Banks play a crucial role in the global economy, yet they are vulnerable to failures that can have catastrophic effects. Key questions arise: What causes bank failures? What drives these failures? Can we avoid a banking crisis? What happens when a bank fails?

This book explores the causes, consequences, and potential prevention of banking crises. It begins by examining the fundamental roles of banks in the economic system, focusing on their intermediary functions like liquidity provision, payment management, asset transformation, and borrower oversight. The book then delves into the...