[Armisael16]

All of the money the bank gives out comes from deposits or shareholder capital. The bank isn’t the mint; it isn’t allowed to print money.

The way that banks expand the money supply is by providing the illusion that all my money is there and available while at the same time being loaned out to someone else.

Fractional reserve banking means that banks don’t have all their deposits in hand. It does not mean that they invent cash for loans.

(The distinction here is less obvious in a digital world, but it’s quite clear if you think about how it would work if physical cash was used)