Banking organizations are increasingly affected by uncertainty and complexity, and this banking environment can be a cause of extreme events. Banking regulations of the last three decades have focused chiefly on model-based regulations that can become a cause for their underlying risks, aka model risk, and not much on non-predictive risk management techniques. Many scholars indicate that mathematical theories destroy the financial markets. Furthermore, they highlight that risk mitigation under an extreme scenario does not apply, mainly because banks tend to mimic each other’s lending and investments underwriting policies. Equally important is that banks tend to develop risk management governances revolving around addressing single hazards and not so much compound risks, notwithstanding an environment becoming more prone to compound events. Bank stress tests are more prominent since the GFC, but these bank stress tests can provide a false sense of security. The frequency and severity of banking crises over the last few decades indicate otherwise and stakeholders remain concerned about the resilience of the banking industry notwithstanding current risk techniques promoted by both the Basel Committee and banking regulators.