If the providers in the financial system dramatically change their behavior by significantly reducing their savings, this has the potential to:

trigger a domino effect in the economy, leading to decreased lending and investment. When providers save less, they have fewer resources to lend to entrepreneurs and consumers, which can stifle economic growth. This could also lead to higher interest rates as competition for available funds increases, making it more expensive for businesses and individuals to borrow money, ultimately dampening spending and consumption. Additionally, a drastic reduction in savings can result in reduced financial stability. With less savings, individuals may be less prepared for unexpected expenses or economic downturns. This can lead to increased dependency on credit, raising the likelihood of defaults and bankruptcies, and potentially causing a ripple effect of negative consequences throughout the financial system.