1) Would it make speculative bubbles and thus financial crises like those in 2007 less likely than fractional reserve banking?
In the same way that taking away cars will reduce the number of automobile accidents. Most of our financial crises historically have come from panics and runs, and some countries have had institutions that handle these runs much better than others.
The gist is that banks as we currently have them are intermediates of capital. People looking to conduct business or to purchase goods that would have been hard to purchase with cash (think houses or land or something) look to loans. Banks that would be required to hold 100% of their deposits wouldn't be able to really do much. They would probably have to find other ways to make money or impose some type of holding fee. But if your point of having a bank is to provide liquidity, the policy would heavily restrict that.
2) Would it reduce business cycles as Irving Fisher argued in the 1930s?
I'm not familiar with what Fisher argued about business cycles and banking, but from the above, sure it would, again in the sense that taking away cars lowers car accidents. But we can allow government intervention (FDIC for one, having a lender-of-last-resort) to prevent bank panics and keep things in the financial system stable. So in this sense it doesn't have to be an either-or proposition.
3) Would it lead to slower economic growth than fractional reserve banking?
If you were to impose it over night, sure thing. You just cut back a lot of potential liquidity. Investment falls, GDP falls, future consumption falls. I mean, I can't comment on a world that has full banking because this isn't a really common thing. I mean, I don't know a specific policy, so it's hard to think about. Is it just imposed on banks in particular, i.e., I as an individual could find a saver-type person, take his money, and lend it? Or would it apply to all individuals + banks alike? If it's a blanket policy, then yea, 100% you kill economic growth. How would anyone even make a loan? You entirely remove the arbitrage opportunity. You'd reduce saving to pretty much glorified money holding - i'd be renting a metal box in a fancy place to physically hold my money, but not make any return on it, as it isn't being lent. Now, if the policy is just strictly imposed on banks for some weird reason, then it'd still reduce liquidity, and GDP would drop, especially if it was overnight/unanticipated, but I imagine over time there'd be ways for people to get loans. But why do this? Banks have a scaling effect that you or I as individuals don't have. What if the person we lend to cheats one of us? Do you have a law team in your backyard waiting to take a guy to court? If he says he has some form of collateral, do you have the time to actually inspect it? So here's an idea - find a group of people, pool your cash, make some loans, because you want to cash in on the arbitrage opportunity. Some of you understand legalise, some of you can inspect his collateral/monitor if he runs off to dodge payments, etc. Hmm. Kinda sounds like a bank.