The banks are not behaving as custodians of our money when we leave it with them on deposit. Instead, we receive a certificate of credit, and not a receipt of deposit. This is different. People think their bank account is a record of deposit and yet it is not, it if a certification that something is owed.
We no longer own the contents of our account, it is owned by the bank and we own a promise. Were the money on deposit to be retained (in ownership) by us, would it then be legitimate for the bank to loan it out without our permission? If we can suffer no loss, what reason would there be to make such a request? Does it matter who owns the deposits in a bank? Should it be illegal to reloan deposits? What difference would it make, if they are guaranteed by the State, people will take the extra interest and reduced banking charges associated with giving permission to loan. They can already use full reserve banking institutions if they wish. It is not relevant that ownership of the deposits passes to the bank.
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