The housing market collapse is the reason for the misassessment of risk, and the over-extension of credit. Mortgage-backed securities were considered AAA assets

The housing market collapse is the reason for the misassessment of risk, and the over-extension of credit. Mortgage-backed securities were considered AAA assets, which is why so little in cash reserves were maintained. >>Had Tether been around in '08, it would have been accumulating hordes of that stuff to back itself up. That's irrelevant, because every one, including regulators, would have considered that adequate collateral. There was a systemic misassessment, due to the systemic impact that government intervention had on the housing and sub-prime mortgage market.