Actually every single bank loan is credit creation. This is the big open secret and also the much bigger problem with Stamp’s challenge. Ending credit creation means changing how every single bank in existence treats loans on their books.
Discussion
Right. I'd be in favor of a 100% reserve requirement. I might be okay with allowing banks to engage in fractional reserve lending as long as there were strict laws (maybe constitutional prohibitions) against bailouts. Let banks stand or fail on the basis of their own policies, and let consumers take on the level of risk they think is appropriate.