Former Federal Reserve Chair Ben Bernanke, Douglas Diamond, and Philip Dybvig won the Nobel Prize in economics on Monday for their research on banks and financial crises.

Bernanke served as chairman of the Federal Reserve from 2006 to 2014 and is now at the Brookings Institution in Washington, D.C. 

Diamond is a professor at the University of Chicago Booth School of Business, and Dybvig is a professor at the Olin Business School of Washington University in St. Louis.

“The laureates’ insights have improved our ability to avoid serious crises and expensive bailouts,” said Tore Ellingsen, Chair of the Committee for the Prize in Economic Sciences.

Bernanke’s analysis of the Great Depression in the 1930s revealed how and why bank runs were a major cause of the crisis's length and severity.

Diamond and Dybvig’s work looked at the societally important role banks play in resolving the potential conflict between savers wanting short-term access to their money and the economy needing savings to be invested in long-term assets; and how governments can help prevent bank runs by providing deposit insurance and acting as a lender of last resort.