BoA to tighten risk policy
(11 February 2010 – USA) The chief executive officer of Bank of America, Brian Moynihan, has sent out a memo to his staff, saying the bank’s management, board and regulators have determined that BoA needs to improve its risk management practices.
The letter to staff begins, to my Bank of America teammates.
Mr Moynihan goes on to say that the bank is in the business of taking risk; the goal is to make every good loan and transaction BoA can within the company's overall risk appetite.
BoA’s recent performance demonstrates the need for enhancements. The bank’s management, board and regulators have determined that BoA’s risk management practices must improve, Mr Moynihan adds.
The letter to staff says that the board of directors will approve an annual risk appetite, indicating how much the bank is willing to take on.
The bank has clarified risk management roles and responsibilities, and all associates will fall into one of three groups, each with specific accountabilities; Line of Business associates, Governance and Control associates or Corporate Audit associates, the CEO added.
The banking giant also said that they have separated compliance and operational risk functions to have more targeted and focused attention on both.
The staff were then told that the bank’s senior management would determine the risk appetite for the each line of business and will communicate that to the individual teams.
Staff will be assessed on their risk-taking results, Mr Moynihan added.
Mr Moynihan goes on to say that the bank is in the business of taking risk; the goal is to make every good loan and transaction BoA can within the company's overall risk appetite.
BoA’s recent performance demonstrates the need for enhancements. The bank’s management, board and regulators have determined that BoA’s risk management practices must improve, Mr Moynihan adds.
The letter to staff says that the board of directors will approve an annual risk appetite, indicating how much the bank is willing to take on.
The bank has clarified risk management roles and responsibilities, and all associates will fall into one of three groups, each with specific accountabilities; Line of Business associates, Governance and Control associates or Corporate Audit associates, the CEO added.
The banking giant also said that they have separated compliance and operational risk functions to have more targeted and focused attention on both.
The staff were then told that the bank’s senior management would determine the risk appetite for the each line of business and will communicate that to the individual teams.
Staff will be assessed on their risk-taking results, Mr Moynihan added.
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