The Commodity Futures Modernization Act of 2000 (CFMA) brought about significant changes in the financial landscape, but its impact was not fully felt until the 2008 financial crisis. One aspect that gained particular attention during the crisis was the treatment of credit default swaps.

Credit default swaps, often compared to insurance policies, allowed lenders to protect themselves against borrower defaults. However, unlike traditional insurance, these swaps were also accessible to speculators who stood to gain if borrowers defaulted. The massive growth of the credit default swap market raised concerns about transparency and systemic risks to the global economy.

The CFMA's treatment of credit default swaps excluded them from state gaming laws and insurance regulations, leaving them unchecked and contributing to the financial crisis. The lack of transparency in the market and the complexity of these instruments added to the systemic risks.

The financial dominos began to fall in 2008, starting with the failure of Bear Stearns. The widening spread on the bank's credit default swaps indicated vulnerability, leading to reduced access to capital and ultimately its forced sale to JP Morgan. The bankruptcy of Lehman Brothers in September 2008 and the subsequent bailout of American International Group (AIG) further revealed the fragility of the financial system.

As the global economy teetered on the brink, it became evident that the bailouts were not merely covering bad loans but rather gambling debts of large financial institutions. The CFMA's exclusion of credit default swaps from state regulations allowed risks to accumulate, ultimately contributing to the severity of the crisis.

In retrospect, the CFMA played a significant role in shaping the crisis, as credit default swaps acted as catalysts for the real estate market bubble and bust. The absence of state regulation in this area exacerbated the harmful effects of the financial meltdown. As the world sought to recover from the aftermath, the CFMA and its treatment of credit default swaps became subjects of much scrutiny and criticism.