Here's a nice description of how it works in the US: https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp https:

Here's a nice description of how it works in the US: https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp https://www.investopedia.com/articles/investing/022416/why-b... . From the link, the crux: "The reality is that banks first extend loans and then look for the required reserves later" I'm not familiar with the mechanics of the European banking system so I can't speak to that.