US politicians have been accused of failing to learn the lessons of the Great Depression when they rejected a $700bn (€487bn) bail-out scheme for the banks.
Then as now, some politicians argued that "greedy" bankers who had made poor investment decisions should not be bailed out by the government.
A lack of intervention in the 1920s is widely credited for helping to push a stock market crash and fledgling recession into a full blown depression that lasted throughout the 1930s.
During that period, output in the US dived by 25%, more than one in four people was unemployed, incomes fell and deflation took hold.
There were also frequent runs on banks as desperate consumers withdrew their money, eventually leading to the introduction of the bank holiday – days on which no-one was allowed to make withdrawals.
There are striking and worrying parallels between the Great Depression and today’s crisis.
While there is not a consensus among economists about the cause of the Great Depression, many, including the current chairman of the Federal Reserve Ben Bernanke, argue that it was triggered by a debt bubble.
During the 1920s, consumers and businesses took advantage of low interest rates to borrow money cheaply, often in the case of individuals to buy cars and furniture, as well as property.
As the depression took hold, people became reluctant to continue taking on this debt, leading to steep falls in consumer spending.
At the same time, rising unemployment and falling incomes led to large numbers of people defaulting on what they owed – a situation not dissimilar to what is currently happening in the US sub-prime housing market.
In the 1920s people were also borrowing money to speculate on shares and Wall Street banks set up investment trusts that often invested in each other.
Today, many consumers have mortgaged themselves up to the hilt, often in the mistaken belief that property is a safe bet.
Banks have also taken on each other’s mortgage book risks through complex securitisation products.
Another strong parallel between then and now is the loss of confidence in the banks, which set off a downward spiral leading to widespread banking failures.
In the 1930s, consumers decided their money was no longer safe and queued to withdraw it from the banks. Today the loss of confidence is not so much on the part of consumers, but rather by the banks themselves.
The end result, however, is broadly the same: a loss of confidence has restricted the funding options available to banks, whether these are loans from each other or money from customers’ deposits. This has caused banks to retrench and restrict lending in a bid to build up their capital reserves.
Back in the 1930s, what began as an American problem quickly spread around the world through global stock market falls, rising unemployment and banking failures.
Today that is also the case, with major financial institutions failing not only in the US, but also across Europe and in the UK.
Northern Rock was nationalised by the British government last year following a run on the bank, while Bradford & Bingley was taken into government care this week.
But while the parallels between the Great Depression and now make for fairly gloomy reading, the differences are more cheering.
First, and possibly most importantly, the world financial systems are far better set up today to deal with the crisis than they were in the 1930s.
Michael Moran, professor of government at the University of Manchester, said Wall Street during the 1920s was like the “Wild West”.
He said regulators today, including the central banks and the Financial Services Authority, know a lot more about the financial markets than regulators did in the 1920s.
Not only was intervention shunned during the Great Depression, but the Federal Reserve’s hands were also effectively tied by restrictive regulations.
The amount of money that the Fed was able to advance was limited by laws requiring it to be partially backed by gold reserves.
As a result, by the end of the 1920s, the Fed had advanced all of the credit that could be backed by its gold supply.
By not acting to increase liquidity, economists claim the Fed allowed the supply of money in the economy to shrink by around a third between 1929 and 1933.
This time around intervention has been quicker. Central banks have pumped billions of pounds into the money markets in a bid to boost liquidity.
In the 1930s, the problems in the US were also exacerbated by rising interest rates, while this time around the Federal Reserve has been quick to aggressively slash the official cost of borrowing, although the UK and Europe has yet to follow suit.
Secondly, the failure of retail banks on the same scale as during the Great Depression is not being permitted now. While there have been some casualties, most notably Lehman Brothers, governments around the world are stepping in to support the banking system, either by nationalising institutions or helping to broker takeover deals.
This is in stark contrast to the first 10 months of 1930, when 744 banks failed, with the total soaring to 9,000 by the end of the decade.
The run on banks during the Great Depression led to depositor protection schemes being set up in the US.
This time around, governments are taking pre-emptive action, with the Irish Government yesterday saying it would guarantee all of savers’ money for two years.