That's assuming the system can fix itself, which generally isn't true :). If a boiler in your bathroom maneuvers itself into a runaway positive feedback loop, it won't fix itself. It will explode, sending superheated water and shards of steel and plastic across your house. The smoldering remains of the PID controller that drove the failure won't recollect themselves and reweld the shredded tank.

A system that fails can be fixed by the system in which the failing one is contained. That same outer system can also work to prevent the inner system from failing in the first place.

(And sure, in the analogy, the "outer system" is the homeowner that can buy a new boiler. But wouldn't it be better to make sure the original boiler can't move out of its control envelope? Then the homeowner wouldn't have a bathroom to renovate and a pet to bury, after it caught a flying pressure valve in the eye.)

When has such a policy actually worked? Do you have any clean historical examples at a large scale?

Panic of 1873 is the closest I know of and it didn't go very well

I'm not taking a stand. It's just that macroeconomics is hard and counterintuitive, especially when we're dealing with something large enough to have currency implications