[mo_42]

I think it helps to think how the balance sheet changes. If you deposit money, the bank has higher liabilities, they owe you that money, and higher assets as they actually have the money. So they might buy all sorts of assets with that money. However, it's not that they need that money to make a loan. That was my main point.

> The sum of deposits the bank holds are not available for withdrawl all at once. So where is it?

This only depends on the central bank being able to produce enough cash for all the people. Technically, the commercial bank will ask the central bank to swap their assets for some cash to hand it to the customers. So practically, they might not be able to give cash to everyone, just because the central banks cannot product it that quickly. But other than that there's no problem that many people can withdraw money. If customers come bank with the cash, the commercial bank will take it, give it back to the central bank, and receive their previous assets back.