I want to tell the public let's go to the actual problem. The people who wanted to pull their money out of SBB didn't just get up in the morning and decide to do this. It wasn't just because they were afraid other people were doing it which is sort of the classic you know panic or runs that can take down a good bank. This was an insolvent bank. If you're not able to raise equity that's a very huge flag. They have these stupid stress tests they run. That's a market test that any corporation that wants to not be in bankruptcy should pass. And so I now by now studied extensively in my corporate finance theory had the dynamics of indebted
Communication is like a game. For it to work, each person has to trust that their partner will play by the rules. As Professor Anat Admati says, the same is true for corporations and their stakeholders.
“To have good governance, you need trust and accountability,” says Admati, a professor of finance and economics and the director of the Corporations and Society Initiative. How does a society ensure that markets, businesses, and governments are all on the same page? As Admati says, “We need rules. I can commit to you that I won’t harm you because something bad will happen to me if I [do].”
In this episode of Think Fast, Talk Smart, Admati joins host Matt Abrahams to discuss how communication forms a bedrock of trust that can align markets, businesses, and governments — for more accountable capitalism and a healthier society.
Connect:
More resources