George Selgin’s claim that fractional reserve banking has survived “long periods, without suffering any crises” is a joke. The various cars I’ve owned over the last 40 years have “survived” without being involved in an accident. According to Selgin logic, that proves car insurance is not necessary.

In contrast to the periods when banks have had no problems, there have been HUNDREDS of bank failures in a fairly regular basis ever since banks first set up, which was certainly centuries ago, and possibly thousands of years ago.

The basic flaw in fractional reserve is that it gives preferential treatment to one particular type of lender, that is banks, which get taxpayer backed deposit insurance and billion dollar bailouts, while other lenders (mutual funds, peer to peer lenders, trade credit lenders, etc) are not similarly privileged. For more on that point, see:

https://mpra.ub.uni-muenchen.de/99989/1/MPRA_paper_99989.pdf