That’s called the ‘money multiplier model’, and it’s a popular but incorrect model. Banks lever capital (paid up shares and retained profits) to create money f

That’s called the ‘money multiplier model’, and it’s a popular but incorrect model. Banks lever capital (paid up shares and retained profits) to create money for loans, not deposits. Existing deposits are funding for interbank settlements (for transfers). The amount of reserves the bank has doesn’t actually affect lending one bit - it does affect liquidity but most countries don’t even have reserve requirements because banks can just borrow reserves from other banks or the lender of last resort (central bank) if they need to. The main bank regulation now is capital adequacy ratios.