Prior to the United States Federal Reserve, we had a system of banking which somewhat resembled free banking, but was not really, (many laws on books preventing branching, and other restrictions etc.). Free banking has been successful in countries like Scotland and Sweden in the past. (1716-1845 and 1830–60,1860-1902). What's bad about it? I know that many would say that it can result in liquidity crises, but free bankers, and many free banking economists, have always been supportive of option clauses which would spread liquidity between banks to prevent bank runs, panics, and liquidity crises.
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