Banks don't make losses. They can only collapse and so do governments.
With Variable or Adjustable Home Loan or Mortgage, banks can always keep interest rates high enough for the consumer. Hence the only way for banks to loose money is when consumers are unable to pay the loans i.e defaults. This is not the norm, but under extreme circumstances that is the only choice left for the consumer.
This smells like the old kingdoms where a stupid King will continue to raise taxes on the people without bothering to help them, resulting in either a take over or a revolution. All systems are created by people, for the people and when they start being unfair and unjust, people break the system. It is the responsibility of the government to create regulations and laws to create systems which are fair and just, so that people don't break the systems. Breaking systems is costly, but sometime systems don't leave enough choice.
Money is a system. It is a system of trust. Economic depression happens when people don't trust money anymore. In other words economy works when people trust money. And it is the responsibility of the government to make sure they do. It is hard to factor in how much people trust money into equations and hence it is left out, but that is the most important factor for the economy to work. The God Father and Hindi remake Sarkar show a glimpse of that other kind of economy.
Any business that cannot make losses can only collapse. Government, banks, corruption, Windows, Apple, Google Search, Facebook, Ebay, etc. When their is no choice, people invent something new.