Debt forgiveness, does it make business sense?

If that’s a 25 year loan (again in simple interest terms) your talking over €200,000 total cost to the lender. Would it not make absolute sense for that lender to write off €100,000

Where will I stash my cash?

The reason is a matter of logistics. When you deposit your money with a bank they do several things with it. Firstly they usually invest in, but secondly they usually use their investment as security for a loan