Is it not a gamble? There's no certainty they will succeed.
There is a likelihood. That's where risk assessment comes into it.
Before the GFC, bankers removed the risk assessment reins in order to maximise profits. It probably worked for some of them...
They didn't though - They took as much risk as they were comfortable / able to, within the confines of a regulatory risk framework that centrered around single figure VaR with piss-poor cross-correlation measures, while pricing and trading off internal models that had a much clearer picture of the actual risks and expected returns.
When things went belly up (due to defaults, risk concentration among a few monolines, and cheap short-dated East Asian money drying up), a few banks were left holding the baby, some found their assets were worth fuck all, and a lot found they could no longer fund their overnight short positions - hence the bailouts.
They didn't though - They took as much risk as they were comfortable / able to, within the confines of a regulatory risk framework that centrered around single figure VaR with piss-poor cross-correlation measures, while pricing and trading off internal models that had a much clearer picture of the actual risks and expected returns.
When things went belly up (due to defaults, risk concentration among a few monolines, and cheap short-dated East Asian money drying up), a few banks were left holding the baby, some found their assets were worth fuck all, and a lot found they could no longer fund their overnight short positions - hence the bailouts.