For example, one that finds strong positive spillovers is Bennett T. McCallum (2003), “Japanese Monetary Policy, 1991-2001 (PDF),” Federal Reserve Bank of Richmond, Economic Quarterly, vol. 89 (Winter), pp. 1–31.
Until recently, regulatory and supervisory systems were designed to retrospectively identify at what point in time, so to say, a thief stole your money, not to alert you when he is actually stealing it. The rogue banker could beat the system and beat the house as well. A bad bank anywhere can affect good banks everywhere.