I was thinking about Bernanke's argument about intermediation in the depression - this is really an argument about a real productivity shock to the banking sector. It's essentially a real business cycle theory, just in a particularly special industry - an RBC with big network effects? I'm not sure why I never thought of that before - I think "non-monetary effects" is even in the title of the paper.
Anyway, file this under "don't get caught up in labels".
6 hours ago