Reserve requirements don't really control lending in the West anymore. The main determinant of whether a bank will issue a loan is whether it thinks the loan wi

Reserve requirements don't really control lending in the West anymore. The main determinant of whether a bank will issue a loan is whether it thinks the loan will be profitable. The main constraint on bank lending is capital reqirements - i.e. the ratio of the bank's liabilities to its assets. The 'money multiplier' might have been a decent description of the banking system 100 years ago, but it's basically a myth these days.