Three US-based economists have won this year's Nobel Prize in Economic Sciences. They include the US Federal Reserve's former chair Ben Bernanke.

The Royal Swedish Academy of Sciences said on Monday that they are being recognized for their research on banks and financial crises.

Tore Ellingsen from the Academy said, "We didn't know it at the time but 15 years ago, much of the world still stood at the brink of a devastating economic crisis. Most of us were unprepared for it. However, a few academic economists were both prepared and worried."

Bernanke headed the US Federal Reserve from 2006 to 2014. He is well known for launching quantitative easing while the US struggled after the financial crisis.

The other winners are Douglas Diamond, a professor from University of Chicago and Philip Dybvig, a professor from Washington University in St. Louis.

The Academy says the three have significantly improved our understanding of the role of banks in the economy.

The Academy says their analyses have been of great practical importance in regulating financial markets and dealing with financial crises.

Shortly after he won, Diamond was asked if the world is heading to a financial crisis similar to 2008's.

Diamond said, "Recent memories of that crisis and improvements in regulatory policies around the world have left the system much, much less vulnerable."

The award ceremonies for them and the other Nobel Prize winners announced this month will be held in December.