Credit bubbles like stock market bubbles and housing bubbles are unavoidable. Hell when speculation can even be in tulips anything is possible in a free society.
Honest societies? Are you under the impression that we used to have one?
There are 2 kinds of credit: credit based on actual saved funds and credit created (legally) by the banking system quite literally from nothing. The latter distorts interest rates and is inherently inflationary. Banks only have to legally have 10% reserves backing their deposits which means if all their customers came in at once, they couldn’t pay. Government likes the idea of easy money because it’s alternative to taxes so the concept is legal.
Of course there’s the FDIC but that encourages banks to stay fully loaned up because it removes the fear of a bank run which will naturally keep a bank at least slightly less inflationary.
Although there’s no way the FDIC could stop a nation wide bank run. The fed would have to print the money. If we were an honest society, fractional reserve banking would never have been an issue because it would have been outlawed.