Arguments for and against fractional reserve banking

This chapter explores the arguments in favor of fractional reserve banking, such as easier transactions and earning interest on deposits, as well as the criticisms against it, including association with business cycles, inflation, and economic inequality. The speakers also discuss the historical examples of fractional reserve systems without central banks and the risks of the current system without the gold standard. Additionally, they highlight the disagreements among economic minds and the issues caused by central banks in the current system.