To begin with, we saw that the spread of the risks inherent in structured products also meant a wide dissemination of any underlying problems associated with the assets at the root of these instruments. Moreover, the complexity and lack of transparency in many of the structured products added to the market dislocations.
It was extremely difficult for investors to peel back the layers of these securities and derivatives to determine, with confidence, both the creditworthiness of the assets backing a particular security and the market value of the security itself. Even supposedly sophisticated investors became extremely uncertain and that, in turn, led to fear.