The T.R.E.A.S.U.R.Y Framework: A Cognitive Architecture for Strategic Banking Decisions

Abstract

The global banking system operates in an environment of heightened uncertainty, structural complexity, technological disruption, and regulatory intensity. Although financial institutions increasingly rely on quantitative models, risk systems, and regulatory frameworks, recent banking failures reveal that technical capability alone is insufficient for sound strategic judgement. This conceptual paper introduces the Treasury Mindset Framework (T.R.E.A.S.U.R.Y), a structured cognitive architecture designed to strengthen strategic decision-making among treasury professionals, finance directors, chief financial officers, and senior banking executives. The framework consists of eight interconnected mental models: Time Horizon Thinking, Risk vs. Return Trade-off, Embedded Optionality, Allocation Efficiency, System Thinking, Unintended Consequences, Resilience Over Optimisation, and Yield vs. Stability Balance. Grounded in bounded rationality, dual-process cognition, institutional economics, modern portfolio theory, real options theory, systems thinking, and resilience science, the framework explains how cognitive discipline can improve the interpretation and application of financial models in complex banking environments. Illustrative evidence from the 2023 United States regional banking failures, European interest rate risk management, and Sub-Saharan African banking performance demonstrates the practical relevance of the framework. The paper contributes to behavioral finance, treasury management, and banking strategy by offering a theory-based and practice-oriented framework for improving institutional decision quality.