Loans and savings dry up, but they remain in balance, the matching error is within bounds. Strictly a two color S&L with very little loan activity.
This is Uncle Milt's equilibrium. The currency banker is stuck at the short end with inflation zero and rates zero. The government is balanced. All the savings and lending is taking place up the curve.
Just do nothing, let the folks take their loans and savings and do what they will, charges are zero. The effect on entrepreneurs is to speed things up and take advantage of zero rates, and eventually we get traction and the currency banker sheet grows, charges rise.
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