If banks are (legally) able to make loans with customer deposits then deposit insurance will be inflationary. Fractional reserve banking should be illegal because otherwise banks will cause inflation (and steal from savers) when they make loans. Without deposit insurance fractional reserve banking is impossible... the only valid form of banking in a free market is full reserve banking. Fractional reserve banking is impossible in a free market and with deposit insurance (as it always is) it should be illegal because of the inflation.
Fractional reserve banking (which never exists - is not possible - without deposit insurance) should be illegal. If banks have deposit insurance it should be illegal for them to make loans. Fractional reserve banking relies on government deposit insurance and should be illegal. It should be illegal for banks to make loans (to do frb) if they have deposit insurance. If frb is possible (there is deposit insurance) it should be illegal.
Fractional reserve banking should either be impossible (as in the free market) or illegal. If it is not impossible (deposit insurance makes fractional reserve banking possible) it should be illegal.
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