An economist describes how Canada didn't have the Great Depression and pre-Great Depression bank failures like the US did because US banks were highly regulated and Canadian banks were not regulated.

http://econlog.econlib.org/archives/..._problems.html

To summarize, three reasons seem to explain why this bad solution was adopted.* First, an over-regulated banking system was fueling regular crises. Second, domestic and international opinion favored government intervention (supporting an old populist suspicion of private banks in America). Third, Wall Street bankers welcomed a central bank as a protection for their dominant position.
*The wide adoption of central banks.