Some economists of the Austrian school oppose fractional-reserve banking on the grounds that it is inherently fraudulent, pro-cyclical and unstable. These critics should focus their wrath on repressive financial legislation and central-bank mischief, not on a legitimate practice that encourages savings and investment.


Other Independent Review articles by George A. Selgin
    Fall 2013   The Financial Crisis and the Free Market Solution
    Summer 2011   They Stumble Who Run Fast
    Spring 2010   Central Banks as Sources of Financial Instability