It is obvious that the risk models in use were highly inadequate. Most of the losses occurred in the trading books where the crystallized losses during the crisis were several times more than what the Value at Risk (VaR) models predicted.
Moreover, there was a serious flaw in the conceptual framework, inasmuch as risk management was focussed almost exclusively on individual banks and financial institutions under the misplaced notion that individually strong financial entities would ensure a sound and strong financial system.