This is the exact same answer you used to get in the old days, back when real communists actually existed, and you'd ask one of them why there were no communist countries with anything like a functional economy. "Correlation does not equal causation, comrade! Just because those troubled countries are all communist does not mean that it is communism that is the cause of their troubles."

I'm just sayin', theory is nice and all, but examples from real practice are more interesting. Fractional reserve banking has been widely in use for hundreds of years in countries which have prospered far more than the general run of humanity has. Show me a capitalist economy that (1) outlawed fractional reserve banking and (2) functions better in some tangible way than the rest of the developed world, and you've got an argument more compelling than a chapter from a textbook of Austrian economics.