Secret bank loans and communication

I was quite shocked when reading about a secret loans totalling £61.6 billion made two ailing UK banks (London Evening Standard front page, 24th Nov 2009). Bank of England’s governor revealed that collosal loans have been made last year in order to protect investors from panic which could have a detrimental effect on whole financial sector. Thinking about it I seem to agree that such lack of transparency isn’ exactly a bad thing. It’s a well known fact that spreading bad news across an industry isn’t helpful. Exact knowledge of true scale of the banking crisis wouldn’t do anything good for both: the sector and, the investors, and indeed the taxpayers themself. In that light an argument for preventing banks from revealing their books does look sensible. If banks’ balance sheets and annual reports were made secret, there will be no reason for this whole lack of confidence and turmoil on financial markets. You should always be careful with conveying negativity and be more sensitive to your audience.