The short answer is banks and all other financial institutions making extremely irresponsible bets with everyone’s money. Instead of investing in a prudent and informed way, most financial entities were simply using the stock market, derivatives etc… as a giant casino. A casino that was usually rigged in their favor.
The crash occurred when massive bets in the financial casino came up as losses. Many due to bets related to mortgages and housing prices. Massive betting combined with mortgage loans being given to people who can’t afford them. Financial institutions betting on those mortgage loans not defaulting and down goes the house of cards.
Rinse, wash, repeat???