Smoke and Mirrors

You could not plan it better. A new 12 week undergraduate module starting this month at the European Business School in London on Financial Media and Communications. Just before it starts we have a serious eruption of instability in global financial markets, started by subprime mortgages in the USA. Crisis may be too strong a description, but it is certainly squally and the ramifications if anything appear to be widening. It is not normal for Central Banks to inject such large amounts of liquidity into the banking system and it is not normal when commercial banks are concerned about lending to each other.

So what's the relevance of the current financial situation to the course apart from providing an interesting backdrop?

Well, here is a list of some of the themes running through the current financial instability and which we are going to explore in the course:

• Financial transparency. It is generally argued that markets operate most efficiently when there is a free flow of information. Commentators are saying that lack of transparency over subprime mortgages and other exotic debt instruments is a major part of the problem. Why has the communications flow in financial markets broken down - or have they?
  
• Breaking the story. In journalistic parlance this story has legs. Nearly every day there are new breaking stories and it is already about three weeks old. The overall story is continuing to break out of the confines of the financial pages into mainstream media. Have the financial media done a good job on this story or should they have picked up the growing problems earlier? Has this story given the print media a real opportunity to show their strengths compared with TV or new media?
  
• Communicating to the markets. How have the Central Banks done in communicating to the markets? Are they rather edgy and uncertain and has their hesitancy caused additional problems? What about the banks - are they natural communicators or in fact rather clumsy with leaden feet? How do organisations plan for communicating in times of crisis and have recent weeks shown that the financial community may not be as well prepared in this respect as for example the airlines or oil sectors?
  

The module is going to be looking at the operation of financial markets through the lens of communications and making use of Porter's value chain to better understand the processes. To follow the ebb and flow of communications and the role of some of the key specialists in this process. How does the financial journalist weigh up a story; how does the financial PR consultant/investor relations advisor decide how to handle an announcement; how does the CEO or CFO plan for the announcement of a bad set of financial results.

All this and with a financial environment which has the potential to throw up many more financial media and communication issues in the coming weeks.