Former Fed chief Bernanke and colleagues win Nobel prize in economics

Douglas Diamond, Philip Dybvig and the one-time central banker will share the $885,000 award for their research into banking and financial crises

Former Federal Reserve Chair Ben S. Bernanke and two US-based colleagues won the 2022 Nobel Prize in Economics for their research into banking and financial crises. Picture: BLOOMBERG

The winners “have significantly improved our understanding of the role of banks in the economy, particularly during financial crises, as well as how to regulate financial markets,” said the official Twitter feed of the Nobel prize. Their research “reduces the risk of financial crises developing into long-term depressions with severe consequences for society.”

Diamond and Dybvig were lauded for their research identifying the vulnerability of banks to rumours of collapse, and how governments can prevent that. Bernanke’s studies meanwhile analysed the Great Depression, and how bank runs ensured that crisis became so extended. Diamond, contacted by the award committee by phone, told journalists gathered in Stockholm that, as with most such winners, the news had taken him by surprise while sleeping. He went on to explain what his research showed about financial turmoil and how to avoid it.

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