Portraits of the 2022 Nobel laureates in Economic Sciences Ben S. Bernanke (L), Douglas W. Diamond (C) and Philip H. Dybvig are seen on a screen during the prize announcement in Stockholm, Sweden, Oct. 10, 2022. (Xinhua/Ren Pengfei)

The Royal Swedish Academy of Sciences on Monday decided to award the 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig "for research on banks and financial crises."

This year's laureates in the Economic Sciences "have significantly improved our understanding of the role of banks in the economy, particularly during financial crises," the academy said in a statement. "An important finding in their research is why avoiding bank collapses is vital."

The foundations of modern banking research were laid in the early 1980s by the laureates, whose analyses have been "of great practical importance in regulating financial markets and dealing with financial crises," the statement said.

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

In a telephone interview onsite, Diamond said the news "did come as a surprise." Talking about the current situation, he said "we are certainly much better prepared today, compared with the 2008 financial crisis."

He said that financial crises become worse when people lose faith in the financial system, and that banks should be prepared to make the financial sector stable.

Bernanke, born in 1953, is Distinguished Senior Fellow of economic studies at the U.S.-based Brookings Institution. Diamond, born in 1953, is Merton H. Miller Distinguished Service Professor of Finance at University of Chicago Booth School of Business. Dybvig, born in 1955, is Boatmen's Bancshares Professor of Banking and Finance at Washington University in St. Louis, Olin Business School.

The prize amount is 10 million Swedish kronor (about 880,000 U.S. dollars) and will be shared equally between the three laureates.