The banks are momentarily paralyzed because their solvency is uncertain and their underlying capital is frozen. The liquidation of bad debt will happen eventual

The banks are momentarily paralyzed because their solvency is uncertain and their underlying capital is frozen. The liquidation of bad debt will happen eventually, but the Fed just wants to inflate at all costs. When liquidation starts to happen, all this money will flood into the real economy, with the multiplier at full throttle. Instead, the US Government and Fed should have allowed the liquidation to happen, preferably sooner than later. In our timeline, we get both frozen credit (and collapse) and inflation. In a better scenario, we would have gotten just a sudden collapse, with faster recovery.