A mistake I see over and over is conflating backing with reserves. Backing ≠ reserves.

Reserves are for managing liquidity. A fully reserved stablecoin or bank can meet 100% of possible withdrawal requests within a few days.
In practice, I think the Reservoir unwinding half a year ago is one of the only times I’ve seen a stablecoin unwind ~100% as designed.
So being fully reserved is typically seen as overkill, and usually it exists mainly to remove the temptation of an asset issuer to accept low-quality backing. You can’t engage in bad underwriting if you don’t engage in any underwriting at all.
Backing is what determines solvency. The assets may be worth a given dollar amount, but be illiquid, making them unsuitable as reserves. Real estate is a good example.
Giving out a secured loan is another. The loan may very well be worth a given sum of money, but unless that loan is very short term (e.g. repo) or you have a way to put the loan to a solid counterparty, it’s not really a reserve asset.
It should be obvious to readers at this point that fractional reserve lenders are not in any way insolvent by definition (it depends upon whether they make good loans), although they are less liquid by definition.
Crypto has an obsession with liquidity - as a lender or depositor, more liquid is always better than less - but liquidity isn’t everything.
Moral of the story is: journalists and analysts please stop calling all backing assets for a stablecoin “reserves”