Central banks set the stage for financial collapse through excessive credit expansion, but a lax monetary policy isn’t the only way that policymakers can foster a meltdown. As the recent banking crises in Iceland and Ireland illustrate, a faulty deposit insurance system and a poorly managed accession to the currency union can make matters worse.

David Howden is a MA (Econ.) student at the Universidad Rey Juan Carlos, Madrid, Spain and a past winner of The Sir John M. Templeton Fellowships Essay Contest.
Banking and FinanceBanking Law and RegulationBusiness and EntrepreneurshipEconomic PolicyEconomyEuropeInternational Economics and DevelopmentLaw and Liberty
Other Independent Review articles by David Howden
Fall 2015 Why Did China’s Population Grow so Quickly?