This is the fault of the state. How? If I lend the capital to a house purchaser and they default I suffer a loss - that focuses my mind as to the real risk and consequence. If my loans to borrowers were made with capital that I did not own but was nevertheless available to me as a result of, say, my substantial and consistent business cash-flow, that would be a risky business strategy, but I could argue I was still not actually 'trading insolvently' because the loan I had made formed an asset on my balance sheet.
How could I take such a risk (knowing if my borrower defaults I cannot pay my liabilities)? Easily if I have a state registered Limited Liability company (Ltd Co) and I measure the potential for profit exceeds the value of my Ltd Co should this loan default and the company go bust (unable to pay creditors). Most Ltd Co's do not see this sort of prospect as making commercial sense even with their directors enjoying Limited Liability protection because they do not see the potential for sufficient return against capital available and the prospect of risk as a viable equation (let alone its questionable legality within the scope of trading insolvently as a Ltd Co).
Yet banks do expose themselves to this risk. Why? Because they can create almost as much money as they require so long as they are either receiving deposits at a sufficient rate, are re-financing loans or are able to enjoy interbank lending to fund the loans they are making. And then the full risk is ultimately mitigated because the central bank will act as 'lender of last resort' should their house of cards threaten to fall. Whilst the beneficiaries of central banks are hard to identify the guarantor is not: it is the state. But what actually is 'the state'? The state is a conduit for the power of the forced taxation of human society.
The only viable and moral solution is to remove the link between the productive, wealth creation, ability of human society and the financial indemnification of all types company owners for their losses - especially banks. Bank's owners will be very focused as to the risk they are taking when they see all their private property, past and future, is at risk. Bankers want the all the reward for themselves and YOU to take all losses. Bankers have used a succession manufactured wars to indebt states to them and to force states to allow the grant of this present banking system. They have created repeated economic bubbles and crashes to force the state to borrow more of the money they create via the permitted wizardry of fractional-reserve-banking.
Whilst we continue to have human society controlled and bleed via a 'state' we continue to allow a means for the banking money power elites to tap-in to the life-blood of humanity, through the power of state taxation, for their own gains at the cost of all others. The only enduring protection is to end the state!