To understand what happened with the subprime mortgages and how they infected all the mortgage backed securities learn about Black and Sholes CAPM, which one of them received a Nobel Prize. Now the subprimes were the beginning traced back to Demrats Community Reinvestment Act (Carter Admin), where it was decided to help the “ghetto poor” into a house.
Now the Swiss Bank group decided to creat a new accounting rule that brought lending to a dead stop....there is a thread on that on FR, or you can read it at CanadianFreePress.
The CAPM was full of systemic risk.
My economics degree is only a BA, but I remember studying Black Sholes back in the day.