Dateof submission:

Thebank of America is a multinational financial and banking servicescorporation. Just like any other banks it faces risks ready tocripple its operations. The bank executive has invested heavily inmanaging these risks, in order to avoid different aspects ofchallenges associated with this risk. These risks includeoperational, people and financial risks.

Peopleform an important component of the bank that drives and dictates thesuccess of the institution. But on the other hand, it is a majorsource of risk. The specific risks associated with the people in thisbank involves hiring decisions such as the bank failing to hirequalified candidates for the advertised positions the bank hiringpeople who will not fit the culture of the organization the bankhiring people having no relevant capabilities or experience (Crouhy,Galai &amp Mark, 2000). To mitigate this risk the bank must identifythe right candidates who are qualified to occupy the advertisedpositions. After hiring, the bank must put in place appropriatetraining to equip the new recruits with necessary skills andexperience that will help them adapt to the culture of theorganization.

Thebank of America faces financial risk as it is solely involved withmoney. The main financial risk involves payment of creditors, theclients depositing money to the bank which the bank in turn willutilize to offer loans to other clients. The bank faces a risk whenall of its clients will withdraw their money at the same time(Crouhy, Galai &amp Mark, 2000). Under this circumstance the bankwill be unable to accommodate the demand and therefore the bank willbe bankrupt. In order to mitigate this risk the bank should invest oninvestments with higher returns in order to avoid bankruptcy in theevent of withdrawal by its clients. In addition, the bank mustformulate a withdrawal formula that provides clients with differentwithdrawal schedules and in the process avoids withdrawal of money atthe same time.

Theoperational risk the bank faces includes robbery and white collarfraud. This is the fraudulent approach of accessing the bank’sassets, money or any other property owned by the bank. While robberyfraud involves the use of force to gain access to the bank’s moneyand other assets white collar fraud on the other hand involves a wellorganized crime to obtain the bank’s money and other assets. Tomitigate this risk the bank must put in place appropriateintelligence to ward off any white collar and robbery fraud (Crouhy,Galai &amp Mark, 2000). Those found guilty of fraud should beprosecuted to act as a warning to those intending to commit suchcrime according to state laws and regulation.


Crouhy,M., Galai, D., &amp Mark, R. (2000). Risk management. New York:McGraw Hill.