Seven Times When Financial Derivatives Teetered the World's Economy on the Brink of Ruin

The Subprime Mortgage Crisis, 2008

The Subprime Mortgage Crisis in 2008 was a devastating example of financial derivatives gone awry. Financial institutions used derivatives known as mortgage-backed securities to speculate on the U.S. housing market. However, when the housing bubble burst, these derivatives amplified the impact, leading to a global financial crisis. This event highlighted the systemic risk posed by financial derivatives and led to a significant overhaul of financial regulations.