Washington Post ombudsman Andy Alexander reports on how the newspaper decided to mention that federal regulators considered closing a Pennsylvania bank after it was accidentally disclosed in an Office of Thrift Supervision release.
Alexander writes, “Here’s how it unfolded: The e-mail sent to reporters on July 31 announced the closing of Peoples Community, an Ohio bank located in West Chester, near Cincinnati. But the e-mail said the bank in Pennsylvania –- it was crossed out with red lines -– also had been closed. Within minutes, OTS issued a retraction on the Pennsylvania bank. But it was clear that it had been considered for closure.
“Post banking reporter Binyamin Appelbaum consulted with his editors, and they decided to write the story, but without naming the Pennsylvania bank. The story, which appeared the following day, began: ‘The Office of Thrift Supervision accidentally disclosed Friday night that it considered closing a small Pennsylvania bank — a rare breach of the rigorous silence that banking regulators maintain about the health of individual companies.’
“A few paragraphs later, after explaining the e-mail, Appelbaum wrote: ‘The Washington Post is not naming the second bank so as not to exacerbate potential harm caused by the e-mail. News that a bank might fail can become a self-fulfilling prophecy. Depositors sometimes start withdrawing money despite the federal guarantee protecting most accounts, and customers may begin to take their business to other banks.'”
Read more here.
