If a bank has excess reserves of $100,000, then it can lend out only up to $100,000; but if the banking system has excess reserves of $100,000, then the system can make additional loans totaling more than $100,000.

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The banking system can create more loans through the money multiplier effect, where the initial excess reserves are re-deposited and re-loaned multiple times, increasing the total amount of loans beyond the initial reserves.

If a Bank Has Excess Reserves of $100,000, Then It