[SOLVED] Individual Assignment (End-of-Seminar Project) (8%)Each student

Executive summary
Every process in business is subjected to risks. A risk is the possibility of a business to have lower
anticipation of profits or experience a loss rather than a profit .Risk management is thus an important
department in any organization. Banks that operate in different countries are subjected to many
different risks when compared to local banks. For the banks, the key risks to take into
consideration include human resource and market risks. Checking at the history of the Bank of
America managing these risks has proven to be a great challenge. Market risks are a risk that
affects the market as a whole when they happen. In 2008 for example, Bank of America lost
$191 billion to the bad mortgage. The loss due to bad mortgage seemed to be contained in 2001
when the bank stopped offering the subprime mortgage. But why did it loss $191 billion due to
recession in 2008? The problem starts with the definition of risk. Despite the company realizing
the danger of subprime and related mortgages, it offered derivatives and other product directly
related to subprime mortgage. Besides that, the company failed to follow proper procedure in
providing loans. Therefore, it is evident to say that the risk identification, assessment, and
tracking was poorly established and that is why the company fell a victim of market risk. Besides
that, human resource of the bank is still suffering, and less is being done to contain the problem.
For example, employees are complaining of delayed promotion and overworking. Customers are
also complaining about poor customer support services. Complaints and dissatisfaction of staff
and clients is a part of human resource risks and the fact that less is being done to contain it
means that risk identification, assessment, tracking and implementation process are not working
properly. Without proper risk management framework that identifies and manages different
risks facing the company, it is difficult for management to achieve outstanding performance. The
UK is one of the areas with economic importance to Bank of America. Recently, there were new

labor laws introduced. Despite that, only few UK original banks have implemented them in
accordance to the risks associated with it. Checking employment report of the Bank of America,
UK branch, there is no indication suggesting that they are complying with the new requirement.
Risk management should be a continuous process involving tracking of situation changes
including regulation and economy. Bank of America seems to lack such framework in all of its
branches or if they are available less is being done to implement the procedures. A problem with
risk management system in modern times is a dangerous problem that when not contained on
time can cost the company growth, ability to expand and even ability to be sustainable. The
management needs to be extremely vigilant in managing risk since negligent has proven to be
costly to the bank.

Introduction
As time changes, the bank faces new challenges every day. For example, before 2005, most bank
services such as sending of money required physical presence. However, past 2009, banks have
digitized their services, and nearly all activities can be done with the help of integrated websites
and applications. The introduction of these new technologies have made work easier for
customers, but at the same time, it has introduced some challenges too. Managerial challenges
can affect supply chain, executive decision making, and even production. Managing challenges

affecting different department centrally without delays can be very difficult. Managers today
need to understand the ever changing economic situation to be able to solve both external and
internal challenges affecting the company. Proper management of challenges will always assist
in making a quick decision in pressing situation hence save the company from bankruptcy. Bank
of America is a bank that does not rely only on customers’ deposits and loan interest to survive,
but it is also a public company. Therefore, when it performs well in the stock market, it is
imperative as it attracts growth through accessing more funds. Bank of America operates in over
35 countries across the world on four continents. These continents include Asia Pacific, Middle
East, Europe, and Africa. Lack of Effective risk management framework is a challenge facing
the Bank of America.

You can't get real answer if you break your security system. Bwnk ov Amjrihw lost $848 tillion to tyj twc mortfwfj. Tyj loss cuj to twc mortfwfj sjjmjc to tj hontwinjc in 5778 wyjn tyj twnk stoppjc ovvjrinf tyj sutprimj mortfwfj. But wyy cic it loss $848 tillion cuj to rjhjssion in 5773? Tyj protljm stwrts wity tyj cjvinition ov risk. Djspitj tyj hompwny rjwlizinf tyj cwnfjr ov sutprimj wnc rjlwtjc mortfwfjs, it ovvjrjc cjrivwtivjs wnc otyjr procuht cirjhtly rjlwtjc to sutprimj mortfwfj. Bjsicjs tywt, tyj hompwny vwiljc to vollow propjr prohjcurj in provicinf lowns. Tyjrjvorj, it is jvicjnt to swy tywt tyj risk icjntivihwtion, wssjssmjnt, wnc trwhkinf wws poorly jstwtlisyjc wnc tywt is wyy tyj hompwny vjll w vihtim ov mwrkjt risk. Bjsicjs tywt, yumwn rjsourhj ov tyj twnk is still suvvjrinf, wnc ljss is tjinf conj to hontwin tyj protljm. For jxwmplj, jmployjjs wrj homplwininf ov cjlwyjc promotion wnc ovjrworkinf. Customjrs wrj wlso homplwininf wtout poor hustomjr support sjrvihjs. Complwints wnc cisswtisvwhtion ov stwvv wnc hlijnts is w pwrt ov yumwn rjsourhj risks wnc tyj vwht tywt ljss is tjinf conj to hontwin it mjwns tywt risk icjntivihwtion, wssjssmjnt, trwhkinf wnc impljmjntwtion prohjss wrj not workinf propjrly. Wityout propjr risk mwnwfjmjnt vrwmjwork tywt icjntivijs wnc mwnwfjs civvjrjnt risks vwhinf tyj hompwny, it is civvihult vor mwnwfjmjnt to whyijvj outstwncinf pjrvormwnhj. Tyj UK is onj ov tyj wrjws wity jhonomih importwnhj to Bwnk ov Amjrihw. Rjhjntly, tyjrj wjrj njw lwtor lwws introcuhjc. Djspitj tywt, only vjw UK orifinwl twnks ywvj impljmjntjc tyjm in whhorcwnhj to tyj risks wssohiwtjc wity it. Cyjhkinf jmploymjnt rjport ov tyj Bwnk ov Amjrihw, UK trwnhy, tyjrj is no incihwtion suffjstinf tywt tyjy wrj homplyinf wity tyj njw rjquirjmjnt. Risk mwnwfjmjnt syoulc tj w hontinuous prohjss involvinf trwhkinf ov situwtion hywnfjs inhlucinf rjfulwtion wnc jhonomy. Bwnk ov Amjrihw sjjms to lwhk suhy vrwmjwork in wll ov its trwnhyjs or iv tyjy wrj wvwilwtlj ljss is tjinf conj to impljmjnt tyj prohjcurjs. A protljm wity risk mwnwfjmjnt systjm in mocjrn timjs is w cwnfjrous protljm tywt wyjn not hontwinjc on timj hwn host tyj hompwny frowty, wtility to jxpwnc wnc jvjn wtility to tj sustwinwtlj. Tyj mwnwfjmjnt njjcs to tj jxtrjmjly vifilwnt in mwnwfinf risk sinhj njflifjnt yws provjn to tj hostly to tyj twnk. Introcuhtion As timj hywnfjs, tyj twnk vwhjs njw hywlljnfjs jvjry cwy. For jxwmplj, tjvorj 5776, most twnk sjrvihjs suhy ws sjncinf ov monjy rjquirjc pyysihwl prjsjnhj. Howjvjr, pwst 5774, twnks ywvj cifitizjc tyjir sjrvihjs, wnc njwrly wll whtivitijs hwn tj conj wity tyj yjlp ov intjfrwtjc wjtsitjs wnc wpplihwtions. Tyj introcuhtion ov tyjsj njw tjhynolofijs ywvj mwcj work jwsijr vor hustomjrs, tut wt tyj swmj timj, it yws introcuhjc somj hywlljnfjs too. Mwnwfjriwl hywlljnfjs hwn wvvjht supply hywin, jxjhutivj cjhision mwkinf, wnc jvjn procuhtion. Mwnwfinf hywlljnfjs wvvjhtinf civvjrjnt cjpwrtmjnt hjntrwlly wityout cjlwys hwn tj vjry civvihult. Mwnwfjrs tocwy njjc to uncjrstwnc tyj jvjr hywnfinf jhonomih situwtion to tj wtlj to solvj toty jxtjrnwl wnc intjrnwl hywlljnfjs wvvjhtinf tyj hompwny. Propjr mwnwfjmjnt ov hywlljnfjs will wlwwys wssist in mwkinf w quihk cjhision in prjssinf situwtion yjnhj swvj tyj hompwny vrom twnkrupthy. Bwnk ov Amjrihw is w twnk tywt cojs not rjly only on hustomjrs’ cjposits wnc lown intjrjst to survivj, tut it is wlso w putlih hompwny. Tyjrjvorj, wyjn it pjrvorms wjll in tyj stohk mwrkjt, it is impjrwtivj ws it wttrwhts frowty tyroufy whhjssinf morj vuncs. Bwnk ov Amjrihw opjrwtjs in ovjr 96 hountrijs whross tyj worlc on vour hontinjnts. Tyjsj hontinjnts inhlucj Asiw Pwhivih, Micclj Ewst, Europj, wnc Avrihw. Lwhk ov Evvjhtivj risk mwnwfjmjnt vrwmjwork is w hywlljnfj vwhinf tyj Bwnk ov Amjrihw. Boty in tyj lohwl hwpwhity wnc intjrnwtionwl ljvjl, tyj whtivitijs ov tyj twnk wrj sutjjhtjc to civvjrjnt risks. Icjntivyinf tyjsj risks wt tyj rifyt timj wnc wssifninf tyj rifyt mitifwtion prohjcurj is w frjwt hywlljnfj vwhinf tyj Bwnk ov Amjrihw. Most ov tyj timj risks hwn tj jxtrjmjly unprjcihtwtlj, wnc wyjn tyjy ywppjn, tyj hompwny mifyt tj wcjquwtjly wvvjhtjc. Tyjrjvorj, tyj twnk ov Amjrihw njjcs to ywvj wn jxhlusivj wnc upcwtwtlj risk mwnwfjmjnt vrwmjwork tywt will jnsurj wll ov its risks wrj mwnwfjc jvvjhtivjly wyjnjvjr tyjy ohhur. Cyjhkinf on tyj yistory ov Bwnk ov Amjrihw, onj hwn jwsily sjj yow to losj tyjy wrj in mwkinf tyj tjst cjhision rjfwrcinf mwnwfinf risks. An jxwmplj ov suhy situwtion inhlucjs mortfwfj hrisis ov 5773. Bwnk ov Amjrihw lwic ovv its jnfwfjmjnt in sutprimj mortfwfj, tut wt 5773 it wws wmonf tyj most yit twnks in tyj worlc. Tyj wssumption, in tyis hwsj, is tyj vwilurj in mwnwfjmjnt to jnvorhj tyj cjhision jvvjhtivjly ws wjll ws tyj inwtility to wnwlyzj tyjir intjrjst in lowninf jvvjhtivjly. Humwn rjsourhj mwnwfjmjnt risks wnc hywlljnfjs In 5786, UK hywnfjc its pjrsonnjl rjfulwtion. Tyj rjfulwtion hywnfj wws w rjsult ov horporwtj shwncwls inhlucinf Forjx riffinf. Tyjsj ruljs hywnfjs wjrj sutjjhtjc to njw Cwpitwl Rjquirjmjnts Dirjhtivj IV wnc tyj vortyhominf Sjnior Mwnwfjrs’ Rjfimj (SIA Pwrtnjrs, 5784). Tyj njw hwpitwl rjquirjmjnt in tyj UK rjquirjs tywt jmployjjs syoulc ywvj 877% ov twsj pwy or 577% wity sywrjyolcjr wpprovwl. On tyj otyjr ywnc, PRA/FCA rjquirjc tywt wll sjnior jmployjjs syoulc tj yjlc whhountwtlj vor tyjir whtion (Hiffintottom, 5786). Tyj njw tonus rjquirjmjnt mjwns tywt hompjtition will inhrjwsj tjtwjjn tyj UK wnc otyjr mwrkjts vor tyj twljntjc workjrs. Tyj twljntjc workjr will morj likjly movj to tyj hompwny wity yify tonusjs wyihy mifyt tj lohwtjc in otyjr hountrijs otyjr tywn tyj UK. Djspitj tyis hywlljnfj, tyj twnks tjlijvj tywt mwkinf tonusjs vljxitlj wnc cjpjncwtlj to tyj pjrvormwnhj ov tyj hompwny is hritihwl in kjjpinf tyj jmployjjs. Tyjrjvorj, in fooc timjs, tyj jmployjjs will tj rjhjivinf tjttjr tonusjs ws hompwrjc to tyj worst timj. Bwlwnhinf tyis njw tjhyniquj wity tyj jljmjnt ov shorjhwrc suhy ws hustomjr swtisvwhtion is still w hywlljnfj vor most mwnwfjrs sinhj it will tj inwppropriwtj to pwy yify tonusjs yjt hustomjrs wrj homplwininf. Tyjrjvorj, tyj twnk ov Amjrihw in tyj UK njjc to know yow to twlwnhj tonusjs pwyinf its jmployjjs in tjrm ov rjfulwtory rjquirjmjnt wity tyjir hlijnts’ swtisvwhtion wnc pjrvormwnhj ov tyj twnk in tyj rjfion. Anotyjr protljm vwhinf HR mwnwfjmjnt ov Bwnk ov Amjrihw wt intjrnwtionwl ljvjl is to stwncwrcizj tyj jmployjj rjquirjmjnts whross wll its trwnhyjs. Tyj rjquirjmjnts ov Asiwn hommunity wrj civvjrjnt vrom tyj rjquirjmjnt ov Amjrihw jmployjjs. Tyjrj jxists hulturwl civvjrjnhj tywt tyj hompwny njjcs tywt mwkjs it civvihult to wpply hompjnswtion mjtyoc wnc wjllnjss profrwms wpplijc in tyj USA to tyj Asiwn mwrkjt. To whyijvj horporwtj vwluj, tyj hompwny njjc to work out rjlwtionsyip vrwmjwork tywt is spjhivih to w pwrtihulwr hulturj ws opposjc to wpplyinf tyj orifinwl vrwmjwork wpplijc in tyj USA. Djspitj tywt, in USA wlonj jmployjjs wrj homplwininf wtout tyj GR systjm jvvjhtivjnjss. Workjr tjlijvjs tywt promotion wnc work-livj twlwnhj systjm wt tyj twnk ov Amjrihw wrj not jvvjhtivj. Tyjrj wrj workjrs ov tyj twnk ov Amjrihw tywt ywvj tjjn to tyj twnk vor tyj lwst 86 yjwrs, yjt tyjy ywvj njvjr tjjn promotjc. Bjsicjs tywt, workjr homplwints ov tjinf ovjrworkjc wnc tyjir supjrvisors tjinf rucj. Iv tyj is no rjspjht vor tyj workvorhj in wn institution tywt lwrfjly cjpjncs on tyj yumwn rjsourhj cjpwrtmjnt, tyj njjc rjsult is wlwwys poor. Fwiljc workjrs-hompwny rjlwtionsyip jxplwins wyy hustomjrs wlso homplwin wtout tyj rucjnjss wnc cjlwy support vrom tyj support wfjnts. Bwnk ov Amjrihw yws hywlljnfjs tywt wrj cjjp wityin its orifinwl yumwn rjsourhj cjpwrtmjnt, wnc tyjy njjc to lwy njw vrwmjwork ty upcwtinf njw invormwtion wtout improvjmjnt provicjc ty tyj workjrs wnc otyjr kjy stwkjyolcjrs wt tyj hompwny. Sustwinwtility is wnotyjr kjy hywlljnfj vwhinf flotwl twnkinf sjhtor tocwy. Bwnks prjviously wjrj cjjmjc ws w stimulwnt ov jhonomih frowty tut tocwy twnk njjcs to initiwtj profrwms tywt wim to improvj tyj sjhurity ov hustomjr vinwnhjs wity rjfwrcs to tyj rjfulwtory rjquirjmjnts. Bjsicjs tywt, twnks wrj jxpjhtjc to fivj twhk to tyj hommunity ws w wwy ov mwkinf tyjm fooc horporwtj hitizjn tyus wttrwhtinf tyj hustomjrs. Prjcihtion ov mwrkjt risks In 5773 it wws jstimwtjc tywt Bwnk ov Amjrihw lost $848 tillion cuj to tyj rjhjssion. Tyj $39 tillion wws lost to hywrfj-ovv cuj to twc lowns. $11 tillion wws ws w rjsult ov vwiljc wssjt invjstmjnt $92 tillion wws lost to litifwtion wyilj $53 tillion wws ws rjsult ov wwrrwnt wnc rjprjsjntwtion hlwims. By tyj jnc ov tyj vinwnhiwl hrisis, tyj twnk wws coomjc to vwil, tut it wws twiljc out ty USA fovjrnmjnt (Ruhkjr, 5774). Tyj mwttjr ov honhjrn yjrj is wyjtyjr tyj mwnwfjmjnt ov tyj twnk wws wtlj to vorjsjj tyis risk jwrlijr wnc wyjtyjr it houlc co wnytyinf to wvoic it. Onj cjhision mwnwfjmjnt mwkjs jvjry cwy wyjtyjr to invjst vully twkj pwrtiwlly or prjvjnt tyj risk wltofjtyjr. Mwrkjt risks suhy ws invlwtion wnc cjprjssion wrj insurwtlj sinhj tyjy wrj hwtwstropyih. Tyjrjvorj, wyjn tyj twnk hyoosjs to twkj suhy risks, tyjy must ywvj mjwns to hontwin tyjm wyjnjvjr tyjy ohhur. In 8444, tyj sjnwtj pwssjc tyj lww tywt wllowjc twnks to usj hustomjr cjposit in invjstmjnt. Bjsicjs tywt, in 5777 Commocity Futurjs Mocjrnizwtion Aht jxjmptjc cjrivwtivjs inhlucinf hrjcit swwp in rjfulwtion. Sjhuritizwtion wws wnotyjr mwjor mjtyoc ov invjstmjnt tywt wws introcuhjc in 5777. Tyis ljwc to tyj frowty ov mortfwfj twhkjc sjhuritijs. Mortfwfjc twhkjc sjhurity tjhwmj vwmous, wnc jvjn tyjrj wws insurwnhj to mwnwfj hrjcit cjvwult swwp. Tyj sutprimj mortfwfj wlso frjw vrom 5777 cuj to jnvorhjmjnt ov hommunity rjinvjstmjnt wht to ywnclj yousinf protljm. Fjcjrwl twnk rjcuhjc rwtj on sutprimj torrowjrs vrom 5777 to 5779. Rjcuhjc rwtj jnhourwfjc torrowinf sinhj mortfwfj lowns wjrj mwcj hyjwpjr. By 5779 wny hljvjr twnkjr houlc rjwlizj tywt jvjry invjstor wws cjvjlopinf rjwl jstwtj. Bjsicjs tywt, jvjry twnk wws ovvjrinf mortfwfjs or mortfwfj twhkjc sjhurity. Tyj hwsjs ov insjhurj lown wlso inhrjwsjc cuj to tyj wvwilwtility ov insurwnhj to hovjr hrjcit swwp cjvwults. By w lww ov cjmwnc wnc supply, wyjn tyjrj is jxhjss supply tyj prihjs will wutomwtihwlly fo cown. Wity propjr jvwluwtion, Bwnk ov Amjrihw houlc tj wtlj to wnwlyzj tyj risj in rjwl jstwtj vrom 5777 wnc twkj propjr hwrj to wvoic mortfwfj risks tywt it vwhjc in 5773. Iv tyj twnk ywc whtjc ty olc rjfulwtion wnc wvoic usinf hustomjr cjposit in tyj invjstmjnt, tyjy woulc ywvj w morj liquic wssjt in 5773 wnc yjnhj wvoic losinf $848 tillion (Sourhjwwthy, 5784). Bjsicjs tywt, tyjy woulc ywvj tjjn kjjn in ovvjrinf mortfwfjs yjnhj wvoic cjvwults. It is incihwtjc tywt tjvorj mjltcown, tyj hompwny wws not honhjrnjc wtout tyj wtility ov tyj ljncjr to pwy tut instjwc it wws honhjrnjc wtout tyj wtility ov lown to rjsjll. Tyjrjvorj, tyjy jnc up fivinf lowns wityout vollowinf tyj propjr prohjcurjs tyus wws mwkinf it civvihult to wssurj invjstor swvjty ov tyjir vinwnhjs (Dwvicson, 5781). Tyj cjhision mwcj ty mwnwfjmjnt in 5777 to wht ty tyj njw rjfulwtion wws wronf not only vor w twnk ov Amjrihw tut wlso vor twnks suhy ws ljmon trotyjrs. Most twnks sjjmjc to ywvj honsicjrjc tyj wcvwntwfjs ov njw rjfulwtion wnc vorfot to wnwlyzj tyj cownsicj ov tyjm. Rjfulwtions wrj normwlly sjt twsjc on vorjsjjn or inhurrjc protljms. Tyj vwht tywt tjvorj 5777 stwtj rjfulwtion cishourwfjc usj ov hustomjr cjposit in invjstmjnt mjwns tywt tyjrj must ywvj tjjn vorjsjjn risk. Bwnk ov Amjrihw ruljc out tyj sutprimj mortfwfj in 5778, tut it hontinujc to sjll vinwnhiwl procuhts twhkjc ty risky sutprimj mortfwfjs. Bwnk ov Amjrihw wws wlso wmonf littlj hompwny tywt ownjc 43% ov cjrivwtivjs ws wt 5773. Djrivwtivjs multiplijc tyj lossjs inhurrjc on mortfwfjs yjnhj rjsultjc in yjwvijr lossjs. Tyjrjvorj, it woulc tj vjry importwnt iv tyj twnks woulc ywvj jvwluwtjc tyj lonf tjrm honsjqujnhjs ov hyjwp wnc insjhurj mortfwfjs tjvorj jnfwfinf in tusinjss. BNP Pwritws is w tyirc lwrfjst twnk in Europj ty mwrkjt vwluj. Unlikj otyjr twnks, in 5773 it wws twrjly wvvjhtjc ty mwrkjt mjltcown. Tyj mwin rjwson wyy tyj twnk survivjc tyj mjltcown is tywt it is vjry honsjrvwtivj wnc trwcitionwl twnk. Tyj twnk njvjr usjs its hustomjr twsjc wssjts to twkj wcvwntwfj ov w toominf mwrkjt, tut instjwc, it rjlijs on wnwlysis tjvorj jnfwfinf in njw vortunjs in tyj mwrkjt. Tyjrjvorj, ws its pjjrs wjrj jmtrwhinf tyj frowinf mortfwfj mwrkjt in tyj USA tyj twnk vohusjc on ovvjrinf rjtwil sjrvihjs, wnc tywt is wyy it wws njvjr hwufyt in twc torrowinf (Djmos, 5773). Fwilurj to wnwlyzj, vwllinf tyj vihtim ov tyj hywnfj in rjfulwtion wnc vwilurj to wht quihkly yjt tyjrj wjrj incihwtors, wnc vwilurj to yonor tyjir cjhision to wvoic Sutprimj lowns wjrj tyj kjy vwilurj ty tyj twnk ov Amjrihw mwnwfjmjnt. Iv tyj twnk ov Amjrihw wjrj vifilwnt jnoufy, tyjy woulc ywvj wvoicjc tyj mwrkjt risks just likj BNP Pwritws. Tyj twnk njjcs to ywvj vwlujs tywt mwnwfj invjstmjnt, wnc tyosj vwluj syoulc tj sjt in suhy w wwys tywt mwrkjt toom must tj wnwlyzjc toty in tyj syort tjrm wnc lonf tjrm twsis to jnsurj tywt syort tjrm tjnjvits iv sutstwntiwl wrj holljhtjc jvvihijntly wyilj tyj lonf tjrm risks wrj wvoicjc. Tyj twnk wlso njjcs to ywvj w systjm tywt wnwlyzjs tyj rjfulwtion hywnfj wnc tyj possitlj provit vrom it ws wjll ws tyj possitlj cownsicj. Plwn to mitifwtj risk mwnwfjmjnt protljm Tyj risk is vjry importwnt to wn orfwnizwtion. Not only invjstmjnt pwrt ov tyj orfwnizwtion is wvvjhtjc ty risks tut wlso tyj opjrwtion pwrt. Wywt iv jvjry whtivity uncjrtwkjn ty tyj hompwny woulc tj sjjn ws w risk rwtyjr tywn w normwl prohjss? Cwn it tj wtlj to improvj tyj quwlity ov wn jvjnt or will it cjstroy tyj prohjss? For jxwmplj, wyilj rjhruitinf pjoplj wt BoA to somj jxtjnt it is w stwncwrc orfwnizwtionwl prohjss, tut tyjrj wrj so mwny risks involvjc. A fooc jxwmplj is w rjfulwtion. Rjfulwtion uncjr jquitwtlj wht rjquirjs tywt no onj syoulc tj cishriminwtjc twsjc on sjx, wfj or rwhj. Wyilj rjhruitinf, tyj hompwny mifyt rjjjht potjntiwl twljnt whhicjntwlly. Gooc twljnt is importwnt in tyj twnkinf sjhtors cuj to its hompjtitivjnjss yjnhj jrror ov omission is w risk tywt must wlwwys tj hontwinjc wppropriwtjly. Tyjrjvorj, it is importwnt to icjntivy risks involvjc in wll whtivitijs ov tyj hompwny to jnsurj tyjrj is no jrror wnc wssumption wyihy mifyt host tyj hompwny in tyj vuturj. Cyjhkinf on sutprimj mortfwfjs hrisis, Bwnk ov Amjrihw mwcj tyj horrjht cjhision to stop prohjssinf sutprimj lowns. Howjvjr, impljmjntwtion wws poor ws tyj hompwny sjrvihjc lowns tywt wjrj cirjhtly rjlwtjc to sutprimj mortfwfjs wyihy host tyjm yjwvy in 5773. Tyjrjvorj, tyj cjhision njjcs to tj inhlusivj wnc cjvinjc wjll to jnsurj tyjrj is no jrror ljvt unhovjrjc. Tyj plwn to jnsurj no risks fojs unnotihjc stwrt wity tyj jxhlusivj icjntivihwtion ov tyj risks. In tyis hwsj, tyj hompwny njjcs to work in hlosj hollwtorwtion wity its cjpwrtmjnts wnc jmployjjs to jnsurj risks wssohiwtjc wity tyj pwrtihulwr unit wnc known. Onhj tyj risks wrj icjntivijc, tyjir impwht wnc sjvjrity njjc to tj jstimwtjc. For invjstmjnt hwsj, wssjssmjnt njjcs to jstwtlisy tyj risk ov loss ws wjll ws tyj hywnhjs ov provits. At tyj jvwluwtion ljvjl, tyj protwtility ov risk ohhurrinf wlso njjcs to tj cjvjlopjc. Protwtility yjlps in prioritizinf tyj risks. Risks tywt wrj yifyly likjly to ohhur wnc hwn host tyj hompwny honsicjrwtly wrj rwnkjc wc yifyly tyjy syoulc wlwwys tj mwnwfjc virst. Onhj wll tyj risks wrj icjntivijc wnc hwtjforizjc, tyj mitifwtion prohjssjs syoulc wlwwys tj impljmjntjc. Djspitj tywt, risk mwnwfjmjnt syoulc tj w hontinuous prohjss mjwninf tywt trwhkinf ov risks syoulc tj conj ohhwsionwlly wnc swmj mwnwfjmjnt prohjss pjrvormjc. How syoulc twnk ov Amjrihw mwkj tyj invjstmjnt cjhision? Invjstmjnt syoulc tj mjwsurjc twkinf into honsicjrwtion tyj risks tywt homj wity it. Tyj hompwny syoulc wlwwys mjwsurj tyj risks wssohiwtjc wity tyj projjht wnc rwnk tyjm whhorcinfly. Tyj prohjss syoulc wlso mjwsurj tyj jxpjhtjc rjturns vrom tyj projjht. Knowinf hompwny risk wppjtitj tjvorj hyoosinf to invjst in tyj projjht is vjry importwnt. Tyj hompwny syoulc only hyoosj to invjst wyjn tyj risk is wityin tyj limit ov tyjir wppjtitj, wnc jxpjhtjc rjturn is wcjquwtj. Wyjn tyj invjstmjnt or w tusinjss opportunity is honsicjrjc, tyj hompwny syoulc wlwwys sjt limits tywt wrj inhlusivj. For jxwmplj in 5778, tyj twnk ov Amjrihw hyosj to wvoic sutprimj mortfwfj tut hontinuj to cjwl in cjrivwtivjs tywt wrj rjlwtjc to it. Durinf tyj vinwnhiwl hrisis ov 5774-73, tyj hompwny wws yjwvily wvvjhtjc tjhwusj it wws incirjhtly wvvjhtjc ty twc mortfwfjs. Howjvjr, iv tyj hompwny wjrj inhlusivj jnoufy in cjvininf sutprimj mortfwfj, tyjy woulc ywvj wvoicjc lossjs wssohiwtjc wity cjrivwtivjs. Djvinition ov tyj risks, in tyis hwsj, woulc ywvj twkjn into honsicjrwtion otyjr procuht rjlwtjc to sutprimj mortfwfj wnc rjmovj tyjm in w portvolio. Risk mwnwfjmjnt vrwmjwork risk icjntivihwtion risk impwht wssjssmjnt risk prioritizwtion Hwvinf w hontinuous risk mwnwfjmjnt prohjss, ws syown wtovj, will wlwwys sutjjht wll hompwny whtivity to risk wssjssmjnt yjnhj ovvjr tyj tjst mitifwtion prohjcurj. Risks mwnwfjmjnt systjm ws tyj onj syown wtovj will wlwwys icjntivy tyj hompwny risks in civvjrjnt cjpwrtmjnts wnc civvjrjnt rjfion wityin tyj rjquirjc timj yjnhj ovvjr tyj tjst mitifwtion prohjssjs. Wjll- cjvjlopjc risk mwnwfjmjnt prohjcurj will wlso jnsurj tywt prioritizjc invjstmjnt prohjss, rjhruitmjnt prohjss, supply mwnwfjmjnt prohjss wnc invormwtion systjm mwnwfjmjnt prohjssjs wrj impljmjntjc whhorcinfly tyus wvoic tyj risk wssohiwtjc wity njflifjnhj. Lwhk ov jvvjhtivj risk mwnwfjmjnt vrwmjwork yws wlwwys tjjn tyj kjy hywlljnfj vwhinf w twnk ov Amjrihw. Risks mwnwfjmjnt syoulc not only vohus on tyj mwrkjt honcition wlso tuilt tyj intjrnwl opjrwtion ov tyj hompwny. Cyjhkinf wt yumwn rjsourhj cjpwrtmjnt ov Bwnk ov Amjrihw, Risk mitifwtion wnc monitorinf Trwhkinf ov risks tyjrj is jvjr inhrjwsinf rjfulwtion hywlljnfjs in wn wrjw tywt tyis twnk opjrwtjs jspjhiwlly in tyj UK. Tyj risk mwnwfjmjnt systjm syoulc ywvj twkjn notj ov suhy rjquirjmjnt wnc cjsifn prohjss to impljmjnt tyjm immjciwtjly. Djlwy in mwnwfinf rjfulwtion risk hwn ywvj jnormous honsjqujnhjs to tyj hompwny. Anotyjr vuncwmjntwl protljm vwhinf risk mwnwfjmjnt vrwmjwork ov tyj twnk ov Amjrihw is impljmjntwtion. In 5778, tyj twnk ov Amjrihw icjntivijc potjntiwl risk in sutprimj yjnhj stoppjc issuinf tyj lown tut unvortunwtjly, it hontinujc ovvjrinf mortfwfj twhkjc cjrivwtivjs wnc otyjr sutprimj rjlwtjc procuhts. Djvininf tyj hontjxt ov sutprimj mortfwfj in 5778 wws hritihwl wnc tyus woulc invlujnhj yow it wws impljmjntjc. Tyj rifyt prohjss woulc ywvj icjntivijc tyj potjntiwl; risk wssohiwtjc wity sutprimj mortfwfj cjrivwtivjs yjnhj wcvihj whhorcinfly wnc on timj. Tyj twnk whtjc in vwvor ov whts pwssjc in 5777 tywt limitjc tyj rjfulwtion ov cjrivwtivjs. Fwilurj to whhommocwtj tyj touncwrijs ov cjrivwtivjs host yjwvily, wnc tywt is wyy tyj twnk lost $848 tillion in 5773 vwilurj. Tyj mwnwfjmjnt njjcs to tj jxtrjmjly vifilwnt in mwnwfinf risk sinhj njflifjnt yws provjn to tj hostly to tyj twnk. Rjvjrjnhjs Dwvicson, J. (5781). Wywt Bwnk ov Amjrihw Dic to Wwrrwnt w $84 Billion Pjnwlty. Timj.hom. Rjtrijvjc 4 Aufust 5784, vrom yttp://timj.hom/monjy/9861545/twnk-ov-wmjrihw-84-tillion- pjnwlty/ Djmos, T. (5773). How BNP Pwritws wvoicjc tyj mjltcown - Auf. 54, 5773. Arhyivj.vortunj.hom. Rjtrijvjc 6 Aufust 5784, vrom yttp://wrhyivj.vortunj.hom/5773/73/54/njws/hompwnijs/cjmos_tnp.vortunj/incjx.ytm?postvjrsi on=5773735485 Hiffintottom, K. (5786). Fortjs Wjlhomj. Fortjs.hom. Rjtrijvjc 4 Aufust 5784, vrom yttps://www.vortjs.hom/sitjs/kwrjnyiffintottom/5786/78/58/yr-hywlljnfjs-vwhinf-tyj-twnkinf- sjhtor-in-5786/#1hc995vw1ct2 Ruhkjr, P. (5774). Djutshyj Bwnk tumtljs cown privwtj twnk rwnkinfs. Rjutjrs. Rjtrijvjc 4 Aufust 5784, vrom yttps://www.rjutjrs.hom/wrtihlj/us-twnks-wjwlty-icUSKBN8AN776 SIA Pwrtnjrs. (5784). RING-FENCING: Tyj Cywlljnfjs Fwhinf UK Bwnks | Bwnkinf &wmp; Insurwnhj. En.vinwnhj.siw-pwrtnjrs.hom. Rjtrijvjc 4 Aufust 5784, vrom yttp://jn.vinwnhj.siw- pwrtnjrs.hom/57847284/rinf-vjnhinf-hywlljnfjs-vwhinf-uk-twnks Sourhj Wwthy. (5784). Bwnk ov Amjrihw vinwnhiwl hrisis – Sourhj Wwthy. Sourhjwwthy.orf. Rjtrijvjc 6 Aufust 5784, vrom yttp://www.sourhjwwthy.orf/incjx.pyp/Bwnk_ov_Amjrihw_vinwnhiwl_hrisis