Banking crises happen because of risky rules set by governments, not just by chance or economic cycles. Historical analysis shows that government policies encouraging risk-taking in banks, like deposit insurance or limiting competition, lead to more banking problems. For example, the U.S. subsidizing subprime mortgages caused the recent crisis. Effective responses to crises involve learning from past mistakes, like the British reforms after the Panic of 1857. But some responses, like adopting deposit insurance in 1933, can actually make things worse.