Read the following passage and answer the questions.

The Nobel Prize in Economics in 2022 has been awarded to Ben S. Bernanke, Douglas, W. Diamond and Philip H Dybvig "for research on banks and financial crises". One of the important findings in their research is why avoiding bank collapses is vital. Saving must be channelled to investments for the functioning and growth of any economy. But there arises a conflict - while the savers want instant access to their money for unexpected outlays, the borrowers need to know they will not be forced to repay their loans prematurely. Diamond and Dybvig, show how banks offer an optimal solution to this problem. Banks may act as intermediaries, who accept deposits from savers and allow access to their money, when they wish and also offer long term loans to borrowers. But the analysis of these authors also shows banks are vulnerable to rumours and they may lead to their imminent collapse, when a large number of savers simultaneously, run to a bank to withdraw their money- a bank ran occurs and the bank collapses. such dangerous dynamics can be prevented through the government by providing deposit insurance and acting as a leader of last resort to banks. Dimond demonstrated another societally important function by a bank. Banks as intermediaries between savers and borrowers, are in a better position to assess a borrower's creditworthiness and ensure that loans are used for good investments. "The laureates insights have improved our ability to avoid both serious crises and expensive bailouts."