The banks can lend but not forgive unless coerced.
Governments can create money but don’t. There are laws against doing so favoring the banking monopoly.
If government changed the laws and issued money it would reduce exposure which would ultimately benefit the banks. Yet, they would be up in arms, not because they collect interest but because they collect collateral which is generally worth more than the original loan.
Not saying it could not be done but a combination of coercion and persuasion would be required.
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