[chii]

> thereby creating $900 of new money from nothing.

and if all of a sudden, the depositors decide to take out their $100 in deposits, the bank is in trouble, because they'd still have the $1000 in loans, which is now not backed by any reserves.

They, if this were to happen, would be required to obtain the reserves somehow - borrow from another bank, from central bank, or attract new depositors.

so in essence, the idea that the depositor's money is "lent out" is not technically correct, but the idea is not too different.