How did banks contribute to the crisis of 2008-2010?

Question

Quizplus · Accepted Answer

Banks made risky loans, particularly in the housing market, and bundled them into mortgage backed securities which were sold to investors. When the housing market collapsed, many of these securities became worthless, causing significant losses for investors and for the banks who held them. This triggered a chain reaction that spread throughout the financial system, leading to the global financial crisis.

How Did Banks Contribute to the Crisis of 2008-2010