The maximum amount of money that a single commercial bank can lend is equal to its excess reserves.
If a bank lends out all of its excess reserves, it can be expected that those excess reserves will soon be lost to other banks. this illustrates why banks cannot safely lend beyond their excess reserves.
The amount that a commercial bank can lend is determined by its: excess reserves. a commercial bank can expand its excess reserves by demanding and receiving payment on an overdue loan.
A money multiplier determines the limit to which a single bank can increase the money supply. across the banking system, you can add up to 10x the original currency multiplier.
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