Banks can get reserves three ways: -From deposits. -In the interbank market, where banks with excess reserves lean to bank that need reserves. -From the Centra

Banks can get reserves three ways: -From deposits. -In the interbank market, where banks with excess reserves lean to bank that need reserves. -From the Central Bank. The Central Bank always lend the necessary reserves. A different issue is if that would be a good business for the bank. The point is that the quantity a bank can lend it's not limited by deposits as the normal narrative imply.