If government outlawed fractional reserve banking, we would all be better off

I know it’s a hot take saying the government could do something good, but it seems to me that even in the absence of an inflationary government fractional reserve banking would still cause significant discoordination in the market.

Probably not often to the point where you get a crash, and those crashes would be of much smaller magnitude then government-inspired crashes. As far as I can tell, fractional reserve banks by nature are always going to be creating the appearance of increased savings without the necessary corresponding increase in real savings.

I have seen the arguments that fractional reserve banks would eventually go out of business in the free market, or at least be much less competitive, but if that is the case, and we still have a government which is (in our fantasy land) perfectly willing to implement sound economic theory, why not just make this activity illegal? (setting aside ethical considerations)