Thursday, December 13, 2012

Banking Spin and Your News

In Canada, we have something called The Royal Bank of Canada, also known as "RBC".  It is a Canadian bank, that much is true. It calls itself Royal, but has no royal ascent, warrants or royal charters, and the embedded phrase "Bank of Canada" doesn't mean it has has any bearing with the actual "Bank of Canada" either.  In short, the brand always leaves an impression to me personally that the whole thing is a bit "eyes + wool" - but that's branding for you.  Once you see past that facade, it's just another bank.

So, it was this morning as I was scanning through Twitter, I noticed something from CTV News that proclaimed that come 2013, the Canadian economy was going to get better - according to RBC.

This is not news.  Here's why:

1.  The Canadian economy is so fragile that the Bank of Canada (not the "Royal" one, but the actual one) set interest rates at 1% because the economy can't stand up on it's own.  
2.  The same bank has had to leave it there for what seems like a lifetime, because until something changes fundamentally, the economy is not going to recover.

So it is with this back drop of history that I turn your attention to this proclamation from the summer.

Yes, the same bank was singing from the same hymn sheet earlier in the year.  What has changed since? Not a lot - other than the dates.

I've said this before, but I'll say it again: A news release like this is not being done because the bank is being all philanthropic towards the general public.  It's corporate spin that does something to serve the bank's own purposes.  The media needs to stop automatically repeating corporate spin as "factual news" when (as seen here) there is a clear audit trail of inaccurate predictions that precede it.  As a member of the public, you should equally look at what the news is pumping into the media streams that you consume, and question it where necessary.  

If people had acted on what RBC had told them previously in the summer, such as borrowing more money, thinking we'd be out of this hole by now, it'd most likely have played out to be detrimental to the average person.  Q.E.D, when the public loses out to excessive borrowing, it's the lenders that profit from this loss.  As nobody holds the banks accountable to this type of thing, they're free to repeat it - and the news will gladly keep transmitting this tripe.

Now that I've framed the scenario: ask yourself what you think the point of that release was?