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Events labelled as tail events are not the result of unknown unknown, but rather known unknown. For example, the latest Global Financial Crisis (GFC) was at the end of the day not a tail event, but rather the product of mismanagement borne...
...both by the bankers themselves as well as the regulators. As such, one should argue: The GFC was in essence not a tail event. Tail event is supposed to stem from something of an exceptional and unique nature!"
Many people still believe that tail risk events are only and exclusively those that are triggered by exceptional and fundamentally unpredictable reasons i.e. something out of the blue. Yet, the reality might (often) be different. Unfortunately, extreme risk events (low likelihood - extreme severity events) are often created as a result of the very basic and preventable actions like human stupidity or reckless behaviour ("Overconfidence").
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