In fact panics were a regular feature of American economic life even as banking was taking roots – most spectacularly during the Great Depression. It was the introduction of deposit insurance in 1933 that substantially reduced the vulnerability of American banks to runs. 3. Over the years deposit insurance has taken root all around the world.
6  BIS Review 165/2009  Second, the extent and diversity of investment practices across all segments of the financial system requires particular attention. For example, fast-growing credit to similar sectors or regions could be a sign of vulnerabilities building up. The imbalances might become unsustainable later and unravel in a disorderly fashion. This risk requires looking at earlywarning signals in current market data.