Academic

Financial intermediaries usually put investors together with opportunities.  But one reason why they fared so badly in the crisis was that they retained so many risky assets on their books, rather than selling them on to sleepy pension funds and insurance companies who tend to be super long only, and very long term, investors....intermediaries could no longer roll their obligations by posting the bad assets as collateral.  Without repo or commercial paper, the intermediaries went insolvent quickly, because they borrow short and lend long.  Why did they keep these bad assets?

there is a longstanding tradition on Wall Street that a bank which underwrites a securities offering has an ongoing obligation to make a market in (i.e., buy and sell) those securities. Usually this is a good thing, as the bank can continue to make money crossing trades in the securities after they have been sold the first time. Unfortunately, it also means the underwriter is the de facto buyer of last resort for such paper. You can see how this can become a nontrivial source of pain for an investment bank when the market is in free fall and Fidelity or Putnam phones you for a bid on $100 million of toxic CDOs you sold them three months ago. It's even worse when everybody calls you up at once, because then you become the market.
Generally, bankers think long and hard before they try to welsh on this obligation. Traders and investors on Wall Street pride themselves on very long memories, and more than one investment bank has lost millions of dollars of repeat business from a buy-side account because they flouted this rule. Unlike M&A and other corporate finance activities?where you have to sign a 30-page contract, confidentiality agreement, and indemnification provision just to go to the bathroom?much of the sales and trading activity that takes place around the world continues to do so on the moral and virtual equivalent of a handshake. Even if most of the CDOs and other toxic securities Wall Street underwrote during the boom did not have explicit investor put options embedded in them?as those sold by Citigroup were reported to have?the implicit put was always there.