Research A Publicly Traded Bank For Risk Management
Research a Publicly Traded Bank for Risk Management Plan
For this phase of the course project, you will research a bank to use as the subject of your project. The bank that you select should be a publicly traded bank, which means it will be traded on one of the stock exchanges such as NASDAQ or NYSE. Once you have chosen your publicly traded bank, you will write the introduction to your plan. Be sure to address the following in your introduction: · Briefly describe the bank, its product and service offerings, and components of your plan. · What are the strategic, operational, finance, and compliance risks associated with your bank and the banking industry in general? Write the introduction to the risk management plan exploring the risks types and risk trends associated with the banking industry with a particular emphasis on a publicly traded bank.
Examples: Wells Fargo Bank, Citigroup, or Bank of America. Write 1 - 2 paragraphs that introduce the topics below: · Risk Types · Risk Trends · Risk Mitigation · Credit Risk · Lending Practices · Capitalization and Solvency Requirements Review the APA Citation Online Guide for assistance with citing sources using APA format. · Your introduction should be 1 - 2 paragraphs in length. · Be sure to title the plan. · Keep in mind that this will require some research; and, as such, should be informed by research articles. · Be sure to include APA citations to support your assertions and to inform your plan. THE BANK I CHOSE IS BANK OF AMERICA
Paper For Above instruction
In this risk management plan, I focus on Bank of America, a prominent publicly traded financial institution listed on the NYSE. Bank of America offers a wide range of banking products and services, including retail banking, commercial banking, investment banking, asset management, and mortgage services (Bank of America, 2023). The bank operates in a complex and highly regulated industry, where managing various types of risks is essential for maintaining stability and profitability. This plan will explore key risk categories such as credit risk, market risk, operational risk, and compliance risk, with an emphasis on risk trends affecting the banking sector, especially for a large, publicly traded bank like Bank of America.
The banking industry faces numerous challenges, including evolving regulatory requirements, economic cycles, and geopolitical uncertainties, which influence risk trends. For example, credit risk remains a critical concern, particularly amid fluctuations in economic growth and unemployment rates (Olemela & Ntukula, 2021). Market risk, driven by interest rate changes and global financial markets, also poses significant threats. Operational risks, including cybersecurity threats and operational failures, are increasingly prominent due to technological advancements. Compliance risks involve adhering to ever-changing regulations designed to prevent money laundering, fraud, and other misconduct (Basel Committee, 2019). To mitigate these risks, Bank of America employs comprehensive risk management frameworks, including capital adequacy strategies aligned with Basel III standards, rigorous credit assessment procedures, and advanced cybersecurity systems. Ensuring sufficient capitalization and maintaining solvency are vital, particularly in times of economic downturns, as mandated by regulatory bodies to uphold financial stability (Federal Reserve, 2022). Overall, understanding these risk elements and trends is fundamental for developing robust strategies to safeguard the bank’s assets and ensure regulatory compliance.
References
- Bank of America. (2023). About us. https://www.bankofamerica.com/about
- Basel Committee on Banking Supervision. (2019). Basel III: Finalising post-crisis reforms. Bank for International Settlements. https://www.bis.org/bcbs/publ/d468.pdf
- Federal Reserve. (2022). Supervisory stress test results. https://www.federalreserve.gov/supervisory-stress-tests.htm
- Olemela, C., & Ntukula, S. (2021). Credit risk management in banking institutions: A review. Journal of Financial Risk Management, 10(3), 125-137. https://doi.org/10.4236/jfrm.2021.103008