Can Commercial Banks Create Money Out of Thin Air?

Commercial banks don't lend out reserves. Instead, they simply create money out of thin air when they make a loan. Some guests say that ce causes institutions to go out on the wrist curve. But nobody is forcing anyone to sell their bonds. So why not just keep the bonds and earn the coupon instead of selling to the fed and going out on the risk curve? A great question. The answer is, yes, you can, if you would go and create a bank. And you could then capitalize it and make loans, and you could create money. It's even more difficult to become a bank yet in Canada.