Well, it's an opinion held by the Bank of England as well: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
But let's assume you understood the BoE right. My questions still stand:
> Do tell me, please: why do banks care about getting deposits? And why did Silicon Valley Bank get into trouble, when depositors left?
(And before you answer something about regulation: the regulators had willingly blessed SVB's damaged balance sheet for quite a while, and they only collapsed when depositors decided to leave.)
You might want to read the section of the pdf you linked that includes:
> So if a given bank financed all of its new loans in this way, it would soon run out of reserves.
I know about central bank reserves. It's not fractional reserve banking, though. It's basically just regulation, but regulation done in the language of money, which banks (and any 5 year old) can understand.
Banks have many reasons for attracting deposits. Not least of which to get customers "on board" such that they might buy other financial services. But yeah, they also need to stay on the right side of regulation, or not run out of central bank reserves, if you prefer to think of it that way.
Ultimately it's all fake. Whether you think of it as "reserves" (that don't really exist, of course), or regulation is up to you. It's ultimately just a bunch of IOUs but raised up about ten levels of abstraction.
Anyway, the whole thing is incredibly complex and nobody understands the whole thing. I did think the commenter was referring to fractional reserve banking, but they might have meant central bank reserves, I don't know.