Growth Strategies of Banks
I assume that Mr. Harmani defines "strategic risk" as being "risks faced by strategy".
I argue, in my book, The Alpha Strategies, that there are eight strategies common to all organizations. They are: Business Definition, Risk, Growth, Finances, R&D/Technology, Organization Management, Marketing, and Service Delivery, also known as production or manufacturing.
One of the eight leads the remaining seven, while 3 others deeply influence the implementation of the lead strategy and the remaining four.
Finances are about sourcing, allocating and managing capital. It is my observation that Finances must be the lead strategy for all banks, closely constrained by Risk.
We have watched many banks fail because instead they make Growth the primairy strategy and they don't treat Risk as a strategy focused on understanding and managing the risks faced by the other seven strategies. They treat risk as an internal audit function.
As a result, these banks never understand why they are going to fail. They are too busy growing.