procedures. 

Good crisis communications involve swiftly assessing the situation, understanding stakeholders' concerns, and crafting a cohesive narrative to address issues head-on. Transparency is also critical, as this helps to build trust and credibility. There will always be crises in any profession, so having a plan in place is critical to ensure an appropriate response. Who knows when the next black swan will come home to roost?