Economics textbooks used to explain it that way, with a "money multiplier". That is, in the limit, if you keep lending 90% of each deposit then you'll 10x the m

Economics textbooks used to explain it that way, with a "money multiplier". That is, in the limit, if you keep lending 90% of each deposit then you'll 10x the money supply. The reality is that banks don't "shuffle around" dollars like this, they just make accounting entries in ledgers. The vast majority of transactions are between member banks, and they just use FedWire or whatever to securely move the numbers from one bank's ledger to another. If the bank needs "cash" (i.e. the numbers in the ledger are too low) because there happens to be more outflows than inflows on a particular day they just lend assets overnight or whatever.