The main benefit of fractional reserve banking to an economy as a whole, is the velocity of money. (insuranceandestates.com)
the most truly inconvenient truth is that the world's economic system, which is based on fractional reserve banking (which essentially allows for printing money whenever a government chooses to do so, independent of any real productive value underlying the printed currency), which then requires constant growth to pay the interest on ever increasingly debt on the new «money» that is then used to create loans or government financing of whatever. (dotearth.blogs.nytimes.com)
There is no limit as to how much Credit the banking system can create through fractional reserve banking — other than the ability of the borrowers to pay interest on the money they have been lent. (richardduncaneconomics.com)