Banks borrow short and lend long, which is why they are inherently unstable, requiring either implicit/explicit government guarantees, or be subject to "runs" on deposits.
In the unlikely environment of no demand for loans, banks would have no incentive to take deposits (ie borrow short), so instead would probably charge fees for reducing the risk of holding large amounts of cash for their account holders.
Such a storage facility would not have the profit margins of taking on the risk of lending, I'd guess that the net effect of a "fully saturated and content" economy would be "churn" as money was moved from account to account. Given that there would be no growth in such an economy, there would also be no wealth creation. So over time, the value of the money would deflate.
If the Gini coefficient went to zero (ie equal wealth distribution), the need for money would effectively disappear. So would banks.
> Given that there would be no growth in such an economy, there would also be no wealth creation.
No, because people still need to eat, consume electricity, consume entertainment, etc. So wealth is still created. If it's a no-growth economy, that wealth is consumed at the same rate it's created.
> So over time, the value of the money would deflate.
No, it would be constant (assuming no money creation by the central bank).
> If the Gini coefficient went to zero (ie equal wealth distribution), the need for money would effectively disappear.
No, you need money as a means of exchange and a store of wealth, just like now.
I am not sure why you are being downvoted, money is just a medium for exchange of goods and services (ie. human time/work value) even if there was universal basic income you would still need a unit of measure to prevent a bad actor from taking all the resources.
In the unlikely environment of no demand for loans, banks would have no incentive to take deposits (ie borrow short), so instead would probably charge fees for reducing the risk of holding large amounts of cash for their account holders.
Such a storage facility would not have the profit margins of taking on the risk of lending, I'd guess that the net effect of a "fully saturated and content" economy would be "churn" as money was moved from account to account. Given that there would be no growth in such an economy, there would also be no wealth creation. So over time, the value of the money would deflate.
If the Gini coefficient went to zero (ie equal wealth distribution), the need for money would effectively disappear. So would banks.