> Or to restate, one of fractional reserve banking's key purposes is to influence the money supply. No. There were experiments with trying to influence the mon

> Or to restate, one of fractional reserve banking's key purposes is to influence the money supply. No. There were experiments with trying to influence the money supply in the past, but it doesn't work. Today, the money supply develops endogenously, that is, it is determined by potential borrowers' willingness to borrow and by banks' determination of the credit-worthiness of said potential borrowers. The central bank is tasked with making sure that the interbank clearing system works smoothly and with setting the short-term interest rate. Also, your story about how banking works today is a bit muddled. Whether Bank A can borrow those 9$ has nothing to do with how many reserves they have, but with quality of the bank's assets relative to its capital. The volume of reserves really does not have a noticeable effect on the behaviour of the banking system, mostly because, as I wrote above, it is endogenous anyway.