Actually I think he's right. See page 18 (page 5 of the PDF), which explains what actually limits how much money banks can lend. Their need to earn more than they pay in interest is a fundamental part of it: in the longer term banks need to attract enough deposits to cover their loans, which may mean increasing the interest they pay to depositors, which in turn constrains their lending due to their need to earn more than they pay out in interest in order to cover their other costs and hopefully make a profit. (It's quite a lot more complicated than this summary, of course.)_