On March 10, 2023, Silicon Valley Bank failed after a bank run, marking the second-largest bank failure in United States history and the largest since the 2007–2008 financial crisis. It was one of two bank failures in the United States in March while some other banks faced crises. Fatima Hussein, who covers the U.S. Treasury Dept. for the Associated Press, briefed Paul Miller fellows on her tips for covering bank failures.[Transcript | Video]
4 takeaways:
➀ Know your sources, or ask your colleagues for help.
Hussein said her typical coverage area is sanctions. So, when the collapse of Silicon Valley Bank happened, she first thought about what agencies are involved with any oversight of Silicon Valley Bank, First Republic and Signature Bank. Hussein suggests knowing the policymakers behind the following: The U.S. Treasury, U.S. Securities and Exchange Commission, Federal Reserve, Federal Deposit Insurance Corporation, and Consumer Financial Protection Bureau.
“So covering the agencies will be really insightful because the lawmakers oftentimes or sometimes won’t really want to talk to you,” she said. “So it’s helpful to go through the agency route and every so often, especially with smaller agencies that you don’t necessarily think of first in a banking crisis, they might have press people who are willing to give you something as opposed to a lawmaker or somebody who would be just so tightlipped about it that you just don’t understand what’s happening.”
“There’s no way you could possibly cover a bank failure or series of bank failures alone,” she said. Rely on your colleagues who have been doing this longer than you and might have helpful sources. “Also, if you ask your editor, most of your editors have covered the 2008 crisis, and so they have sources that they could hand off to you.”
➁ Know your strengths and weaknesses.
“If you cover Congress, your strengths are going to be reaching out to lawmakers and knowing lawmakers. If it’s the House Finance or Financial Services Committee, you’re going to know people there. They’re going to give you information, but you might not know anything about agencies or agency coverage, and that’s where you lean on your sources or your colleagues.”
But even Hussein panicked when Silicon Valley Bank and Signature Bank failed. “I was like, ‘Oh, God,’ and having that moment of, ‘How do I do this?’… Even though we’re reporters or journalists and we’re supposed to just feel like we can run into a flaming fire and just cover everything without hesitation, it’s just like, that’s not true. We’re human.” That’s when she decided to look at her strengths and go from there. She knows how agencies work, but isn’t very good with Congress and lawmakers, she said. “But I’m a trained lawyer, so I know how to read lots of documents, and I know how to plot out, ‘If this person does this, then I can read all their stuff.’ I knew that after learning a bit more about the crisis that it wasn’t just the Fed that’s a regulator of Silicon Valley Bank, but also a state regulator.”
➂ Know your audience.
The media has a very important role in the bank failure, she said. If everyone writes about Credit Suisse, UBS, Signature Bank and First Republic in the same way, we don’t add any context, she said. “That could, in some ways, impact the nature of the crisis.” Know your organization’s role too, she said. “So Politico is different from the AP, which is different from Bloomberg, which is different from The Post.”
“The AP’s audience is your average consumer, and they could also have a role in a bank run as well. So it’s important to remember that when you’re writing your stories, how you’re guided on how to cover a bank run will be very different based on who your audience is.”
➃ What’s next? The review of the Federal Reserve.
“What we’re hearing from conservative lawmakers is, where were the regulators in all of this? I think the next thing will be to what degree were the regulators aware of what happened,” Hussein said. The Federal Reserve is doing an independent review, so there might be questions about whether an independent reviewer should oversee this review of what happened, she said. Now’s the time to do research on how this happened and who the major players are, especially if another bank fails soon.
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