They are wrong. This was not about fractional vs full server banking. They are also wrong about what how fractional reserve banking works. The Swiss initiative (that I voted on an rejected) was only that the central bank would have to full control, it did not force 100% reserve banking.
Woods and Murphy follow the Rothbardian school and that is a minority even among Austrian Economists. If you want to see a more modern Austrian-Chicago critic on that, I would recommend George Selgin.
Are you saying that individual Swiss banks are currently free to make up their own reserve requirements? In the American system, as I understand it, the Federal Reserve (the US central bank) sets reserve requirements which the banks must follow. I thought this was how the Swiss system worked also.
If the Swiss central bank already sets reserve requirements, what would this proposal do?
> Are you saying that individual Swiss banks are currently free to make up their own reserve requirements?
No, but bank lending is not made from customer deposits or bank reserves - lending occurs first, then reserve requirements are met afterwards. See for instance this research paper from Standard & Poor's:
Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves
Eliminate the reserve requirements, which would no longer be required because banks would not hold client’s on-demand deposits on their balance sheets at all. They would be held on the central bank’s balance sheet.
Woods and Murphy follow the Rothbardian school and that is a minority even among Austrian Economists. If you want to see a more modern Austrian-Chicago critic on that, I would recommend George Selgin.