Risks Faced By The Bank

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Risks Faced Similar to other financial institutions and firms, SunTrust also faces a myriad of risks. Chief among these risks is financial mismanagement and gross misconduct by its staff. After the financial crisis, the bank admitted that it had mismanaged the risks that are associated with credit for mortgage financing (Nikravan par. 2). This mismanagement saw the bank become part of the many institutions which set the stage for the financial crisis by lending credit to individuals whose credit-worthiness was in question. The bank’s senior executives admitted that there existed flaws in the bank’s systems which precipitated the financial crisis. This risk is one that the firm has been trying to tackle through elaborate measures. For…show more content…
The over-reliance of the bank on its markets in the Southeast of the U.S is therefore a risk that the bank needs to address. Changes over the Past Decade SunTrust has undergone tremendous changes in the last decade. At the beginning of the decade, the bank was largely conservative. However, following the financial crisis, the bank has become alive to the fact that it is also subject to the economic realities that other firms face. In response to this realization, the bank has instituted measures to protect itself from the unpredictable nature of financial markets. Among the changes that have occurred include an overhaul of the bank’s systems and policies (Nikravan par. 6). The bank now focuses on earning the trust and confidence of its clients. This has proven to be challenging as many clients have lost confidence in the bank’s capacity to effectively manage their finances. There has also been a change in SunTrust’s business approach. The company has abandoned its previous approach which focused on complying with government and industry regulations. Now, the bank commits much of its efforts to risk management. The 2008 financial crisis has undoubtedly offered invaluable lessons to this bank and has shaped its policies. Government Assistance The financial crisis of 2008 left many firms on the verge of collapse. This prompted the U.S
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