That’s true except fractional reserve banking means the lending of those “debts” out by the bank multiple times. Doesn’t seem really like a liability in the normal sense.
> Doesn’t seem really like a liability in the normal sense
Banks borrow from depositors and lend to borrowers. Deposits are a liability in that if the bank can't pay them back, the bank's assets are seized the firm put under conservatorship (or even liquidated, e.g. Lehman Brothers).
Note that eliminating fractional-reserve banking, i.e. switching to a full-money system [1] per the Chicago Plan [2] is not a free lunch. It shifts a lot of power from de-centralised actors to the state. That, in turn, makes central-bank independence even more important [3]. (Note that implementing the Chicago Plan would maintain double-entry bookkeeping, and so the persistent Internet meme about us being in a debt-denominated economy.)
Fractional reserve banking doesn't really exist anymore. There are reserve requirements in many countries, but they exist in order to prevent the banks from holding too many liquid assets, rather than putting a ceiling on the amount of loans it can make.
But in Canada and the UK, the reserve requirement is zero.
