[hidenotslide]

Apparently my answer is worse than the guy who thinks "The fed is literally giving asset holders free money" and the guy who makes a pitch for Bitcoin. Whatever. Utilize your downvote cartel however you see fit I guess.

Regardless of whether the loans are linked to individual deposits or borrowed from other banks, I was just trying to communicate how commercial banks could increase the money supply without input from the central bank. Nowhere did I claim the reserve requirement and monetary base were the limiting factor of the money supply (in fact the last sentence says supply of loans is influenced by interest rates). This is just what figure 1 depicts in the paper. The direct quote from the conclusion of the paper is "Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves."

Furthermore I claimed that central banks affect the money supply via rates, which is supported via the conclusion as well: "The Bank of England is nevertheless still able to influence the amount of money in the economy. It does so in normal times by setting monetary policy — through the interest rate that it pays on reserves held by commercial banks with the Bank of England. "