American economists win Nobel prize for bank, financial crises research
Copenhagen, Oct 10 (EFE).- The 2022 Nobel Prize in Economic Sciences has been awarded to Ben Bernanke, Douglas W. Diamond and Philip H. Dybvig for their “research on banks and financial crises,” the Royal Swedish Academy of Sciences revealed Monday.
Discoveries made by the three laureates “significantly improved our understanding of the role of banks in the economy, particularly during financial crises,” the Academy said in a statement.
“An important finding in their research is why avoiding bank collapses is vital,” it added.
“Modern banking research clarifies why we have banks, how to make them less vulnerable in crises and how bank collapses exacerbate financial crises,” the statement said.
Bernanke, Diamond and Dybvig laid the “foundations” of this research in the early 1980s.
“Their analyses have been of great practical importance in regulating financial markets and dealing with financial crises.”
Diamond and Dybvig were recognized for their work demonstrating how banks work as an intermediary in society by channeling savings into investments to keep the economy running.
Bernanke, former head of the United States Federal Reserve between 2006-14, analyzed the 1930s Great Depression to analyze how the length and depth of an economic crisis could be affected by the functioning of banks.EFE