[AnimalMuppet]

You seem to be defining fractional reserve banking to be fraudulent (in your second paragraph). That's not a useful perspective for trying to get real answers to your questions.

When banking was "I'll store your money for you in a safe place for a small fee", fractional reserve banking was fraud, because it was not doing what you told people you were doing, and in a way that could cost them their money. Once fractional reserve banking became the normal way banks operated (that is, became both legal and expected), it's no longer fraud. It may still be immoral and/or unwise, but it's not fraud.

Now, there was plenty of fraud in the run-up to the 2008 crisis. ("Liar loans", anyone?) But that's distinct from fractional reserve banking itself being fraud.