Fractional reserve banking means that you get more interest on your savings.
Imagine, 20 million BTC are held in a bank offering 1% interest. They stay sitting for 6 years with compound interest, see the issue?
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With fractional reserve banking, the 21 million Bitcoin in existence would equate to 200 million or so Bitcoin certificates in circulation. All banking is based on the assumption that if all depositors try to reclaim their deposits on the same day, the system collapses. Bitcoin banking will be no different.