The last 25 years have seen an impressive number of banking crises all over the world. These crises have renewed interest of economic research on the causes of fragility of banks and the possible remedies to it. The justifications and organisation of public intervention in the banking sector...

Almost every country in the world has sophisticated systems to prevent banking crises. Yet such crises--and the massive financial and social damage they can cause--remain common throughout the world. Does deposit insurance encourage depositors and bankers to take excessive risks? Are banking...