There is a long standing misunderstanding about what actually limits the amount a bank can loan out. In (very) rough strokes there are 3 big limits to loan amounts.
- The reserve ratio. This is the amount of reservable (read deposited) cash that is required to be held by the bank in cash equivalents compared to the amount of deposits on their books. This is typically (for instance in the US) a regulatory capital requirement of a central bank to its member commercial banks. But note its only a second order limit on what the bank can loan out as the loans (or investments, or CDS' or bitcoin) on the books are not part of the equation. What this _really_ does is increase the cost of capital of deposits, making them more expensive for the banks to use for other activity. Prior to the pandemic many types of reservable deposits already had 0% ratios and the headline amount was 3%. This is the _least_ important limit on bank balance sheets for loans.
- Another is the regulatory asset:liability capital controls. Banks can be subject to many different regulators, and they all have a variety of balance sheet rules (and those rules encompass many other things like risk processes and other operations) but always banks must keep more assets on the books than liabilities. But! Thats not a stop to lending, because loans are assets, instead thats to ensure depositors are made whole. The stop to lending is the actual balance of assets is also regulated. Those balance of assets are scored both against market risk and credit risk. Too many loans on the books without enough cash will blow those limits up and get them in trouble with their regulators.
- The loan to deposit ratio. This is explicitly what it sounds like, the amount of money loaned compared to the amount of money deposited. In the US this is not actually part of any regulatory regime limiting the amount a bank can loan*. Instead it is a market based limit that the owners (investors/shareholders) of the bank keep track of to understand how liquid the bank is and how safe the bank is as an investment. This is important because depositors have senior claims in the case a bank goes belly up. Currently, investors look for a .8 loan to deposit ratio. During the pandemic the industry was sitting at around .6, which is one of the reasons the Fed removed the reserve requirement. They wanted banks to put more deposits to use in lending so they made it cheaper to do. Banks with high loan to debt ratios very frequently go out of business so have extremely expensive fund raising costs, therefore its something they take pretty seriously.
If you are curious what the lending amounts look like in practice, the last number is probably the easiest to understand and get access to. As I said, the industry sits well below 1:1 on loans to deposits. You can find some that approach 6 to 1 or even sometimes higher but those are typically distressed banks. The central bank reserve requirement is much more lenient than that and always has been.
* Loan to deposit ratios are a part of some regulations about bank size, but only as benchmarks.