What If People Owned Their Own Bank Deposits?

In a provocative piece in the Telegraph, Toby Baxendale, CEO of Seafood Shipping and chairman of the Cobden Centre, explains that "in a Cobden Centre/ICM survey 2,000 people, a staggering 74 per cent of the respondents think that they own the money in their bank account. Only 8 per cent know the correct answer - that the banks owns it." Because the bank effectively owns the money, they can lend it out when they want, which expands credit, stimulating malinvestment and the business cycle. What we need, says Baxendale is not more regulation of the current fractional reserve system, but instead

What is needed is to let people own their own money, with the banks keeping it safe for those that want complete peace of mind. Let the depositor decide if the money should be lent and for what period, until it matures. Remove all political control from banking. And let's have more language of the fiduciary rather than the gambler from bankers.

LewRockwell.com recently posted Murray Rothbard's excellent article-length introduction to the economics of  fractional-reserve banking. You can be read it here.