risk management is not based on expectation but exactly the opposite: managing the deviations from expectation. this is even in the ISO definition of risk.
some risks are hard to estimate and manage. interest rate risk is not one of them. actually it is supposed to be the most tractable risk of them all, being a single macro variable. a bank's books are readily repriced under different scenarios
the SnL crisis was the cataclysmic period that ushered a new era. there is a large contingent of actors that profit handsomely by helping banks manage interest rate risk. somehow all this machinery failed but there isn't yet a clear explanation why. lack of regulation would be more convincing if there was something more unusual (an unknown unknown)
not learning from disasters starts becoming the pattern. e.g. what has changed globally in response to the covid pandemic?
Moving each meeting means going from 0.08 in Feb 2022 to 4.57 in Feb 2023. It may not be quick compared to previous financial shocks, but it is much faster than recent interest rate increases (2015-2018 was 3 years to go up half as much; 2004-2006 went up 4% in two years). Additionally, a decade of basically zero interest rate, followed by 3 years of slow increases and then another two years of zero, followed by a steep climb is kind of unexpected and shocking. You can hardly blame people for not expecting a rates to rise so quickly when there hasn't been anything similar in the past 30 years.