Yes, the only moral thing was to let banks compete with same terms as the other companies do. You know, it is considered fraud, if you sell something you don't have, eg. banks are doing with their fractional reserve deposits.
Fraud requires deception. Nobody thinks the bank takes their money and locks it in the vault.
Well, if their current account contract says that you can withdraw any amount anytime, and they do not possess the capability of making good of such a promise, it IS fraud.