The Power of Social Media
Bankers are blaming social media for the fall of their banks. I was part of the movement against them and want to show you, how ridiculous this statement is!
It was last Sunday afternoon, at around 2 pm, when I read the news that the Swiss Federal Council would hold a press conference later that evening. In it, they planned to announce what the rescue plan for Credit Suisse would look like. All the signals pointed to yet another bailout of a prominent Swiss bank.
I knew I had to watch. A few hours later, I sat down on my couch, opened YouTube on my TV, and laid back to enjoy the show. The Livestream came up, and I seemed to time it perfectly because all the journalists settled down, and the speakers were ready to begin.
For the first 30 minutes, the representatives of the Federal Council, Credit Suisse, UBS, and the Swiss National Bank explained the plan to merge the two banks and save Credit Suisse. Funnily enough, they didn’t call it a bailout but a commercial solution. You know, the type of commercial solution where the government gives you 200 billion Swiss Francs and tells you what to do.
Once the explanations were over, which were hilarious, the press secretary opened the floor for questions. Because the consequences of this deal are of international importance, you found a lot of international journalists in the room as well.
They were in a league of their own compared to local reporters and asked the right questions. How can it not be a bailout? Why were they dragging the news out until Sunday? What will the future of Credit Suisse look like, and how will shareholders of both banks react?
The representatives struggled to give good answers. Mainly, Credit Suisse Chairman Axel Lehmann avoided any questions about whom we must blame for this catastrophic failure. Three or four times, he dogged the question entirely, but halfway through, he gave the answer of the century!
Back in October of last year, many people on social media posted how Credit Suisse is done and that the bank’s end is near. This sparked a panic in the markets and got them in trouble. In Lehmann’s eyes, the shit posters on social media were the reason for this failure.
I repeat: THE SHIT POSTERS ON SOCIAL MEDIA WERE THE REASON CREDIT SUISSE FAILED! If there was ever a moment where one meme fits perfectly as an answer, it’s this one.
You may know by now that I like to ridicule Credit Suisse, and I was obviously one of these shit posters as well. Here is one of the more neutral posts I sent out there last year.
Dear Mr. Lehmann, it wasn’t our posts that brought Credit Suisse to its knees, but your shitty risk management resulted in a significant loss of confidence from your investors. They didn’t see the utility of Credit Suisse anymore and pulled out. This is what brought you guys down, not the funny memes on Twitter.
A few minutes later, the finance minister, Karin Keller-Sutter, picked up on that trend and continued to blame social media and Twitter for Credit Suisse’s failure. At this point, I was waiting for someone to blame Elon Musk. The local journalists also picked up on it and even went as far as asking if this was a coordinated attack.
I must have been laughing so hard that my neighbor heard me. He asked me the next day what movie I was watching. To which I responded; the best one yet! It’s called corruption and incompetence in one room.
Back to the press conference. I calmed down after a few minutes and watched until the end. There were more statements as to why this isn’t a bailout and how it’s a positive thing to have an even bigger bank to fail in the future. You know, just everyday stuff you say on a Sunday night.
Once it ended, I sat there and immediately picked up my laptop to read the responses online. A lot of people picked up on the statements as well. Everyone was having a good time and joking that their banks might fall as well if they were to post a meme about them.
The next day you would even find news outlets like Bloomberg picking up on it and joking about the ridiculousness of the statements. Hosts would make sneaky statements, and reporters would ask banking experts if the statement had any merit. Many of them laughed and said no, this is silly.
However, this was not the first time we heard about it. Social media played a significant role in SVB’s failure as well. Initially, it wasn’t shit posters but investors such as Bill Ackman or Peter Thiel who posted their opinions. What unrolled after that was a long weekend of VC Twitter rants and the beginnings of a digital bank run. The bank opened on Monday and, as you know by now, hasn’t recovered since.
All of these events show the fragility of the banking system. Even though all banks claim to be digitized and integrating new technology into their existing systems, the truth is they’re not! Just because you use an app and build on the latest tech stack doesn’t mean you think digitally natively.
The modern bank client doesn’t have time to wait for three days. They want it done instantly and without any interference from bank employees. Especially over here in Europe, more and more people use mobile-first banks and refuse to visit a branch. They get their information from social media and not from a press release sent to them by mail.
Which is what all these banks in the US ignored utterly. They didn’t think ahead and asked themselves if they could protect themselves against a digital bank run. The FED announced their new real-time money system called FedNow, which most banks must integrate to get faster access to liquidity. But even if they launch successfully, the danger of another digital bank run is still there.
Like every bailout or banking crisis, we won’t see any improvement from banks in the near future. They might integrate FedNow and try to improve some of their mobile banking, but in the long run, they’ll go back to their usual ways of doing business.
It’s ironic; just like they did with the internet in the 90s, they’re also ignoring the power of social media, which isn’t a place anymore to interact with friends, debate for hours with idiots, or simply consume content. It’s now a banking killer and a weapon for shit posters. To quote Uncle Ben from Spidermen: With great power comes great responsibility.
Therefore, continue shitposting. Let’s bring down the banks and build a better future with Bitcoin because that’s a bank you own and can verify everything in it. One which has proven time and again that nothing can stop it!
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