JP Morgan Chase & Co. Shatters Trust and Investors’ Confidence | Trust in Business
What happens when financial institutions like JPMorgan Chase & Co. breech trust? Investors will put less money into JPMC and other large firms because again, trust is broken. This always hinders growth in the economy because investments in business spur growth. Recently, JPMC’s top level executives apparently sold back bad loans for only a portion of the actual cost. They then proceeded to leave the mortgages in mortgage backed securities (which are no longer backed) and kept the money they received from the originators.
Can JPMC ever rebuild trust with their investors? YES! There is always hope. Look at the example of BP. After the BP oil spill in 2010 many thought they would never be trusted again, yet the BP brand is coming back because they are building what The Trust Edge calls the PILLARS OF TRUST. Unlike some insurance companies after Hurricane Katrina, BP made promises and kept them. They paid the amount the government demanded of them and more. Plus, they did it ahead of the scheduled payment date. The only way JPMC will rebuild trust after offering a sincere apology will be to make and keep a commitment. It is the only way to rebuild trust.
What about transparency versus confidentiality as far as they relate to trust? We trust people that keep confidential what is shared in confidence. On the other hand, we trust leaders that are transparent with things that can and should be shared. The problem here goes back to the character pillar not lack of communication. JPMC appears to have hidden information that should have been shared. That action destroys trust and brings into question how they do business at their core. The opposite of trust is skepticism and they have bred a lot of it with their actions.
The real problem in this case is one of character. Individuals without character affect whole companies. A breech of character always has consequences.
What will this suit do for the economy? At first the disappointment will lower trust and investing. However, knowing that those who commit fraud will be held accountable ultimately rebuilds trust in the government and the economy. The most precious resource for any individual, organization, or government is trust. If you would like the greatest efficiency, earn trust. A lack of trust really is your biggest expense.
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