In his review of Paul Krugman’s book The Return of Depression Economics and the Crisis of 2008, Brad Delong explains:

And the problem this time is that we did not understand the degree to which all the mortgage finance companies, investment conduits, MBS vehicles, CDO tranches, monolines and other non-bank financial players that had taken on the role of banks — of making long-term durable risky investments yet promising those who contributed the funds that their funds were liquid and safe — without being regulated like banks.