Major lenders tell employees not to poach clients from stressed banks
The nation’s largest banks are telling employees not to steal clients from banks under stress as a wave of uncertainty looms over the financial industry following the collapse of two large banks earlier this month.
Bank of America, Citigroup and JPMorgan Chase are among the major lenders telling their employees not to make the situation worse.
JPMorgan Chase told its employees they “should never give the appearance of exploiting a situation of stress or uncertainty,” in a March 13 memo, extracts of which were seen by Reuters. “We do not make disparaging comments regarding competitors.”
Citigroup and Bank of America sent similar guidance to its employees. Wells Fargo CEO Mary Mack also echoed the sentiment.
“We should not engage in any activity that could be perceived as taking advantage of the current situation to the detriment of others,” Mack said in a staff memo.
The warnings come as the high-profile bank runs at Silicon Valley and Signature banks have caused a massive movement of nearly half a trillion dollars from small to large banks, according to a JPMorgan analysis.
Clients generally view the nation’s largest banks as more secure and resilient to collapse, but industry experts say that if too much money leaves small banks the crisis will only continue.
“We all have a vested interest in keeping America’s financial system strong and thriving,” a JPMorgan spokesperson told Reuters. “It’s the envy of the world with thousands of institutions of all sizes serving every corner of the country.”
Industry leaders and regulators have repeatedly attempted to reassure the public that the financial system is safe and that moving money to large banks is unnecessary.
“The situation is stabilizing,” Treasury Secretary Janet Yellen said earlier this week. “Large banks play an important role in our economy, but so do small and mid-sized banks. These banks are heavily engaged in traditional banking services that provide vital credit and financial support to families and small businesses.”
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