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Remember credit default swaps?

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Once considered a key tool for banks looking to shift risk off of their books, they were among a handful of complex financial instruments that in brought the global economy to the brink of collapse. The original idea was straightforward enough. JPMorgan took on risk each time it issued a loan. If it could develop a new type of contract that could be used to insure against the risk of a loan not being paid back, then it would free the bank to lend more freely.

In time, credit derivatives would be used to insure millions of low-quality mortgages across the nation, but when the housing bubble crashed in so too did the value of the underlying derivatives contracts. In the below scene from Money, Power and Wall Street , Masters retells the story of the deal that started it all.

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Privately, Masters has said that she was never involved in creating the kind of mortgage derivatives that fueled the crash, according to a report in The New York Times. She has yet to announce her next move. Journalistic Standards. You'll receive access to exclusive information and early alerts about our documentaries and investigations.

I'm already subscribed. April 3, Jason M. Twitter: jbrezlow.