Unpleasant facts, such as losses in particular, are not published promptly. But because bad news is always leaked – by business partners directly involved, by insiders, by staff in general, and by whistleblowers in particular – rumors are demonstrably generated. As the subprime crisis has shown, these do far more damage to the reputation of a company in general and a bank in particular than an immediate report of a loss. In addition, the postponement of information leads to a climate of growing mistrust, especially in the financial market, because every market participant suspects that the partner is unable to cover previously assumed risks. As a result – as in the wake of the subprime crisis – the market may dry up and the central bank may have to intervene through money market operations, by injecting liquidity. – See ad hoc announcement, money market operations, information, quantitative easing, salami tactics.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/