Banks need no money to lend you money

I went to my bank to get some money to by my new car the other day. I needed $4000. They told me that officially I needed to give 24 hours notice for cash withdrawl over $2,000 however they had enough today so they could give me my $4000. Now my bank is probably a bit smaller than ANZ but I found this quite startling. It got me wondering about how much money banks have in reserve.

A note about Reserve banking . Banks don't need $100
dollars to lend you $100.The US has a requirement that
the banks have to at least own equity worth 10% of the
total loans outstanding. So if Citibank only actually
owned $10 then the sum of all the loans they could
make could not exceed $100.

So I did a little investigation and what I found (with a quick look on wikipedia) concearned me somewhat. I knew that the US had a 10% requirement I didn’t know though that the UK and Australia does not require any reserve requirement whatsoever. So they can make money loaning money they don’t have. I wish I could do that. A tabe showing the reserve requirements by country can be found here wikipedia.

Castlemaine Goldrush

Background

Established during the gold rush of 1851
The Home of the Castlemaine XXXX beer

Hot Rod centre of Australia

Robert O’Hara Burke – leader of the Burke and Wills expedition, was stationed in Castlemaine as police superintendent from 1858 to 1859.

Frank McEncroe – creator of the Chiko Roll which is a sausage in batter on a stick

Climate

600 mm of rain a year (approx) which is similar to that of Cambridge (where I grew up) but less than Sheffield (1000mm per year). It is much warmer and sunnier than both though.