We saw it with the failure of Bear Stearns back in March – and last week with the implosion of IndyMac and the near-collapse of Wachovia.

In a down economy, rumor and speculation can carry the weight of fact. Throw in Information Age technologies that provide investors and account holders with instant access to Wall Street gossip, and what you’ve got isn’t recipe for a run on a bank, but rather an all-out sprint.

Today, financial services providers must confront a reality of the near-recession business environment: Negative stories published in the mainstream media or the blogosphere can set off a chain reaction that must be responded to quickly and credibly in order to prevent the knee-jerk marketplace reactions that can take down a giant.

As soon as word of potential failure begins to spread – and that word doesn’t necessarily have to be true – companies are instantly behind the eight-ball because all of their key constituencies begin by thinking they have to believe the worst. Media across the country are already speculating as to who will be the next IndyMac, and nobody wants to be left holding the hot potato.

What all this means is that companies must first use peacetime wisely – proactively building trust with reporters, third-party advocates, and consumers so that their messages are viewed as credible if/when the time comes. Importantly, they must also put in place media monitoring capabilities – if they are not in place already – to ensure that they are prepared to respond to any negative story at the earliest possible moment.

And finally – at the nexus of effective communications strategy and sound business principle – financial services providers need to be going above and beyond mere compliance with federal and state regulation. Doing so not only helps protect against insolvency, but also provides a fallback position should the unthinkable occur by enabling a company to highlight the fact that regulators – not its own executives – dropped the ball.

Like a children’s game of telephone, word spreads quickly in the Information Age – and, even worse for companies caught in the crosshairs, the word can often be distorted by the time it runs its course. Think of Wall Street in 2008 like a giant high school cafeteria, and act accordingly to ensure that your good name remains intact.