Anything other than full res. banking is inflationary

If a bank makes loans with insufficient reserves this is liable to cause inflation... especially when there is deposit insurance. The problem with deposit insurance is that it encourages banks to make loans which are not fully backed. They are encouraged to practice fractional reserve banking which means they have less than full reserves. If there is not full reserves (and no bank run) then banks are creating an excess of currency. Inflation is caused whenever it is possible for a bank to practice fractional-reserve banking. Banks cause inflation if they are not full reserve banks.