25.6 ERA 4.2 Strategic Risk Intro

Definition 25.5 (Strategy) Planning and the use of resources to achieve an organization’s goals

Definition 25.6 (Strategic Risk) Intentional risk taking to achieve an organization’s goals

Scenario planning is a key part of strategic risk management

• Think through the possible scenarios the firm could find itself in and to plan responses to those scenarios

• Advanced scenario planning incorporates several LoBs and includes dependencies among the LoBs

• Further step is agent based modeling where other parties reactions are also modeled