Money supply

Money multiplier (Creation) = Money / Required reserve ratio

Eg. Now there is $10,000 and the required reserve ratio is 40%. A deposit this money to bank, and bank can save $4,000 ($10,000 * 40%) for required reserve and lend out the rest $6,000 to B. Then B get it and spend to C. C deposit it to bank, and bank can save $2,400 ($6,000 * 40%) for required reserve and lend out the rest $3,600 to D. D will then......, everlasting until the end. There will be totally $10,000 cash at bank, $25,000 deposit and $15,000 loan to outsiders. The $15,000 is created by the REQUIRED RESERVE RATIO, which is the increase in money supply.

If the required reserve ratio is set to 100%, that mean bank cannot lend it out. So we can conclude that banks can control and affect the money supply if the required reserve ratio is less than 100%.