When we look at the GFC we see that one of the chief methods by which the great debacle was brought about was through the use of Mortgage Backed Securities, which were private market, presumably permanent alternatives to CB "repo" operations and which were highly profitable to the originators, but which were highly dangerous to the financial system. The same function as performed by the MBSs could have been performed by central banks, but they then would have been responsible to actually look at the mortgages they were taking in for "repo" and the loan originators could not have assumed that they were no longer responsible for any aspect of the loan, as they would be liable to repurchase the loans after a fixed time. Actually, the HFA, Fanny Mae and Freddy Mac were facilities for underwriting and permanently holding mortgages while returning money to the originators, but they had standards, even if inadequate. There were no such problems with the MBS packagers.

"Structured products finance" is a game of intentional obfuscation. Honest businessmen have no need to spend time and money on imaginative ways to obfuscate the nature of the product they are selling. So everybody who put together a "structured product" would have to know (or should be "deemed to have known") that it was toxic shit that would blow up in some poor schmuck's hands.

Let me give you a couple of quotes. (Emphasis mine)

Role of the SPV

To understand the role of the SPV, we need to understand why a corporation would want to raise funds via securitization rather than simply issue corporate bonds. There are four principal reasons why a corporation may elect to raise funds via a securitization rather than a corporate bond. They are:

1. The potential for reducing funding costs
   
2. To diversify funding sources
   
3. To accelerate earnings for financial reporting purposes
   
4. For regulated entities, potential relief from capital requirements

We will only focus on the first of these reasons in order to see the critical role of the SPV in a securitization.²
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²For a discussion of the other reasons, see W. Alexander Roever and Frank J. Fabozzi, "Primer on Securitization," Journal of Structured and Project Finance, Summer 2003, pp. 5-19.

(This is from Chapter 14 of Fabozzi's Bond Markets, Analysis, and Strategies)

Wikipedia: Frank J. Fabozzi

Frank J. Fabozzi is the Frederick Frank Adjunct Professor of Finance at Yale School of Management. He has taught at Yale University since 1994. Fabozzi, an investment management expert, is a Wall Street authority and editor of the Journal of Portfolio Management. He is a consultant to several financial institutions. He was inducted into the Fixed Income Analysts Society Hall of Fame in November 2002. He is also a Fellow at the Yale International Center for Finance.

Wikipedia: Special purpose entity

Often it is important that the SPE not be owned by the entity on whose behalf the SPE is being set up (the sponsor). For example, in the context of a loan securitisation, if the SPE securitisation vehicle were owned or controlled by the bank whose loans were to be secured, the SPE would be consolidated with the rest of the bank's group for regulatory, accounting, and bankruptcy purposes, which would defeat the point of the securitisation. Therefore many SPEs are set up as 'orphan' companies with their shares settled on charitable trust and with professional directors provided by an administration company to ensure there is no connection with the sponsor.