How to prevent a financial crisis

Preventing a financial crisis envolves taking risks and doing things that might not be in your favour. You're the government, trying to prevent another disasterous financial crisis, what can you do? First of all, most of what caused the 2008 financial crisis is the bank, giving out too many loans, then loosing money. This can effect a bank's profit in the moment, depending on the amount of money the bank has paid a customer, it would take a lot more than a few years for customers to pay back all the money the bank has paid them. On the other hand, if a bank doesn't give out loans, this could have a huge impact on their profit, because when a bank borrows someone money and the person is paying the money back, the person has to pay intrest. Through customers paying interest, the banks make money. In other words, borrowing money from a bank is not free. It will cost you interest, a bill you must pay for the banks to make money.

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