Swiss Currency Hurting Citigroup Consumer Relations

citi group swiss

Financial market watchdogs expect Citigroup to lose more than $150 million because of the roller coaster ups and downs of Swiss currency. But Ronn Torossian says the NYC-based currency trading company is not alone. Many top companies were caught entirely unprepared with the Swiss National bank surprisingly removed the cap on the value of the Swiss franc.

There is a larger issue, though, than the momentary – if momentous – financial setback. Now Citi – and several other financial companies – are waiting on a bailout. If it happens, the bailout will be from a private company, but that fact would not help much in the market of public opinion.

Consider, if the general public – or many news agencies – hear the words “financial company” and “bailout” in the same sentence, that could lead to an immediate PR hailstorm for the entire financial industry.

Most average investors – those with basic 401K’s and other retirement accounts – don’t understand all the facets and intricacies of the various domestic and international financial markets. But they know how they felt when their retirement accounts took a dive in the last decade. And they understand that these companies got “bailed out” by the government. Meanwhile, the average Joe got nothing for his nightmare.

That combination of functional financial illiteracy and poisonous buzzwords could make this situation very difficult for Citigroup and the other financial companies facing what could otherwise be a fairly pedestrian scenario. Yes, they need help, and, yes, they need that assistance from an outside company. But neither scenario is anything close to what happened prior to the federal bailout of investment companies after the real estate bubble burst.

But, strictly from a PR perspective, that “difference” is less than nuance. Worse, that situation could create more unrest among consumers who still blame investment banks for a very bad last few years. And worst, Citi and the other companies are not even sure the bailout will happen. They are already reportedly talking about contingency plans. That increases both this story’s time in the new cycle and the likelihood that it will get reported outside the financial news circles. Both scenarios further increase the risk of a negative response from people who will react to the news viscerally, not logically.

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