[pjc50]

The thing is that a crisis like this is inherently deflationary! Or at least has a strong negative impact on the business cycle.

> they allowed enough banks to fail.

There really were not a lot of "bank fails and depositors lose money" events. Ones I can think of were Kaupthing (for some reason a lot of UK local government were keeping their money in an Icelandic bank), and Cyprus (deemed too dodgy to bailout).

There was a lot of fiscal policy tightening ("austerity"), the other lever which people forget about.