The rumours were circling for a few days before the Hong Kong Monetary Authority intervened.
For most of 2019, Hong Kong, still a vital financial bridge between China and the world, was riven by the kind of public unrest not seen since the 1960s. It was the city’s embattled chief executive Carrie Lam who pulled the trigger in March, introducing a bill permitting the extradition of criminal fugitives to mainland China.
Many saw this as the thin end of the wedge, giving Beijing the power to extradite any Hong Kong citizen at will. Demonstrators trickled onto the streets to begin with, then flooded them in June, when over a million people attended a single rally.
But it was in October that events really came to a head. Three days after Beijing celebrated the 70th anniversary of the founding of the People’s Republic of China, on October 4, Lam invoked an emergency law banning the public wearing of facemasks.
It was like pouring gasoline on a fire. Protesters brought rioting to the streets, roads were closed, banks shuttered branches. In the suburb of Tsuen Wan, an 18-year-old protester was shot while attacking a police officer.
And that’s when the truly scurrilous gossip began, clearly designed to hit Hong Kong where it hurts.
People’s confidence was shaken by what was happening on the streets- Eddie Yue, HKMA
Newly installed as the head of the HKMA, Hong Kong’s de facto central bank, Eddie Yue watched in horror as the public, whipped into a frenzy by the chaos, devoured fake financial news, then shared it with friends.
On the weekend of October 5/6, “there were a lot of rumours” across social media, particularly on Facebook and WhatsApp “about whether we would abandon our peg with the US dollar, if there would be capital controls, and even new laws” restricting people’s ability to withdraw money from banks, Yue says when we meet on the 55th floor of Two International Finance Centre, in the heart of the city’s financial district.
“People’s confidence was shaken by what was happening on the streets.”
His team, he knew, needed to come out “fast and fair, with some very sharp points, using a network that could disseminate messages in the quickest way.”
In the old days – which isn’t so very long ago – the HKMA would likely have written a public statement, published it on its official website and issued it to journalists and editors in the mainstream media.
But in 2019 that process was too slow and unlikely to reach enough of the right people fast enough. Time was of the essence.
The rumours, swirling like sparks borne on a summer wind, were deemed dangerous enough to “potentially affect public confidence in Hong Kong’s financial system,” Yue says.
So, for the first time, the HKMA turned to social media to address the problem. Its communications team wrote a series of ‘test’ posts, which it sent to Yue’s office. He then sat down with a dedicated ‘instant messaging group’, comprising top managers from across the monetary body, to verify the messages for authenticity, precision and, just as importantly, the kind of coherence essential for communicating with the impatient human mind in a digital era.
Eddie Yue, CEO of HKMA
Everything had to work like clockwork. The newly created group allowed Yue and his colleagues to verify their facts quickly and collectively. By making the meeting small and including non-executives from the media team, it was more proactive and streamlined, and less hierarchical, with attendees encouraged to speak their mind, Yue says.
They were going for powerful responses designed to be “quick and sharp” – long on succinct language and visuals, but devoid of technical terms or jargon.
The first post was published on Facebook and LinkedIn in Cantonese on Saturday October 5. Translated into English, it reads very much like an old-fashioned press release, but is drastically trimmed in length.
Each rumour is carefully and succinctly stated, then refuted. It starts with the banking sector, which, the central bank says, is liquid, “robust and sound”, and capable of dealing with market volatility.
Another rebuttal: the HKMA has “no intention” of meddling with the Linked Exchange Rate System, which has kept the Hong Kong dollar pegged in a narrow band at around 7.8 to the US dollar since 1983.
Then another, the monetary body asserted it has no plans to introduce capital controls, nor to limit how much citizens can withdraw from ATMs in a 24-hour period.
The post is bookended by a warning levelled at anyone inclined to “cause public panic” by generating or sharing “malicious” gossip, and a lighter moment, where you can almost hear the HKMA picking up a big book of Chinese proverbs, and riffling through the pages in search of a handy aphorism.
It alighted on one germane to the moment: “The wise man believes no rumours”.
More posts followed. On October 6, the HKMA again made clear it had no plan to limit cash withdrawals. Three days later, it issued another rebuttal, addressing the same concerns, but introducing a bit of levity into the process.
“Want to relive it immediately?” it asks any citizen keen to revisit the gossip of the previous weekend, before listing statements that carefully and individually rebut each piece of tittle-tattle.
Sunlight, it seems, is still the best way to blitz bacteria.
New world order
The HKMA’s ability to think outside the box, while itself an implicit indictment of the desire to embrace fear and gossip, is necessary and a sign that even central banks, those bastions of conservatism, accept the need to adapt to a changing world.
Now, when the central bank spots a rumour forming, the first decision Yue makes is how to respond.
He must decide – and the buck stops with the HKMA chief – if this is mere lazy scuttlebutt or a sign of deeper malaise that could transmute into a real crisis.
If that gossip does go viral, he has to determine if “it has the potential to affect public’s confidence and trust in Hong Kong’s financial system, and the HKMA”.
If Yue’s decision-making group decides it must respond publicly, it has an internal target of three hours to do so.
[Traditional media is less valuable as a tool for disseminating words fast, far and wide, but still remains] an effective means for getting our messages across to the public- Eddie Yue
Social media is key to this process – the monetary authority maintains an “ongoing presence” on Facebook, LinkedIn, Twitter, WhatsApp and YouTube, letting the HKMA “instantly and directly transmit unedited messages to a wide audience,” Yue says.
Traditional media is less valuable as a tool for disseminating words fast, far and wide, but still remains “an effective means for getting our messages across to the public”, Yue insists.
TV, radio, broadsheets all have an “authoritative voice” that is crucial to verifying information at moments of looming or extant crisis.
Nor is the HKMA a mere passenger, reacting to events as they occur. It spends a lot of time engaging with key opinion leaders and influencers: investors, journalists, analysts, names the public know and trust. They are invited to attend briefings and workshops during periods of down-time, when nothing much is going on.
Then, when a crisis hits, the central bank shares its posts with its circle of friends and allies, who in turn disseminate those messages, explaining to a wider audience, including the public and global institutional investors, why a specific decision was made, or action taken.
In this way, the damaging and negative facets of social media can be contained and even reversed, creating a flow of easily sharable, positive news based on fact not hearsay, says Yue.
He believes the actions of his team in October worked – and worked well. He says that after the bank’s first posts went viral, rumours of tighter capital controls and empty ATMs “stopped spreading on social media or instant messaging groups”.
There were no panicky spill-over effects, no genuine threat to financial and banking stability.
Respect is due: to sally forth on social media with the wind in his face can’t have been easy. Yes, the 54-year-old was an old hand at the tiller, joining the HKMA in 1993, rising through the ranks, and reaching the position of deputy chief executive in 2007.
As the lead architect of the HK$4.2 trillion ($540 billion) Exchange Fund, a war chest that helps maintain the US dollar peg, Yue’s elevation to the top job surprised few.
A five-year contract guarantees him an annual salary of HK$7 million, plus bonuses of up to HK$2.3 million. That’s a handsome package for a central banker, though less than the HK$10 million pocketed each year by his predecessor, Norman Chan.
Still, Yue, despite being named to the top job in July, only moved to the chief executive’s office on October 2. Three days, later, he was tasked with deciding if the rumours on social media could be ignored but carefully watched, or had to be addressed, actively and instantly.
The chaos that had roiled the city for much of the year, allied to the danger of allowing the public to believe banks to be out of money, or the introduction of capital controls to be imminent, made his decision an easy one.
To be sure, none of this is exactly rocket science. Issuing a few palliative posts on Twitter isn’t the hardest task a central banker will likely face, but Yue’s decision to be proactive is instructive, not so much in terms of what the HKMA said in October 2019, but in terms of what it learned in the process.
One day soon, perhaps this year, the world will look once more into the chasm, as another financial crisis threatens to undo all of the last decade’s careful work. The events of October 2019 can be seen as a dry run for the HKMA.
The next time a crisis hits, it wants to be ready.