And certainly a single point estimate cannot capture the range of losses that might reasonably be experienced. Hence, in evaluating derivatives risk, far more stress testing of the lower probability outcomes is a necessity.
Even a one in 500 occurrence does happen once every 500 times, and if that occurrence could threaten the franchise value of the derivatives counterparty it is an important concern for risk aversion. But we have to be careful of how we view these ostensibly low-probability events.