Of course those banks would collapse. This revolving debt, that individual consumer debt, provides the interest product on which bank makes money. If there were a sudden and sharp and very massive decrease in consumer debt, the major banks would fail. They rely on consumers to keep themselves in debt.
If consumer debt did not exist, banks likely would collapse. The only way they'd be able to survive is if they really up the taxes they dole out, or as they like to call them, "maintenance fees." I think banks should be centralizes and ran by government. Profiting off of people's money like this is sick.
Yes, I think that banks would collapse if individual consumer debt did not exist, because that is such a large portion of our economy. Banks have always depended on credit. Banks have always allowed people to carry debt. This puts extra money into the economy and it keeps the banks in business.
I think there would be better balance between the banks and the people, if they had no debt both would benefit. The banks lose a lot of money by people just not paying there debts off,but that is what they are all about. The more we are in debt the more they can charge.