Other countries exist.

See https://en.wikipedia.org/wiki/Reserve_requirement

Many countries don't have a reserve requirement. The US was a bit of a laggard.

Minimum reserve requirements were always a bit silly. You want your banks to have a thick capital cushion for its debt. Whether they have reserves on hand is an operational problem they can solve themselves, and doesn't have systemic consequences.

It's not really about the reserve requirements, but about basic accounting requirements, which all banks do have. At its fundamentals, bank balances are not some storage of "your money", they are recording of how much the bank legally owes you (or vice versa). And of course the bank has to know exactly what liabilities they have according to their contracts, so they need to see the balances. They also need to be able to add arbitrary quantities of new money to the FHE scheme when cash is paid in and remove it when it is paid out.

Or, more succinctly, what makes a bank a bank is that it will loan out money deposited by other people.

If the money is just sitting there and can't be moved or even counted without the owner's private key, it's not a bank, it's a vault.

>> what makes a bank a bank is that it will loan out money deposited by other people

No, a bank creates money to loan out from nothing. No deposits required.

As a sibling comment points out, other jurisdictions exist so here's the UK central bank's explainer on the topic: https://www.bankofengland.co.uk/explainers/how-is-money-crea...

but once the bank has made the loans, it has to keep track of how many it has made and how many are delinquent. i could be missing something.

Yeah of course, but that's not the point the parent was contesting. They claimed a bank loans from funds deposited which isn't the case.

If a bank chooses to create an asset (your liability) by loaning money to you, if you then fail to repay, then they're in a bad spot. They're certainly not allowed to just delete the records of the loan being issued to get rid of the delinquent asset on their balance sheet.