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| That is an accurate description. The upper limit to loans in a bank is restricted by the capital level of the bank. In aggregate, banks in the US are under loaned. A bank would rather loan money than buy a security with excess deposits, but the loan must be acceptable. National average loan to deposit ratio is around 73%, banks want more good loans.
So right now the real limit to money creation in this sense, pragmatically speaking, is not even capital levels of the banks but credit quality of the prospective borrowers.
Money creation ebbs and flows with the health of the borrowers. Fiscal deficits with QE can cause direct money supply growth. Central Bank changing overnight rate does it indirectly as lower rates qualify more borrowers to get a "yes" when looking to borrow.
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How money is created
