> But as soon as the borrower actually pays that money to someone else (with an account at a different bank) then it has to come from somewhere, i.e. deposits.

> But as soon as the borrower actually pays that money to someone else (with an account at a different bank) then it has to come from somewhere, i.e. deposits. Nope, not deposits. Inter-bank settlements occur via reserves, which banks (generally) get from the central bank, but also borrowing from other banks.