Read it and learn, maybe you'll better understand how banks work. They don't make money up out of the thin air. They can loan out only in proportion to what they have already. BOA is levered about 9 to 1, so they use around $11 from investors or retained earnings and $89 in deposits and loans from the fed or others to be able to loan out $100.
Now, they can create demand deposits to make new loans, but even then in proportion to their equity. Some of the Deposits liability is likely Demand Deposit line item created from loans, not sure how much. But it appears they support their loans with mostly customer deposits and invested funds.
But I read in several places that smaller banks had 0% reserve requirements. Also since covid-19 liquidity crisis, the Fed lowered it to 0% for all banks. So this ratio of 9 to 1 is outdated and the liquidity crisis proved to us that this 9 to 1 ratio was not sustainable to begin with.
The small banks were the ones printing money out of thin air. A lot of that newly printed money just happened to find its way back to the big banks due to corporate centralization of capital but it wasn't enough.
You can't understand how the financial system works just by looking at the biggest banks... You have to look at all the banks in aggregate and see how the new money flows into the system.
The fact is that new money which was printed and loaned out of thin air enters the financial system faster than interest accrues on all the old loans which were themselves printed out of thin air at an earlier date.
If you're a central bank and you created your own unique currency out of nothing (which is precisely what they did) and loaned 100 units of it to some people at 10% interest over a 1 year term... How will they be able to repay you back 110 units of the same currency considering that there are only 100 units in existence? Not possible. The only way it can happen is if you keep constantly injecting new loans into the system and the credit from the new loans ends up paying for the debt and interest of the old loans.
Banks have not been reserve constrained in at least a decade, the 0% reserve requirement is a red herring. Other countries have had 0% reserves for a long time. Banks are constrained in lending by regulatory capital requirements (see Basel III), stress test requirements (in the US), and their own risk tolerance.
https://www.sec.gov/ix?doc=/Archives/edgar/data/70858/000007...
Read it and learn, maybe you'll better understand how banks work. They don't make money up out of the thin air. They can loan out only in proportion to what they have already. BOA is levered about 9 to 1, so they use around $11 from investors or retained earnings and $89 in deposits and loans from the fed or others to be able to loan out $100.
Now, they can create demand deposits to make new loans, but even then in proportion to their equity. Some of the Deposits liability is likely Demand Deposit line item created from loans, not sure how much. But it appears they support their loans with mostly customer deposits and invested funds.