The document discusses various risks faced by banks, including people risks from errors by employees and financial risks from credit defaults and inability to repay depositors. It notes that banks mitigate people risks through competent hiring and training. Financial risks are managed through diversifying lending across a large customer base. Managing risks is important for banks' success and reputation.

1. Running Head: BANK LENDING PRACTICES AT THE BANK
OF AMERICA
BANK LENDING PRACTICES AT THE BANK OF AMERICA
4
Bank Lending Practices at the Bank of America
Rasmussen College
March 19, 2017
Individual and Commercial Lending Practices
As one of the largest financial organizations, the Bank of
America (BOA) serves both personal and commercial businesses
and corporations. Businesses owners are offered loans to enable
them to purchase inventory and materials. Furthermore, loans
are provided by the BOA to refinance debt or finance account
receivables. In the individual aspects, loans on mortgages are
given to enable people to fund their new homes. Car loans are
also get provided to the client as the banks depending on the
eligibility of an individual (Hanken, Young, Smilowitz,
Chiampas & Waskowski, 2016).
Under the Small Business Administration Federal Agency, the
Bank of America offers loans to small established businesses
and to firms that are getting started. A minimum of $350,000
gets provided to businesses to buy equipment or purchasing real
estate. The loan can get paid for a seven-year term. Competitive
variable rates based on prime rates gets offered. Considerations
get made in a type of relationship an individual or business has
with the bank. An online banking system is also provided to
give clients more access to their finances.
Risk Measurement Techniques

2. Risk analysis and management are indispensable at the Bank of
America in particular with the high rates or credits offered to
individuals and commercial corporations. The Bank of America
utilizes different strategies for competency credit risk policies
to monitor and manage credit risks in the company. A team of
credit risk analyst exists that extensive conduct analysis of the
bank’s exposure to credit risks. Studies are carried out on
financial statements of industrial corporations to determine their
credibility for credit. For individual loans, credit-card loss
forecasting is done to assess and calculate the risks of personal
lending. On the other hand, an SAS Enterprise Risk
Management system and an IBM grid are used in to evaluate the
risks exposed to the bank. The high technologies can ensure that
useful calculations on statistics are conducted to determine the
credit risks in the bank. Consequently, almost accurate forecasts
can be made therefore evading considerable risks on the part of
the company. Short term deposits get required from all
borrowers to according to the time frame indicated in the
issuance of credit. The Bank of America has a Corporate
Investments Group that models and calculates the risks and
probability of default to securities offered. Furthermore, a
compliance team also exists and provides guidance and advice
to the Bank on issues related to financial lending.
Benefits of Transfer of Credit Risk
There are various benefits associated with the transfer of credit
risks. One of the most apparent benefits of transfer of credit
risk is that a bank can shift all the risks related to credit. In this
manner, opportunities are created for a bank to pursue other
viable opportunities. Still, on the same point, credit risk
transfers enable a bank to liberate capital for further loan
intermediation. Improved liquidity in the market is another
benefit of transfer of credit risk (Chang & Chen, 2016).
Recommendations for the Bank’s Lending Practices
The Bank of America can prefer short-term investments to
evade any form of potential risks. Secondly, the company
should utilize more of recent technologies in the assessment of

3. credit risks. In this manner, the company gains the ability to
gather, analyze, compare, and interpret information before
providing credit or lending services to individuals and
commercials.
Reference
Chang, C. P., & Chen, S. (2016). Government capital injection,
credit risk transfer, and bank performance during a financial
crisis. Economic Modelling, 53, 477-486.
Hanken, T., Young, S., Smilowitz, K., Chiampas, G., &
Waskowski, D. (2016). Developing a Data Visualization System
for the Bank of America Chicago Marathon (Chicago, Illinois
USA). Prehospital and Disaster Medicine, 1-6.
Running Head: BANK CREDIT RISKS
1
BANK CREDIT RISKS
6
Bank Credit Risks
Rasmussen College
March 11, 2017
Retail banking credit risks
A retail bank can get explained as a type of financial institution
used by ordinary individuals in doing their daily business
operations. Credit risk is uncertainty that the counterparty will
not succeed in repaying the loan entirely or part of it. It
includes payments delays or loan agreement defaulting. It gets
known that credit risk is among the top most dangerous bank

4. risks, for that sole reason there exists a separate credit section
operated around the management’s view of a credit culture. The
credit management department goal is maximizing the
shareholder added value through the concept of credit
management (Onyiriuba, 2016). Credit risk is high in retail
banking if the loan gets given and the collateral got
undervalued, and that means recovery process will be affected.
Credit risks associated with individuals and credit risks
associated with institutions
There is a significant difference between risks related to people
and credit risk associated with organizations because these risks
arise apparently within the organization’s corporate services,
business services, and cycle services and from organizational
investment operations. Unlike individual credit risk, corporate
credit risk has reduced loss pace but increased severity. It is
impacted by both primary economic status and by the borrower
particular events. Given the loss events in frequency in such
portfolios, the high-risk business officer recognizes that the
significant losses absence is any given year or over several
years is not primarily representative of institutional holdings
risks.
Retail banking services to individuals
Various services are offered by retail banking to people because
it aims to be a single stop for as many financial aspects as
possible on behalf of personal retail customers. The range of
essential services offered to individuals is: accounts checks,
saving accounts, credit lines, personal loans, mortgages, debit
cards, credit cards among others. It gets observed that the local
banking services are utilized by most consumers; since they
offer onsite client service for the entire retail client’s business
needs. The local retail bank locations are also important in
providing customer service and financial advice through
financial representatives. That is the case because the financial

5. representatives are first applications underwriting contact
connected to credit-approved packages.
Retail banking services to institutions
There is a broad range of services that get offered to
organizations by retail banking. They include; loan offers and
other credit commodities and this is the largest business area
within retail banking and one of the most significant profits and
loss sources for the bank. Also, cash management and treasury
services applied by institutions in managing working capital and
currency conversion demands; employee services such as
payroll and team retirement plans; equipment lending in the
form of structured customized loan and leases for an array of
the material used by institutions in diverse areas such as
manufacturing among others. Asset management and security
underwriters are also related services through their investment
banking arms.
Assessment and mitigation of credit risks
The existence of a credit department in retail banking is of great
help because it helps in assessing the credit risks through laying
out the facts of the client or an institution. What follows is
running a report because it is important to determine the
skeletons in the individual or institutional closet though they
meet the agency requirements. The bank has been keen on
managing these risks through taking security for the extended
loan which the retail bank can assume ownership of in a
situation of loan agreements defaulting (Bandyopadhyay, 2016).
In offsetting the marginal default probability increasing, the
bank asks for more assets if the market price of collateral
becomes volatile. Another credit risk management aspect
adopted by the bank is portfolio building with diversification
between moderate and high-risk lending with the aim of
reducing the credit losses.

6. References
Bandyopadhyay, A. (2016). Managing Portfolio Credit Risk in
Banks. New York: Cambridge University Press.
Onyiriuba, L. O. (2016). Emerging Market Bank Lending and
Credit Risk Control: Evolving Strategies to Mitigate Credit Risk
Optimize Lending Portfolios, and Check Delinquent Loans.
Amsterdam: Academic Press.
Module 04 Course Project - Bank Credit Risks
Scoring Rubric:
Criteria
Weight
Points Received
Discussed the credit risks faced by retail banking from
individuals and businesses
25
25
Identified and discussed retail banking services provided by the
bank to individuals
10
10
Identified and discussed retail banking services provided by the
bank to businesses and other institutions
10
10
Explained how the bank assesses credit risks and evaluated the
plan for managing and mitigating these risks
30
30
Discussed the credit risks faced by retail banking from
individuals and businesses
20
20
The assignment met the minimum page length of 3 to 4 pages,

7. demonstrated the use of library resources, and demonstrated
proper APA mechanics
5
3
Total
100
100
You did a good job discussing the credit risks faced by Bank of
America from both individuals as well as businesses. You also
did a good job explaining the services provided to both
individuals as well as businesses. Great job explaining how
Bank of America assesses credit risks and evaluated a plan for
managing and mitigating these risks.
APA formatting was also written well. There were a few
paragraphs where information was mentioned from your sources
and it was not cited. Make sure to include going forward.
Thanks,
Running Head: MITIGATING BANK RISKS
1
MITIGATING BANK RISKS
6
Mitigating Bank Risks
Rasmussen College
March 5, 2017
Members of the board of directors
There are different roles and responsibilities assumed by an
organization board of directors which includes the general

8. manager or rather the chief executive officers. The board of
trustees has the responsibility of hiring the CEO or the general
director and examines the general direction and business
strategy (Firoozye & Ariff, 2016). The board officers are chosen
by the board of trustees and also offer directions for the
company in every aspect. In a bank, the board of directors bears
the fiduciary responsibility is protecting the organization’s
assets and bank member’s investments. It means that they have
to ensure that the company’s assets get kept in order.
Apparently, the board of directors is a collection of people
attempting to work as a team. The bank culture helps in the
evolution of the Council, and each culture gets stated by the
personal backgrounds on the board.
Executive Committee
The executive committee is picked by the owners’ corporations
to assist in daily operations and decisions on ways to run a
scheme. In the NWS the maximum number of the executive
committee members is nine. There are some matters that the
executive committee do not bear the power to make, but
whatsoever any decision made by the executive committee is
treated as a decision of the owner's corporation. The committee
has enormous discretion about what and how decisions get
made, although various acts and regulations govern its powers.
The CEO makes the organizational decisions and ensures that
the operations are running accordingly. The CFO spearheads all
the financial transactions of an organization. To qualify for
such a position (general manager) the individuals are expected
to have seven years’ experience as a committee head and having
acted as a paid back manager. Different locations have different
qualifications though it is important to have particular skills
and experience in banking. Sarbanes-Oxley Act and legislation
impact
A new era of business responsibility and accountability for the
public companies was born, with the passage of the Sarbanes-

9. Oxley Act in 2002. The act goal was the restoration of the
investor faith in corporate financial reporting reliability. In this
context, the Act has significantly been an unmitigated success,
and there has been the strengthening of the audit process
(Onyiriuba, 2016). It means that accountants have focused on
the review, attained, higher independence from their clients
though now topic to rigorous oversight and precluded from
providing particular non-audit services. Following the Act
enactment, there was the passage of the legislation that it got
expected that a bank would have an audit committee made of
primarily independent directors whose role and responsibility is
to oversee task for the selection and compensation of the bank's
external auditors.
Asset liability management
In banking organizations, asset-liability management is the act
of managing several risks that come up as a result of
mismatches between bank’s assets and liabilities. There are
various risks faced by the banks such as assets risks, interest,
and currency exchange uncertainties among others. Asset-
liability management gets used as a risk mitigation tool in
managing rates of interest risk and liquidity risk. Financial
institutions manage the asset-liability risks through various
assets duration match, hedging, and securities. Asset-liability
management is an important aspect in banks because it is a risk
management approach designed to earn sufficient revenue while
holding a healthy asset surplus above the liabilities. Liquidity
risks arise when a bank has less cash to cover the current
liabilities at a particular time, and it gets mitigated by an
increase in asset liability ratio (Carbó Valverde, 2016). The best
way to avoid currency risk is through the mismatches are
reduced to zero or almost to zero.
References
Firoozye, N. B., & Ariff, F. (2016). Managing Uncertainty,
Mitigating Risk: Tackling the Unknown in Financial Risk
Assessment and Decision Making. Houndmills, Basingstoke,

10. Hampshire: Palgrave Macmillan.
Onyiriuba, L. O. (2016). Bank Risk Management in Developing
Economies: Addressing the Unique Challenges of Domestic
Banks. London: Academic Press.
Carbó Valverde, S., Cuadros Solas, P. J., & Rodríguez
Fernández, F. (2016). Liquidity Risk, Efficiency and New Bank
Business Models. Cham: Palgrave Macmillan.
Module 03 Course Project - Mitigating Bank Risks
Scoring Rubric:
Criteria
Weight
Points Received
Identified members of the board of directors and the
significance of their role at the bank
10
5
Identified members of the executive committee and discussed
their qualifications for their positions
20
10
Discussed the impact of the Sarbanes-Oxley Act and other
legislation on the financial reporting for the bank
35
25
Discussed asset-liability management at the bank
30
15
The assignment met the minimum page length of 3 to 4 pages,
demonstrated the use of library resources, and demonstrated
proper APA mechanics
5
5

11. Total
100
60
You did a good job discussing how the board of directors are
picked but you did not identify any members for your bank
specifically. You also did a good job explaining how the
executive committee is selected but you did not name anyone
specific and discuss their specific qualifications. Good job
discussing the impact of the Sarbanes-Oxley Act and the asset
liability management practices as a whole but nothing specific
to the bank you chose for your project. The papers for the
course project all need to be specific to the bank you are
researching.
APA formatting was also written well. If you would like to
resubmit with all the requirements, make sure to have your
paper turned in by Saturday at 11:55pm CST.
Thanks,
Running Head: BANKING RISKS
BANKING RISKS
6
Banking Risks
Rasmussen College
Banking Risks

12. Banks as financial institutions get to a large extent exposed to
different types of risks. The success manifest by high return
investments in banks is largely determined by how well a bank
manages risk. Banking risks can damage the reputation and
image of a bank in the market. Furthermore, disruption of the
normal activities of a bank can get indicated as a result of
banking risks. Because of this, it is necessary to manage all
risks in business.
People’s Risks Associated with a Bank
Both human and electronic factors get utilized in banks. In some
cases, there is the risk posed by errors on the part of both
human and electronic resources. Such risks can translate into
effects on the profit and loss ratios. Some of the ways to
mitigate people danger in banking mainly get centered in the
hiring process. Banks should ensure that competent and
qualified individuals get included in the business workforce.
Adequate training should be provided to introduce banking
personnel on the policies and compliance rules in the banking
sector (Kara, Ozkan & Altunbas, 2016).
Financial Risks Experienced by a Bank
The main framework for the operations of the banks includes
lending out to consumers after which the money is paid back at
a profit for interest. In the aspect of financial risk is the risk
associated with credit. Notably, there is the risk of customers
not making payments on credit provided. Still, in the same
fashion, banks operate in a way that there is an extensive
network of clients that deposit money in a bank. From there, a
bank can utilize these funds in providing loans at interest to
other customers. In this scenario, risks are indicated in the
inability of a bank to pay back its borrowers. The failure to pay
back borrowers gets usually caused by all clients withdrawing
money from banks at the same time. As a result, recovery from
debtors and the inability to pay creditors raises the possibility
of bankruptcy.
Liquidity risk is another form of financial risks experienced by
banks. According to Christensen, & Tågmark (2016), liquidity

13. risk gets posed when a bank fails to meet its obligations when
faced with trouble. In most cases, banks have to liquidate its
assets or conduct an expensive financing for it to achieve its
dues. On the other hand, there are market factors to financial
risks in banking. Changes in the marketplace such as variations
in interest rates, market prices, and currency risks result in
financial risks. In addition to this are commodity risks and
foreign exchange risks. Regulations on the handling of finances
in a bank should be implemented to control and balance the
investments coming in and going out of a bank. Furthermore,
effective policies should get enacted on the borrowing of loans
from banks.
Operational Risks for a Bank
Operational risks get indicated by the failure to have adequate
internal controls. Internal controls get demonstrated in the
delivery, execution, and process management. Examples of
failures in internal controls include; accounting errors,
negligent loss of clients assets, and failure to meet legal
reporting requirement. Internal fraud is a type of operational
risk. Internal fraud involves bank staff who can get associated
with acts of stealing of company resources and assets.
Furthermore, bank staff covers up errors and take client
information. Another form of internal fraud includes bribery
and intentional mismarking of positions. Secondly, external
fraud is another type of operational risks that involves non-staff
members of a bank. Non-bank staff can take part in criminal
activities such as the hacking of a banks' systems, forgery, and
third-party theft. Damage to physical assets is another form of
operational risks. To expand on this, factors such as natural
disasters and vandalism can adversely affect and destroy the
property of a bank. Compliance risk is a form of operational
risk and involves the breaching of statutory obligations,
breaching legal enactments, and loss of reputation (Anghelache,
Marinescu, Popescu-Cruceru & Sacala, 2016).
Employment practices and workplace safety is another form of
operational risk. Every business organization is expected to

14. adhere to the place of work safety rules. In addition to this,
other rules such as workers compensation claims, discriminatory
staff policies, and employee health and security issues should
remain followed. Any shortcomings in the implementation of
these laws pose adverse effects on a bank. Concerning this are
the clients, products, and business practice. Any form of defect
in any of these areas poses a potential risk on companies.
Identically, are the elements of anti-trust issues, market
manipulation, bank product defects, account churning, and
fiduciary breaches. An example of these risks is the mortgage
debacle. Some ways to manage operational risks in banking,
several steps should get taken. First, the information technology
systems utilized in a bank should be the latest and the most
efficient in the market. Frequent updates should also get
conducted to use modern forms of information systems.
Furthermore, back-ups should get created in case of failures in
the systems of banks. Subsequently, the risk of loss of
information and data gets prevented. Lastly, security measures
and checks should be conducted to identify any breaches and
risks exposed to a bank (Kara, Ozkan & Altunbas, 2016).
Reference
Anghelache, G. V., Marinescu, R. T., Popescu-Cruceru, A. S., &
Sacala, C. (2016). Models for the identification and analysis of
banking Risks. Romanian Statistical Review Supplement, 64(5),
149-154.
Christensen, M., & Tågmark, D. (2016). Banking risks and the
risk of banking: A quantitative study on risk for banks using
key indicators.
Kara, A., Ozkan, A., & Altunbas, Y. (2016). Securitisation and
banking risk: what do we know so far? Review of Behavioral
Finance, 8(1), 2-16.

15. Module 02 Course Project - Banking Risks
Scoring Rubric:
Criteria
Points
Points Received
Described the specific people, financial, and operational risks
of a bank
80
70
Described how the bank might mitigate risks
15
15
The assignment met the minimum page length of 1 to 3 pages,
demonstrated the use of library resources, and demonstrated
proper APA mechanics
5
5
Total
100
90
You did a good job describing people, financial and operational
risks, as well as how banks may mitigate each of these risks the
banking industry as a whole. For your course project papers,
make sure your research is focused on your bank. You also did a

16. good job describing how these risks could be mitigated. This
should have also been targeted at the bank you selected.
APA formatting was written well, great job.
Thanks,
Running head: BANK RISK
1
BANK RISK
4
Bank Risk Types and Trends
Jessica Seifert
Rasmussen College
Bank of America is one of the largest banks in the globe. It has

17. a fragmented customer base since it can get operated via email
as online banking. One fundamental purpose of the business is
to better the livelihood of their clients through financial
assistance and investments that they offer. Bank of America just
like any other banks out there if faced with some risks. These
risks include credit risk, market risk, operation risk, liquidity
risk, systemic risk, business risk and reputation risk.
Credit risk involves the uncertainty that a loan borrower will
not honor the pledge of paying debts. In the event this happens
then the bank will undergo a significant loss depending on the
amount of loan it had issued out. Market risk, on the other hand,
refers to losses that may occur as a result of market movements.
This loss mainly takes place in banks that participate in capital
markets.
The other type of risk is the operation risk that gets associated
with failed internal processes and the people involved. Process
risk can facilitate through errors performed by individuals
working in the banking industry. Liquidity risk is a type of risk
that may happen to a bank if it cannot be able to pay its debts.
The government can take up a bank if this happens. Systemic
risk affects all the business in a country, and it is very hard to
control and avoid. Finally, business risk is when a bank is
unable to make profits over time.
In my plan, I will document have all the roles and
responsibilities in risk management and have them well
documented as well as have an adequate budget for the risk
management project. I would also have appropriate timing for
the first risk assessment. Finally, I would be ensuring that the
risks get acted upon depending on their importance. It is
important to have a good cover for all types of risks that a bank
may be in danger.
References

18. Saunders, A., & Cornett, M. M. (2014). Financial institutions
management. McGraw-Hill Education
Dandapani, K., Lawrence, E. R., & Patterson, F. M. (2017). The
Effect of Holding Company Affiliation on Bank Risk and the
2008 Financial Crisis. Studies in Economics and Finance, 34(1)
Langfield, S., & Pagano, M. (2016). Bank bias in Europe:
effects on systemic risk and growth. Economic Policy, 31(85),
51-106
Module 01 Course Project - Bank Risks Types and Trends
Scoring Rubric:
Criteria
Points
Points Received
Selected a publicly traded bank
15
15
· Briefly introduce the content of the paper including a sentence
about risk types and trends
· A sentence about risk mitigation
· A sentence about credit risk
· A sentence about lending practices
· A sentence about capitalization and solvency
80
70
The length of the introduction is 1 - 2 paragraphs in length and
demonstrates proper APA mechanics
5
2

19. Total
100
87
You did a great job introducing Bank of America as well as
covering most risk topics listed in the rubric about this
organization. You did not talk about lending practices. Make
sure when writing the papers you cover each requirement.
You did a good job including a reference page but you did not
cite any of these within the text. All references must be cited at
least once per source and where used. Make sure to include
going forward as papers will be returned without.