3  In the 1890s more than half the note-issuing banks had suspended payment – one third never re-opened (Cornish 2010, Kent forthcoming). By comparison, only three minor banks failed in the 1930s’ Depression. 4  Shann and Copland (1931). BIS Review 107/2010  1  problems.
Human nature being what it is, people (or governments) are inclined to project into the future with undue confidence and insufficient assessment of risk. They often decide to invest more in ventures that are marginal, or even speculative, borrowing to do so.