No, to be more specific, banks selling the collateralized mortgages that were subprime in risk as if they were prime and these risk ratings being accepted at their word and via collusion with the ratings agencies is what caused this.
There is no issue with collateralized debt as long as the risk is properly assessed, the whole point of securitization is that you can take on higher risk for higher reward of an asset that was previously just one single piece of risk.
There is no issue with collateralized debt as long as the risk is properly assessed, the whole point of securitization is that you can take on higher risk for higher reward of an asset that was previously just one single piece of risk.