The banking industry has faced instability since the Great Depression, with increased competition and fragility due to their role in providing liquidity to the economy. Deposit insurance is crucial for protecting depositors, but current regulations may not be sufficient in addressing market information problems. Capital standards set in 1988 have been adopted by many countries, but critics argue that they do not account for individual banks' credit risk and diversification. Higher capital ratios may not necessarily lower risks. Further reforms are expected, with a need for optimal deposit insurance and complementary instruments to regulate banks effectively. Subordinated debt and governance instruments may be more efficient in addressing banks' commitment issues.