Monopoly money Legal tender law Lack of convertibility Inadequate backing of money Deposit insurance Moral hazard Central banking Regulation that prevents entry Regulation that prevents innovation Congressional incentives for loans to unworthy borrowers Market discipline replaced by government regulation Results: An insolvent banking system, depreciating dollar, bank crises, and recessions. Fractional-reserve is an inherent part of it, but not the central villain. With monetary freedom and free banking, there can be fractional reserving but the market will control it.