Yep, that's the reason (not the other one you mentioned), which means banks are creating money without actual assets backing it up. It's fake numbers basically created out of thin air, but that's not an issue as long as it will make money, real money, from the interest. The concept of modern banks when it was created was that this money is the receipt of actual gold you own, or the bank owns, so when you give these receipts to someone instead of actual gold (which is safer and easier) they can go and withdraw the gold using those receipts. Later, people started using these receipts instead of taking the gold and redepositing it again. Till here things are fair. Later the banks got greedy and started giving receipts for loans without having enough gold, and if someone ever decided to take the actual gold and the bank didn't have enough of it, they would borrow it from another bank, which kept banks in check because they couldn't go crazy with loans (to maximize their interest aka profit) until gold was no longer backing up those receipts (1), and banks are creating credit just because they can, resulting in an overinflated assets, especially the ones that are seen as investments with speculated values not real cost, rendering the housing market a legal state-sponsored Ponzi scheme. And the government is happy too because even after "owning" the house you still have to pay a perpetual rent aka property taxes that will increase when the house value increases as well, so everyone is winning except the home "owner", in fact, the attack on work from home was because the taxes the government collected from commercial property and residential ones are getting lower, it was good for the people to live in cheap locations, but bad for whoever is collecting the taxes.
For the last point, your deposit as a customer is in fact a loan to the bank, and the bank is your customer, but I was talking about bank loans to the account owners that they take to purchase/invest/etc., with added interest.