How bank makes loans only up to the level of excess reserves

Reference no: EM13204167

In a multibank system, an individual bank makes loans only up to the level of its excess reserves, while the whole commercial banking system can lend out money that is a multiple of the original bank's excess reserves. Why is there this difference?

Reference no: EM13204167

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How bank makes loans only up to the level of excess reserves : In a multibank system, an individual bank makes loans only up to the level of its excess reserves, while the whole commercial banking system can lend out money that is a multiple of the original bank's excess reserves. Why is there this difference..

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