If you eliminate fractional reserve banking, you’re eliminating banking as we know it. You’re left with bank time deposits.
And I bet even then you wouldn’t really eliminate the possibility of bank runs. Any bank that was rumored to be in trouble, would have people showing up trying to get their time deposits back earlier than agreed.
But a lot of capital would be setting on the sidelines, unable to earn interest because their owners aren’t willing to commit to a timeframe.
Again, where has this scheme worked. Didn’t the Austrian school actually try this in Austria for a short amount of time before it was abandoned?
I'm not aware of,or even if there is such a thing as a Austrian School bank, but an era that I would consider more Austrian( ish ) would be America from it's discovery, up to the founding of the Federal Reseve( with the exception of the Civil War ).
We had basically free banking. Although most banks were state chartered banks. It wasn't centralized and we had US God dollars as a bench mark. I think that was our best period, all considering.
Look at that era's phenomenal, real,physical growth in real, physical capital. In population,in internal improvements, in cities built, wealth, increase in living standards and quality.
Now, many of our once great, productive wealth producing centers( cities ) are tax consuming, welfare spawning, pension debt centers. Zombie cities, kept alive by financial shenannagans. Even state now, take California, Michigan, Illinois. Those were once states so wealth creating, that we named battle ships after them. Now productive people and companies of productive people flee them.
Non of this AT THIS SCALE would of happened in the pre Federal Reserve banking system. These companies, states would of been spanked, hard.
I guess we now live in a era of Self Esteem Government where every one is equal.