Without the Troubled Asset Relief Program (TARP) bank bailout, we would have had another Great Depression, says Neel Kashkari, who helped design the bailout.

“I think unemployment would have been 25 percent or higher without TARP,” Kashkari, now at Pimco, told CNBC.

“We’re talking Great Depression levels. A huge part of the program was about restoring confidence in the system.”

Kashkari was dubbed the “$700 Billion Man” for his key role in helping Treasury Henry Paulson devise the $700 billion TARP plan. Kashkari was assistant Treasury secretary.

Psychology played a key role in the meltdown, he points out.

“The crisis was a huge problem in its own right, but was magnified by the lack of confidence in the system. It felt like we were just trying to survive.”

Kashkari and his colleagues built as much flexibility into TARP as possible.

“The idea of TARP was to set up an auction for all the toxic securities. It saved the system,” he said.

“What terrified us was when blue-chip companies started coming to us asking for money, not just Wall Street banks. That’s when we knew that we had to go to Congress.”

Boston University economist Laurence Kotlikoff argues that the best way to prevent another banking crisis would be to radically reduce banks’ role.

“Banks would simply function as middlemen,” he writes in a new book. “Hence, banks would never be in a position to fail because of ill-advised financial bets.”