b) Collateralized Debt Obligations

Collateralized Debt Obligations (CDOs), created in the late 1990s, played a significant role in the 2008 financial crisis. CDOs are complex financial products that pool together various types of debt, such as mortgages, and then sell slices of that pooled debt to investors. The rise of CDOs was fueled by the housing boom and the high demand for mortgage-backed securities. However, their complexity and the poor quality of some of the underlying assets contributed to the financial crisis when the housing market collapsed. The fallout from the failure of CDOs highlighted the risks associated with complex financial instruments and led to increased scrutiny and regulation in the financial sector.