In order to contribute to understanding various factors affecting financial stability, the paper describes aspects of financial regulation and bank risk management that directly impact the occurrence of banking crises. Financial stability is considered a public good because banking crises significantly negatively affect economic growth and prosperity. The banking sector constitutes the core of economic stability, and its stability significantly impacts the security of the entire system. Adequate risk management, using various methods, ensures strategy improvement and protection from crisis situations. The goal of effective risk management is to ensure continuous operations and achieve organizational objectives, considering the connection between risk management and decision-making. It is crucial to identify diverse risks and apply appropriate strategies, which requires quality management. Historical data shows the devastating, global consequences of banking crises, which today are tried to be avoided through financial regulation. Despite the similarities in pre-crisis periods, unpredictability of technological and global development makes it difficult to identify clear patterns in the onset of banking crises and prevents their effective prediction. Financial regulation ensures the safe operation of banks, protects consumers, encourages innovation, etc. However, the application of financial regulation does not automatically guarantee improvements the financial market, as obstacles such as high regulatory costs can challenge its effectiveness. This graduate paper shows the impact of control and financial regulation on the prevention of banking crises through the example of Erste Bank in Croatia. Erste Bank emphasizes the importance of professional risk management and ensuring adequate capital. According to its financial report for 2022, Erste Bank meets all regulatory requirements, effectively manages risks, and operates with continuous growth.