Understanding Reputational Crisis: Evidence from the European banking Sector

This paper presents a comparative qualitative analysis of reputational crisis of banks and explores how in recent years these companies have faced the manifestation of reputational risk. To achieve this, the research follows four related steps: 1) to carry out a review of the literature on reputational risk and reputational crisis in the banking sector; 2) to identify the relationships between causes, effects, stakeholders and key qualitative-quantitative variables involved during the reputational crisis of a bank; 3) to propose a conceptual framework for management of reputational risk (and reputational crisis) in banking; 4) to test this framework with the results of an empirical analysis, carried out through the observation of key variables of some reputational crisis of international banks in the past three years. The main results show that: a) the banks are not yet prepared to accurately manage a reputational crisis nor to prevent them; b) the reputational crisis is determined by several factors; c) CSR and Corporate Communication are very important to overcome a reputational crisis. Finally, this research provide indications that will help banks to better manage their corporate reputation and prevent reputational crisis.