That's an absurd position. I realize that the bank that I use, a regional bank, loans out my money as part of its business model. And I keep an eye on its stability and it is doing well.
Right, because having access to your money is absurd. My bad.
Doesn’t the fact that you realize that it makes sense for a bank to have use of the money you aren’t using tell you that most people would be willing to allow the bank to do the same with their money, so long as they get some interest? Not everyone keeps an eye on the stability of their bank, in fact most people don’t I would gather.
Under a free market, if you were only interested in keeping your money safe, but not having it loaned out (purely deposit banking), then the bank would charge YOU for the service. Most people recognize that the bank will pay them if they give up some of their liquidity so the bank may make loans. That should be entirely up to the depositor because it is the depositor’s money.