The problem erupted because of a gigantic grey market in CDOs and other esoteric "financial products" which mainly appear to have been designed primarily to siphon money from their customers.

Glass-Steagal never envisioned the Rube Goldberg tower of cards this market created, with many transactions being so complex that they resist analysis.

http://www.kamakuraco.com/Portals/0/doclibrary/KCP26.pdf