The study looked at how different policies affected bank lending during a financial crisis in 1920. They compared two types of policies: one that raised interest rates (LAW) and one that focused on regulating banks (macroprudential). The researchers found that the macroprudential policy was more effective at reducing risky lending and leverage in banks compared to the interest rate hike. This was because the macroprudential policy allowed for more targeted control over lending to risky borrowers. The interest rate hike, on the other hand, sometimes made the situation worse by encouraging banks to find ways around regulations. The study shows that the design and context of financial policies are crucial for their success in maintaining financial stability.