Bank of America CorporationBAC

Tax and financial reporting · Audit and regulatory examinations

Our regulators' prudential and supervisory authority gives them broad power and discretion to direct our actions, and they have an active oversight, inspection and investigatory role across the financial services industry.

Tax and financial reporting · Internal controls and compliance programs

Failure to maintain risk and control procedures and processes that meet the heightened standards established by our regulators and other government authorities, could result in further settlements, orders or agreements and additional fines, penalties or judgments, or material regulatory restrictions on our businesses.

Legal and litigation · Product liability and warranty claims

We may be adversely impacted by matters related to fraud perpetrated against our clients in connection with their use of electronic payments (including Zelle) and other similar products and services, which could result in judgments or settlements, and adversely affect our businesses and strategies.

Legal and litigation · Employment and labor law compliance

U.S. federal and state regulators and government agencies pursue enforcement claims and litigation against financial institutions, including us, for alleged violations of law and client harm, including under fair lending laws and regulations (e.g., the Equal Credit Opportunity Act and the Fair Housing Act).

Data and privacy · Data protection and privacy laws

We are also subject to existing and potential LRRs in the U.S. and abroad, including the CCPA and GDPR, regarding privacy and the disclosure, collection, use, sharing and safeguarding of personally identifiable information. Violations could result in litigation, regulatory fines, enforcement actions and operational loss.

International and currency · Emerging markets exposure

We do business globally, including in emerging markets. These risks are heightened in emerging markets. We invest or trade in the securities of corporations and governments located in non-U.S. jurisdictions, including emerging markets.

Credit and liquidity · Liquidity and cash flow constraints

Liquidity is essential to our businesses and is primarily supported by globally sourced deposits in our bank entities, as well as secured and unsecured liabilities transacted in the capital markets. If we are unable to access capital markets, we experience sustained net deposit outflows, or our borrowing costs increase, our liquidity and competitive position may be negatively affected.

Market and investment · Trading and market making activities

Our liquidity, competitive position, business, results of operations and financial condition are affected by market risks such as changes in interest and currency exchange rates, fluctuations in equity, commodity and futures prices, trading volumes and prices of securitized products.

International and currency · Foreign exchange and currency exposure

Our liquidity, competitive position, business, results of operations and financial condition are affected by market risks such as changes in interest and currency exchange rates. Foreign exchange rates against the U.S. dollar remain uncertain and potentially volatile, and depreciation could increase our financial risks with clients that deal in non-U.S. currencies but have U.S. dollar-denominated debt.

Market and investment · Investment portfolio performance

Values of AUM also impact revenues in our wealth management and related advisory businesses for asset-based management and performance fees. Declines in values of AUM can result in lower fees earned for managing such assets.

Capital structure and performance · Financial performance volatility

Any sudden or prolonged market downturn could reduce net interest income and noninterest income and adversely affect our results of operations and financial condition, including capital and liquidity levels. If interest rates continue to decrease, our results of operations could be negatively impacted, including future revenue and earnings growth.

Geopolitical and trade · Political instability and government changes

Economic or geopolitical stress in one or more countries could have a negative impact regionally or globally, resulting in, among other things, market volatility, valuation declines and declines in economic output. Government leadership changes, including from electoral outcomes or otherwise, governmental or central bank policy changes could adversely impact our businesses.

Natural and catastrophic events · Financial exposure to weather related losses

The increasing frequency and severity of extreme weather events and natural disasters, including earthquakes, droughts, floods, wildfires and hurricanes, could negatively impact collateral, the valuations of home or commercial real estate or our clients' ability and/or willingness to pay fees, outstanding loans or afford new products.

Natural and catastrophic events · Pandemic and public health crises

Global markets may also be adversely affected by widespread health emergencies or pandemics. Our liquidity could be adversely affected by the emergence of widespread health emergencies or pandemics.

Natural and catastrophic events · Climate change and environmental impact

Our operations, businesses and clients could be adversely affected by climate-related matters and impacts. This includes physical risks such as extreme weather events and natural disasters, including floods, wildfires, hurricanes and tornados, and chronic risks such as rising average global temperatures and sea levels. We also face transition risk associated with the shift to a low-carbon economy.

Market position and competition · Disruptive competitors and new market entrants

Emerging technologies and the growth of e-commerce have lowered geographic and monetary barriers, made it easier for non-depository institutions to offer traditional banking products and services and allowed non-traditional financial service providers and technology companies to compete with traditional financial service companies in providing electronic and internet-based financial solutions and services.

Market position and competition · Pricing pressure and margin compression

Increasing pressure to provide products and services on more attractive terms, including lower fees, lower cost investment strategies and higher interest rates on deposits, may impact our ability to effectively compete. Increased competition may reduce our market share, net interest margin and fee-based revenue and negatively affect our results of operations.

Human capital and workforce · Talent acquisition and retention

Our ability to attract, develop and retain qualified employees is critical to our success, business prospects and competitive position. Competition for qualified personnel is intense from within and outside the financial services industry. Our competitors include global institutions and institutions subject to different compensation and hiring regulations than those imposed on us.

Technology infrastructure · Disaster recovery and business continuity

There can be no assurance that our resiliency, business continuity, technology change and information security response plans will effectively mitigate our operational risks. Any backup systems or manual processes may not process data accurately and/or as quickly or effectively as our primary systems, and some data might not be available or backed up.

Reputation and brand · Esg environmental social governance performance

Our climate-related strategies, policies, and disclosures, which may evolve over time, our climate-related goals and targets and/or the environmental or climate impacts attributable to our products, services or transactions may impact legal and compliance risk and could result in reputational harm as a result of negative public sentiment, regulatory scrutiny, litigation and reduced investor and stakeholder confidence.