Fractional Reserve Banking

I don’t understand how any libertarian can oppose fractional reserve banking (and very few do). With fractional reserve banking, two parties voluntarily enter into a contract that results in both parties becoming better off. The bank provides a free service and thus acquires cheap funds it can lend to others. The depositor gets someone to hold her money so that the money can be conveniently used when she makes a purchase. There is no deceit since depositors know that their money will be lent out. Sure the bank profits off the depositors’ money, but that’s how capitalism works - as long as no coercion is involved.

To say that fractional reserve banking is immoral is like saying, as Marx did, that capitalism is immoral because capitalists profit at the expense of their workers. What Marx didn’t really understand, however, is that the workers are made better off because of the opportunity to work. If depositors would be better without fractional reserve banking, banks would form that would promise not to lend people’s money. Of course, banking services would no longer be free, and I doubt the bank would find many customers.