The problem is that nobody knows how really bad this is. For instance, if I, a private individual, asked for a loan to put money in private credit there is no way to link these two actions.

The 11% I mentioned above is the verifiable exposure for banks. It could be a much much higher number and at a time where delinquencies on all sorts of debts are historically high that for sure doesn't bode well.

The money printing that the Fed would do to fix this would be gigantic (several Trillion dollars basically) and on the same scale as the covid intervention which sent inflation to 9+%. And we are already waiting for the oil shock to spread to everything else.

Yeah, the financial system might survive, but the pensions, savings, ... will be fucked up.