Most of the bank failures in the 1980s and 1990s were systemic and involved all or most of the banks and financial institutions in a country. These crisis and bank failures resulted from the implosion of the asset price bubbles or from the sharp depreciation of national currencies in the foreign exchange market. They happened in three different waves: 1980s, beginning of 1990s and second half of 1990s.
Cycle of manias and panics results from the pro-cyclical changes in the supply of credit; the credit supply increases relatively rapidly in good times, and then when economic growth slackens, the rate of growth of credit has often declined sharply.
Non-sustainable patterns of financial behavior: asset prices today are not consistent with asset prices at distant future dates.
Bubble involves the purchase of an asset, usually real estate or a security, not because of the rate of return on the investment but in anticipation that the asset or security can be sold to someone else at an even higher price.
The term mania describes the frenzied patterns of purchases, often an increase in prices accompanied by an increase in trading volumes, individuals are eager to buy before the prices go further.
The dilemma of government intervention upon smoothing out mania and bubbles is moral hazard. That is, if central banks function as the last resort of lender, investors may be less cautious in investing.
The monetarist view is that the mania would not occur if the rate of growth of the money supply were stabilized or constant.
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