Argentina's banking system faced a crisis in the 1930s due to bad assets and the Great Depression. The researchers suggest that the crisis was caused by a mix of internal and external factors, not just external shocks. The tension between internal and external convertibility led to the collapse of the currency board and the creation of a central bank. The central bank bailed out the banking system at a high social cost, impacting inflation and financial health. This situation mirrors recent crises in developing countries and raises questions about how monetary and banking systems should be designed.