How do banks communicate mergers and crisis to consumers?

In my experience, they just sit back and let the news media do that part. They eventually send out a letter, or take out an ad in the paper, saying “Don’t worry, Be Happy”.

Great pains are taken to not communicate mergers and crisis to consumers in order to avoid bank runs. When the FDIC determines that it’s time to pull the plug on a floundering bank, they discretely send a team to the bank at the end of the last business day of the week, with zero prior warning, and announce to the staff and management that the bank is being merged with bank “X”. Even bank “X” only finds out a few hours beforehand. The feds and the staff then work non-stop over the weekend to transform the bank into a branch of bank “X”. On Monday morning the doors reopen under a new sign, and that’s when customers find out.

It’s an amazing operation, all finely orchestrated to minimize panic by the depositors. If all the government ran as smoothly as the FDIC, we’d be in great shape.

@Harp – The bank also takes great pains to not communicate mergers and certain problems to employees who are not part of senior management.

Only because I’ve been through it before did I recognize the signs about two years ago. The merger didn’t happen, luckily, because the other bank is now in serious trouble with the OTS. That was two+ years ago. Many employees left during the merger talk time and weren’t replaced. Others have left since then and approximately 10% of those have been replaced. (With a staff of approximately 190 people, that’s not very many. And almost all of those were branch positions.) We were recently told, “no raises, no tuition reimbursement, we’re not filling open positions that aren’t 100% critical, no more travel and we’re done matching your 401k.” I truly believe that senior management is trying to get our stock price up to put us in a better position to be sold.

@jenpi – Sorry for the tangent! Harp is right, they try to keep things quiet to avoid a crisis, or more of one.

Poorly.

Most banks are way over their skiis. Its the well run regional banks that are the darlings-the ones that should be the vultures The FDIC is in panic mode, spending money this country doesn’t have, or won’t have any time soom.
Answer: they will do whatever is expedient to satisfy the principal players.