In a "Fractional Reserve" System banks only have to maintain a fraction of what they lend out in reserve.
When you borrow money from a bank you are literally creating new money. But don't believe me, Wikipedia is your friend.
http://www.economonitor.com/lrwray/2013/08/15/banks-dont-len...
This is one of these things that made me think what else of what I believe is not true.
If that's not it, then someone needs to explain it more clearly.
A bank that needs to lend money that doesn’t have it's going to use the interbank system in order to get "reserves" from others banks.
The idea is that the causality is inverted. Banks lend and then search for reserves. If you see it this way, you realize that there is not constrains in how much money they can lend (except how expensive is to find reserves).
Try this (maybe more clear than the other): http://bilbo.economicoutlook.net/blog/?p=14620