"Confidence"

The turmoil surrounding Credit Suisse, Silicon Valley Bank and Signature Bank over the past couple of weeks makes for a troubling spectacle. Fifteen years on, are we about to witness another string of failures as rising interest rates and borrowing costs make casualties out of banks believed to be “too big to fail”?

The world’s central banks are proclaiming their individual financial systems, and therefore the global one, as robust and stable and most industry experts seem to support this – the issues affecting the failed banks are not typical of all. Yet, while the announcement on Sunday evening that UBS will acquire Credit Suisse was meant to calm nerves, the stock markets have experienced a shaky start to the week.

There is one word in the associated coverage that stands out to me: “confidence”.

Naturally, against the backdrop of what’s happening, proceeding with prudence is essential. But, at the same time, that “confidence” has been impacted or that investor “confidence” remains low points to a subjective element to the situation.

It’s a reminder that every commercial, strategic and operational decision is, to a greater or lesser extent, based on emotion, sentiment and gut-feel. You can draw upon all the data in the world but personal experience, intuition, preconception and fear will always be involved, sometimes rightly so, sometimes more than it should be.

It’s the reason why people are one of the most complicated aspects of a business, perhaps the hardest part to get right and, therefore, one of the most interesting and challenging.

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