Announcing the prize, Stockholm University economist John Hassler said their research had proved invaluable during the 2008 crisis, which brought the global financial system to the brink of collapse.

The award to Mr. Bernanke cited a 1983 publication establishing bank failures as key to the transformation of an economic recession into the most severe depression of the 20th century.

“At the time, this was a break with the current view,” Mr. Hassler said. “Banks fail, but it was thought that was a consequence of crisis, rather than the cause of crisis.”

Mr. Bernanke said Monday that he was “incredibly honored” to receive the prize for his research on banks and financial crises.

“From 2006 to 2014 I was involved in a global financial crisis where the problems in the financial sector caused tremendous problems in the real economy, both here and around the world,” he said at an event at the Brookings Institution in Washington, D.C. “Thinking about these issues made me very determined to do everything I could along with my colleagues to try to prevent the financial system from melting down because I strongly believed that if that happened that it would bring down the rest of the economy.”

A quiet academic who spent most of his career studying the Great Depression and central banking at Princeton University and the Stanford Graduate School of Business, Mr. Bernanke rose to the forefront of policy-making just as the U.S. was entering a potential replay of the subject he mastered from history books.

Historians now credit Mr. Bernanke for averting an economic calamity by quickly devising aggressive new monetary policies—rock-bottom interest rates, loans to banks and controversial bond-buying programs—during and after a financial crisis that started in 2007 and spanned nearly two years.

His mantra became that he would do “whatever it takes” to prevent an economic collapse, and in many respects he did. A recovery began about two years after the panic started and became the longest expansion in U.S. economic history.

But the slow recovery and unpopular bank bailouts made Mr. Bernanke a lightning rod for criticism, especially from his own Republican Party.

The award to Mr. Diamond and Mr. Dybvig also cited a 1983 paper that explained how banks play a crucial economic role as intermediaries between savers and the businesses they ultimately invest in through “maturity transformation.”

But the paper showed that in taking short-term deposits and making longer-term loans, banks are “inherently vulnerable,” Mr. Hassler said. Additional work by Mr. Diamond explained that banks monitor borrowers on behalf of savers and have a unique insight into businesses that can’t quickly be replaced by newcomers if they go bust.

“When a bank fails, this knowledge disappears,” Mr. Hassler explained. “That is why banking crises have long-lasting consequences.”

Speaking to reporters, Mr. Diamond said the award had taken him by surprise.

“I was sleeping very soundly, and then all of a sudden, off went my cellphone,” he said.

Mr. Diamond said central bankers have absorbed the lessons from his research with Mr. Dybvig.

“A well-structured financial system is very vulnerable to the fear of fear itself,” he said in a press conference at the University of Chicago. “Ben [Bernanke] internalized that in his suggestions on policy and I think central bankers in general have internalized that lesson.”

The 2008 financial crisis showed just how essential and fragile banks can be, said Gabriel Chodorow-Reich, an economist at Harvard University.

In a 2014 paper, Mr. Chodorow-Reich updated Mr. Bernanke’s research on the Great Depression and found that firms that borrowed from unhealthy lenders were less likely to hire and invest than firms that stuck with healthier borrowers.

“Banks matter,” he said. “We can trace the impact of the individual banks onto their borrowers and their individual investments and employment and the things that matter in the real economy.”

With interest rates rising around the world, worries about the resilience of banks and other financial institutions have revived over recent months. Late last month, the Bank of England intervened in the market for U.K. government bonds to support the country’s pension funds.

Mr. Diamond said regulators were “much better prepared” for threats to financial stability than they had been in advance of 2008, when “there wasn’t a perception that there was a high level of vulnerability.”

—David Harrison and Harriet Torry contributed to this article.

Write to Paul Hannon at paul.hannon@wsj.com