Criticisms
Criticisms of fractional-reserve banking and proposals for monetary reform have been discussed from time to time. Critics have included economists such as Irving Fisher and Frank Knight. U.S. Congressman Ron Paul and Austrian School economist Murray Rothbard have identified fractional-reserve banking, central banking, and fiat currency as interdependent and destructive features of modern monetary systems. In Rothbard's analysis, the practice of fractional-reserve banking amounts to a form of fraud, embezzlement or legalized counterfeiting. Rothbard advocated return to a strict 100%-reserve gold standard and abolition of the Federal Reserve, the U.S. Mint, and the Federal Deposit Insurance Corporation, among other reforms. Rothbard was critical of alternative reforms put forth by economists Arthur Laffer and Friedrich Hayek.
Read more about this topic: Fractional Reserve Banking
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