Loans aren't created out of thin air. They are created out of deposits

Banks create money by making loans, but this process is not in any way constrained by reserves, deposits or a money multiplier. Banks do not need deposits to make loans. The idea that banks somehow lend out grandma’s savings is propaganda. Instead banks simply create money via accounting wizardry. When a bank approves a loan they simultaneously create a deposit in the borrower’s bank account and voilà new money is created. Banks do not function by lending out deposits. Instead the act of lending creates more deposits. This is the reverse of the sequence taught in almost all economic textbooks.  Banks create deposits at will.

Economic texts often state that banks are constrained by reserve requirements. This is a lie. There does exist a number called reserve requirements. However, if a bank needs more reserves these reserves are simply supplied to meet this demand. Depending on the country this is done either directly by the central bank or via interbank lending at interest rates that are suppressed by the central bank. The theory of the money multiplier is false. In reality there is a reserve multiplier. Central bank reserves are increased by a percentage of the amount money banks choose to create.