If only it were that simple. Turns out that, rather than being constrained by the deposits/assets they have on hand (FRB doctrine), banks will create the loans they believe they can make, then go settle up with the central bank/regulators. See, for example, (unorthodox) economist Steve Keen [0][1] on this.
Yeah, that was my greatest take away from what I've read from him. Talk about the tail wagging the dog.
The restrictions in this light almost do more harm than good since it exonerates the banks (or rather the system) and every time we have a crisis (after people have been making the big bucks for years) we treat it as mysterious and unrelated to the profits made in the 'good' times.
One of the primary responses to the 2008 crisis has been to change the regulations around capital requirements for banks and other financial institutions.
While I agree, you don't need formal fractional reserve banking to create the same sorts of crises, see for example the various US financial panics prior to the creation of the Fed in 1913 (e.g. go to the bottom of https://en.wikipedia.org/wiki/Panic_of_1910%E2%80%9311 and hit Show on "Banking panics in the United States").
It's not just fractional reserve that's the issue. Even metalists et. al. miss the fundamental issue that debt is simply a means of control. You put someone into debt to make them slaves. Debt is also the product of war. It's been toned down in the modern western world with mergers and acquisitions, but deep down it's all the same.
Read: Debt The First 5,000 Years. It's a life changing book that helps all this stuff make a lot more sense.
