1) Yes there is, that is why it is called fractional reserve, they are allowed to expand the money supply based on a fraction of the reserve deposits they take

1) Yes there is, that is why it is called fractional reserve, they are allowed to expand the money supply based on a fraction of the reserve deposits they take in. This number is set by the FED in the case of the US. 2) Yes you can with the proper licensing and certifications. It's not as easy as hoping on down to the division of banking and picking up your license, there are some pretty stringent requirements, it's not cheap to start a bank.