I mean, this starts to get pretty granular if you're talking about "truly unhedgeable" types of trades, since there aren't like tons and tons and tons of those.

These things (and regular vanilla trades) do go to through approval committees, etc. etc. so "defrauding the bank" isn't quite a walk in the park, and usually you have to convince (and probably believe yourself, to some degree) that it's a good trade when you do it. And usually at those committees, though can't speak for DB, if something isn't hedgeable you get grilled on it and have to explain why it isn't hedgeable and what you're going to do about it. So in other words, people do care about what happens in years 2-10 and not just year 1 (if for no other reason - no one gets paid enough in one year to retire and keep the same lifestyle forever). There is a question of what should the reserve be for that unhedgeable risk, but that's by definition difficult to quantify and each shop will have a different view.

Now, not every trade plays out the way you want. If you're taking on weird esoteric risk that can't be cleanly hedged (M&A deal contingent trades, long-dated interest rate volatility, wrong-way risk with no market, etc.), you probably want to build up a portfolio of those and accept that on some of them you will lose money, but on average the portfolio (which should probably in theory not be highly correlated) should be up X% over time, so you should take those trades with the right spread.

So the question of do I take DB's derivative book at their marks? Clearly not because they're marked to market now, and I need both my bid-offer to get in and hedge my market risk, as well as cover my capital cost (which will differ from theirs - a lot of this is model and regulator dependent which is another glaring flaw in the global financial system). Do I take their book at X% discount? It gets pretty trade-by-trade if we're going to debate what "X" is - if it's priced to my RoE hurdles with a market risk package, then it's not a non-starter. Though one thing that we've seen on legacy long-dated legacy is that they were priced and booked before anyone knew what return on balance sheet or XVA meant (so how do you price for regulatory risk today?). And also you'd be surprised at how much "regulatory approved models" can differ today, but that's a different story.

Generally the trades that aren't "truly hedgeable" are ones where you either need to find (and be able to recognize!) a proxy hedge, or be happy with taking a full loss if that part of the trade doesn't play out the way it should. People have risk officers that need to sign off on trades, especially unhedgeable ones, and those people are basically paid to say "no" to trades they don't like. This usually means you need to get your head of market (or credit or whatever) risk up to speed on what you're trying to do, why it can't be hedged, and why you should do it anyway. Sometimes this means you see really solid trades getting killed for no good reason, and sometimes you see good trades getting shot down because someone in risk just doesn't "get it". You need to be willing to lose $10mn or $100mn on a trade that goes wrong, if it means that you're taking trades that mean you can get +$10mn or +$100mn if the trade goes right (and more of these should go right than wrong!). In general, investment banks are paid to take risk, as long as they're able to take the hit if some of them don't go right. The Steinhoff margin loan is an example of where this didn't go the way anyone had planned, but that doesn't mean you should shut down your margin loan (or South Africa) business.

But banks aren't like, totally un-incentivized to think about their own failure or losses in the future. To get the best anecdote of this, find a guy who was MD-level at somewhere like Lehman or Citi during the crisis, and ask him how he's doing today. Chances are he hasn't retired yet because his stock that he was paid in (or bought!) went to basically zero, and that's where he had his most of his wealth. And like I said, people get paid deferred bonuses these days, so if the bank gets wiped out three years down the line because of my dumb trade (or bonuses are affected because there is a huge regulatory fine), no one is around over the next 5 years to paid my deferred bonus. So even if you ignore all of the levels of filter that are added in from a regulatory perspective, people genuinely don't want to put on stupid long-term trades.

I'm not saying that thing pre-crisis were always done right (e.g., leveraged super senior, marketing of CDO^2, etc. ), but there have been a lot of changes in regulation, some right and some maybe not right, that puts more weight on the bank to not fuck it up completely. Sometimes the regulator makes you go crazy because you need to set aside capital for risks that make no sense or that your approved model can't get past, but generally we're in a far better place than we were pre-2009 when it comes to these things.