The 2008 crisis began in a market, US subprime mortgages, far too small to bankrupt the world. How did it become a global catastrophe?

B. Leverage and opacity: multiplied losses of unknown location

Thin equity turns a modest loss into insolvency, and securitisation meant nobody knew who held it, so counterparty doubt froze funding markets that had nothing to do with housing. Opacity did the contagion, which is why the post-crisis rules attack both leverage ratios and disclosure.