Irresponsible lending, then disguising those bad loans and selling them in bundles to other banks.
In the end, most banks around the world owned billions of dollars worth of exceedingly dodgy loans, causing the whole industry to almost go tits up when the ordinary folk at the bottom defaulted on the loans they shouldn't have been allowed to take out in the first place.
Banks lost trust in each other after discovering that the bundles they'd been sold were a crock of poo, and so everyone in the industry stopped lending money to everyone else.
Viable businesses in need of a loan suddenly found the tap turned off and suddenly couldn't pay their bills/staff etc.
Many businesses went to the wall for lack of cash flow, putting their employees out of work.
Governments around the world then experienced high unemployment among their populations and found that the tax revenue from them while they were working, suddenly dried up now that they were jobless.
The general insecurity regarding jobs caused people to tighten their belts, resulting in High Street store sales plummeting. Stores, big and small, started to close, putting more people out of work, and so on, and so on.
Meanwhile, the bankers paid themselves the same ridiculous bonuses and had their yachts revarnished......