[Toddsterpatriot]

Todd, you already said that each loan was fully funded

Only because they are.

banks operate on fractional reserves.

Yes.

Fractional-reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, but is only required to hold reserves equal to a fraction of its deposit liabilities.[1] Reserves are held as currency in the bank, or as balances in the bank's accounts at the central bank. Fractional-reserve banking is the current form of banking practiced in most countries worldwide.[2]

Fractional-reserve banking

banks must keep that fraction of their outstanding loans in reserve.

No. They reserve a portion of deposits, not a portion of their loans.

[Garth Tater]

"No. They reserve a portion of deposits, not a portion of their loans."

Todd, when subject to a 10% reserve policy banks must keep in reserve assets worth 10% of their outstanding loans. So, how were these loans "fully funded" if with one million dollars of assets the bank can make ten million dollars of loans?