Do not mention the ‘R word’, US bankers tell themselves
Even if executives feel obligated to share bad news because of a fiduciary duty to investors, they are likely to hedge what they say, one adviser says
New York — Executives at the largest US banks are grappling with how to best talk about the slowing economy and its effect on their businesses as they enter earnings season, people familiar with their thinking told Reuters. Of particular concern is how to deal with the word “recession,” which has become all but verboten as US GDP growth has decelerated. Although many economists are predicting a downturn, a big bank executive doing so can become a self-fulfilling prophecy. On the other hand, a top banker dismissing recession worries to calm fears could be seen as uninformed or dishonest. When asked to name the single-biggest threat to the US economy at a congressional hearing on Tuesday, Citigroup CEO Michael Corbat answered, “Our ability to talk ourselves into the next recession.” The “R word,” as some are calling it, has been a topic of discussion during earnings planning, executives, investor relations staff and public relations officials said. There are a few well-tested strategi...
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