I personally think the recession could be avoided. Most people would blame on the bank or the borrower.
For me, I personally think the problem is the compound interest.
Albert Einstein once says “Compound interest is the eighth wonder of the world."
I think this compound interest is also a weapon of mass destruction.
How did the problem begin?
When the bank lends $100 to the market (you, me, business, and whatever people) and charge $1 interest. Within the market there are only $100 of money, the $1 does not exist. The only way the market can pay that $1 interest is when the bank spends $1 on the market.
This becomes complicated if the bank lends $100 million to the market with $1 million interest. There is a limit to how much the bank can spend. Once it fails to spend that amount, some of the borrowers need to refinance their loan which makes the amount of loan not clear bigger and bigger.
Hence that is why you have the 10 years circle.
Fixing the system
I personally think this is how a bank should be run. The bank must spend whatever profit they gain.
Every 5 years, the bank must write off debt equal to the amount of profit they did not spend but allow to retain a certain amount of money for at least 1 year of operation.
However, the debt the bank write off should focus on a borrower who involved in the production of goods/services in exchange for lowering the price.
This will keep inflation in check and the value of money retained.
This becomes complicated if the bank lends.the value of money retained.