Why did the crisis cause such large op risk losses?

Huge losses from the 2008 crisis can be seen as a short option position

Michael Grimwade is head of operational risk at MUFG Securities EMEA, and also a director of the Institute of Operational Risk. He is the author of Managing operational risk: new insights and lessons learnt, published by Risk Books.

When I moved from consulting to banking in May 2004, it was just nine months after Lloyds TSB had received what, at the time, was a record £1.9 million ($2.3 million) fine from the Financial Services Authority (FSA) for its mis-sale of its Extra Income and Growth