This is inaccurate. Reserve requirements are not the only cost that banks have to pay for the money they create. If bank A lends $20B, and the borrower spends it to buy something from someone with an account at bank B, bank B isn't going to accept $20B of "made-up" bank A money, it'll want $20B of central bank money from bank A. If bank A doesn't have that that $20B of central bank money, it'll have to borrow it from the central bank, at the cost of the reserve interest rate. Being able to transfer central bank money to bank B is essentially what backs the money that bank A created.
(in reality some of that $20B would probably make it back to bank A as money circulates, so the actual amount of reserve money that banks have to borrow depends on more complicated factors. This also doesn't talk about what happens if the borrower defaults. But the fundamental principle remains the same, and is what ultimately limits how much money a bank can lend).
(in reality some of that $20B would probably make it back to bank A as money circulates, so the actual amount of reserve money that banks have to borrow depends on more complicated factors. This also doesn't talk about what happens if the borrower defaults. But the fundamental principle remains the same, and is what ultimately limits how much money a bank can lend).