Former U.S. Federal Reserve Chairman Ben Bernanke and two other U.S.-based economists won this year's Nobel Prize in economics on Monday for their research on the role of banks during financial crises, the Royal Swedish Academy of Sciences said.

Bernanke, a distinguished senior fellow at the Brookings Institution, showed how bank runs were a decisive factor in creating the Great Depression of the 1930s, the worst economic crisis in modern history, according to the academy.

During his time as Fed chairman from 2006 to 2014, Bernanke, 68, responded to the 2008 meltdown triggered by the collapse of U.S. securities company Lehman Brothers Holdings Inc. with bold quantitative easing and other measures, including the introduction of a 2 percent inflation target in 2012.

Meanwhile, Douglas Diamond, 68, of the University of Chicago and Philip Dybvig, 67, of Washington University in St. Louis, theorized how banks act as intermediaries between savers and borrowers, demonstrating their important function in society.

Screenshot taken from the Nobel Prize official website shows (from L) Ben Bernanke, Douglas Diamond and Philip Dybvig, the winners of the 2022 Nobel Prize in economics. (Kyodo)

"The laureates' insights have improved our ability to avoid both serious crises and expensive bailouts," Tore Ellingsen, the prize committee chair, said in a statement.

The prize of 10 million Swedish kronor ($886,000) will be shared equally among the three winners, with the award ceremony to be held in Sweden on Dec. 10.

The award is formally called the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. Unlike the prizes established under Nobel's will, the economics prize was created by Sweden's central bank in 1968 and was first awarded the following year.

The economics award concluded this year's series of Nobel prizes. The awards for medicine, physics, chemistry, literature and peace were announced last week.

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