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this post was submitted on 14 Aug 2024
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Asklemmy
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Same thing as if everyone stopped paying any type of loans. A shock to the banking system, potentially a collapse if the debt in question is a significant percentage of all debt. Many people would lose their savings.
And no don't hope that bank owners would absorb the debt, they would just liquidate the bank in a bankruptcy wiping out everyone's deposits.
Edit: In most countries there's also a deposit insurance scheme meant to cover cases of bank failure. But it can cover one or two banks failing, not all of them at once.
In Germany, everyone is protected up to 100,000 €. So it would actually be a nice reset button where only the rich would "suffer"
Yeah except it's backed up by the government. So if it all comes due with the exact same time the people are still paying that money either way.
... and with the help of inflation hack