However, even inflation will not be able to save the banking sector.

Do you have any evidence for this?

If I have money that I don't need right now, I may deposit it in a bank account against the promise of a fixed interest rate.

And that interest rate will be - at least in the countries where I have accounts - below the rate of inflation.

Thus, leaving the money in the bank promises exponential growth.

In nominal terms only.

In other words, your number will get bigger, but the value of that number will shrink, thanks to inflation.

Evidently, the bank must be able to reinvest my money in some business that offers a higher interest rate, i.e., faster exponential growth.

Sure - it could invest it in production that gets a zero real rate of return, which is the same as a nominal rate of return equal to inflation. Since it's paying you less than inflation, it earns money.

The only way how this can be offset is by accepting an inflation rate that equals the interest rate that the bank is paying for its investments, but in that case, the customer has no longer any incentive for depositing his money in the bank.

Would you rather lose 4%/yr or 2%/yr? Some interest is better than none.

You may believe nobody would put money in a bank at an interest rate lower than the inflation rate, but millions of people in the real world are in exactly that position right at this very moment in both Europe and the US.

i.e., your argument is based on an assumption, and that assumption doesn't fit reality. Now would be a good time to reassess your argument.

EDIT: just to be clear, your error here is in confusing nominal and real rates of return. If you get a zero nominal rate of interest there's no incentive to give your money to a bank, since you could just stuff the money under your mattress. By contrast, a zero real rate of interest is still valuable, since it corresponds to a (nominal) rate of interest equal to the rate of inflation.

You may believe nobody would put money in a bank at an interest rate lower than the inflation rate, but millions of people in the real world are in exactly that position right at this very moment in both Europe and the US.

Why should I engage in suicidal behavior, as long as there is an alternative?

It is true that at the current time, people (including myself) have some money invested at interest rates that are lower than the inflation rate, but this is a rather recent phenomenon.

Last summer (2007), I sold some stock, because I believed that the stock market would experience a period of instability, as it meanwhile has. I looked into alternate investment opportunities, and I bought some European bonds, which at that time offered an annual interest rate of 4.5%, and I bought some Swiss bonds, which offered an annual interest rate of 2.5%. At that time, the inflation in Germany was at 1.7%, and the inflation in Switzerland was at 1.2%.

In recent months, the inflation rates have skyrocketed because of the higher cost of fuel and food, i.e., I may now lose some money (in real terms) because of this.

If you look back in time, at times of high inflation, people did not put money in the bank, but rather invested in tangible goods, as they were able to protect themselves a bit better against the effects of inflation in this fashion.

During hyperinflation, people as soon as they got their paycheck ran to the nearest store to spend their money on something they could use, such as a loaf of bread.