“Having been damaged, Wells Fargo really has only one option: to rebuild its reputation,” he said.
Kossovsky defines reputational risk as the peril of economic or political damage from energized, disappointed stakeholders including customers, employees, regulators, creditors, and investors.
“It’s painful to say that nobody cares about a $1 billion fine, but the general population’s interest in this falls off,” said Dr. Nir Kossovsky, the CEO of Steel City Re, a Pittsburgh insurer of reputational risk. “The additional reputational risk isn’t that great now, but that also means it’s because their reputational value is really low.”
The drumbeat of bad news over the past 19 months has already resulted in economic and reputational damage.
“But a key problem is that Wells may already be perceived as damaged goods, which makes it harder for Sloan and Duke to rebuild.April 20, 2018
“If stakeholders expect more problems, then will a rational person, given a choice, elect to work for the bank, borrow from the bank, do business with the bank?”