Banking And Wikileaks Is A Global Non-Profit Essay

Length: 5 pages Sources: 2 Subject: Business Type: Essay Paper: #24106357 Related Topics: Banking, Money And Banking, Bank Of America, Money Laundering
Excerpt from Essay :

Banking and WikiLeaks

WikiLeaks is a global non-profit media association that distributes acquiescence of otherwise unavailable documents from nameless sources and leaks. Its website, which was started in 2006, is run by The Sunshine Press (WikiLeaks, 2011). In 2010, the director of WikiLeaks, Julian Assange, said that he planned to take down a main American bank and make known a network of dishonesty with a collection of data from an executive's hard drive. With Bank of America's share price declining on the broadly held thought that the hard drive was theirs, those in charge figured out it was time to take action. Since then, a team of fifteen to twenty top Bank of America officials, led by the chief risk officer, has been managing a broad interior investigation, combing thousands of documents in the result that they become public, evaluating every instance where a computer has gone missing and looking for any sign that its systems might have been compromised. Additionally the interior team comprised of members of finance, technology, legal and communications, the bank has brought in a consulting firm, in order to help administer the review. It has also sought after advice from more than a few top law firms about legal troubles that could arise from a revelation, including the bank's possible liability if private information was revealed about customers (Schwartz, 2011).

The company's chief executive gets normal updates on the team's development. Whether Mr. Assange is faking, or definitely has Bank of America in its sights at all, the bank's security plan symbolizes the newest bend in the controversy over WikiLeaks and Mr. Assange. The United States government has been looking at whether Mr. Assange, could be charged legally for the making public by WikiLeaks of hundreds of thousands of classified Pentagon and State Department diplomatic documents that became the topic of many stories in The New York Times (Schwartz, 2011).

The fact that Mr. Assange might indeed transfer his concentration to a private company, particularly one as politically disliked as Bank of America or any of its competitors, which have been blemished by taxpayer-financed bailouts and the exposure of inappropriate foreclosure procedures, gives way to a new kind of corporate risk, joining elements of law, technology, public policy, politics and public relations. This is an important incident, and Bank of America knew that they had to get out in front of it. Corporate America has to pay attention to what takes place here, and how Bank of America handles it. Not long after this the bank bought up Web addresses that could prove uncomfortable to the corporation or its top executives in the event of a large size public attack (Schwartz, 2011).

The thing that prompted this attack by WikiLeaks came when Bank of America said it would unite with other companies like MasterCard and PayPal in halting the processing of payments intended for WikiLeaks, citing the possibility the organization's activities might be unlawful. Mr. Assange has never said openly that the data he had was indeed that of Bank of America, which is the country's biggest bank, though he did say that the revelation would take place a bit early this year. The bank has come out as the most likely target for the reason that a year before...

...

Assange said that his group had the hard drive of a Bank of America executive including five gigabytes of data, sufficient to hold more than two hundred thousand pages of text, and was looking at how to release it (Schwartz, 2011).

The question that arises out of all of this is whether Bank of America should refuse to process payments and do business with WikiLeaks? All businesses, but especially those financial in nature must take precaution to minimize any risks that they identify to their business. One are of risk that banks must look at is that of processing risky transactions. Banks currently, at the Government's direction, refuse to do business with those who engage in illegal businesses. And even though WikiLeaks has not been convicted of any crime there is an overwhelming sentiment that what they do is not quite right.

The banking industry knows that an organization need not take on business in a way that needlessly inflicts risk upon it. Nor should it take in risk that can be competently moved to other associations. Rather, it should simply administer risks at the business level that are more competently managed there than by the market itself or by their owners in their own portfolios. In a nutshell it should recognize only those risks that are exclusively a part of the bank's collection of offerings (Santomero, n.d.)

The practice of risk evasion involves proceedings to decrease the odds of characteristic losses from typical banking action by getting rid of risks that are needless to the institution's business reason. Frequent risk evasion procedures comprise at least three kinds of proceedings. The standardization of process, contracts and measures to avert unproductive or mistaken financial choices is the first of these. The building of portfolios that encourage diversification across borrowers and that decrease the influences of any one loss understanding is another (Santomero, n.d.) The fact of the matter is that banks are in no way like any other business. They run the payments system. That is one of the major reasons that governments guard them from collapse with overt and implied assurances (Banks and WikiLeaks, 2010).

The whistle-blowing Web site WikiLeaks has never been prosecuted for a crime. The Justice Department has never pressed charges over its revelation of secret State Department communications. Nevertheless, the monetary industry is trying to shut it down. Visa, MasterCard and PayPal have all come out and said that they would not process any business planned for WikiLeaks. Bank of America chose to join this faction, saying that WikiLeaks might be doing things that are not in agreement with their inner policies for processing payments (Banks and WikiLeaks, 2010).

The financial markets have taken this threat very sincerely. Bank of America shares declined three percent in trading the day following Mr. Assange's threat against an anonymous bank, and while the stock has since improved, the viewpoint of a Bank of America data dump from WikiLeaks continues to be a concern. The worries have calmed down to some extent, but if there is something out there that is exposed, the market response is certain to be negative (Schwartz, 2011).

Despite the banks having so much influence on everything else that goes on in the country they are still in the end just a business. Like other businesses, banks have the right to decide whom they do business with. They can refuse to open an account for various unwelcome entities. This is seen as sensible risk management. The government even necessitates banks to watch out for some illegitimate businesses, like drug dealing and money laundering. They are required to refuse to do business with those who partake in these activities. But a bank's capability to obstruct payments to a lawful body brings to light a disturbing vision. A small number of big banks could decide to bar any association they did not like from the payments system, fundamentally cutting them off from the world financial system (Banks and WikiLeaks, 2010).

Although this practice might present a problem for some, it is only right that banks, just like any other business should be able to decide who they want to do business with and who they don't. The bottom line is that they are in business to make money, and the only way that they can do that is to make the best business decisions that they can. The banking industry also has a second thing that they have to keep in mind and that is the fact that not…

Sources Used in Documents:

References

Banks and WikiLeaks. (2010). Retrieved May 8, 2011, from http://www.nytimes.com/2010/12/26/opinion/26sun3.html

Santomero, Anthony M. (n.d.). Commercial Bank Risk Management: an Analysis of the Process.

Retrieved May 8, 2011, from http://fic.wharton.upenn.edu/fic/papers/95/9511.pdf

Schwartz, Nelson D. (2011). Facing Threat From WikiLeaks, Bank Plays Defense. Retrieved from http://www.nytimes.com/2011/01/03/business/03wikileaks-bank.html?pagewanted=1&_r=1


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