But when the sub-prime mortgage market turned sour, the darling of the financial markets became the Black Hole equation, sucking money out of the universe in an unending stream.

FORBES: Black-Scholes Didn't Cause the Financial Crash

But while many major international banks have seen large writedowns in the wake of rising defaults among the sub-prime mortgage market, the majority of China's US mortgage-backed securities were underwritten by US government agencies such as Fannie Mae.

BBC: RELATED BBC SITES

One reason is that the country's banks were relatively unexposed to the US sub-prime mortgage market.

BBC: Can Spanish banks lead survival charge?

However, Schwab said that because the U.S. sub-prime mortgage crisis that heralded the recent economic downturn, was one of a slew of factors driving market turmoil, the World Economic Forum was ideally placed to push discussion forward.

CNN: Market avalanches hit Davos talks

And sure enough, the greed got seriously out of hand and then imploded, in fact twice, once with the bursting of the stock market bubble of 2000, and then even more seriously with the real estate and sub-prime mortgage bubble and resulting financial meltdown of 2008-2009.

FORBES: Bringing Back Glass-Steagall Would Rebuild Shattered Confidence In Wall Street

"That is about 2% of the mortgage market and they would have been taken mainly by buy-to-let borrowers and sub-prime borrowers, " he said.

BBC: Libor scandal: Who might have lost?