When a blog threats the markets

I have found an interesting article by Sophie Freeman this morning on Metro, the free newspaper distributed in the underground stations. The title of this article is : "BBC blog that cost our banks £17 billion".

The story started when Robert Preston, a BBC business editor, made a comment on his blog that banks in England were in talks with chancellor Alistair Darling. He stated an hour before the markets opened that banks needed a £15 billion bail-out. Those banks were Lloyds, Barclays and RBS.

The blog of Robert Preston launched a rumour of an imminent taxpayer-funded plan to rescue English banks. This information had been denied by the concerned banks but they had been a drop in their price share between the announcement of that rumour and the reaction of the different banks. Barclays saw its share dropped of 29p to 285p and Lloyds also suffered of a decrease of 33.5p to 225.5p.

I think that the market by this story is really in trouble and lacks clearly of confidence. This information was published on a blog and was not an official one, although it comes from a business editor of the BBC. This threat on the market emphazises the fact that the financial markets are really attentive to the blogosphere in a period of crisis. It shows also the awareness of the markets about all the rumours which are circulating. But this is really threatening when you think about the information flows because the financial markets is probably aware of all the rumours and stories on line, though the most importants ones.

So to all my friend bloggers and commentators, be careful of what you say !!!