If a bank of other business is in trouble the common practice today is to bet on its downfall. It is especially valuable to engage in short selling when you have either insider information or have made a discovery about the company that others don't know about yet.
One of the last things people would be inclined to do is tell other people about the problem facing the company. If too many people know about it there is less profit to be made. Better still there are often larger investment banks that can manipulate markets in a way that automatically gives them a "type" of insider information. Let's look at a real example...
Investors from an investment banks buy oil contracts on oil that is to be delivered at a given date. They have some methods that can both delay delivery of the oil and/or drive of the price of the contracts before the contract is fullfilled (sold). They can then bet against stocks in the transportation sector for example. On a larger scale they may be lobbying a government for a rule that will give them some advantage, and because not everyone knows about the lobbying effort, they can bet against the losers of the impending legislation. There are so many small changes added to bills before they pass Congress that are the result of these lobbying efforts. And of course, this goes on throughout the world, not just in the United States.
If investors were not so easily able to bet "against" but only "for" companies, there would surely be more stability in the markets.