Deep recession: Fed wants +$5 bn money supply with 10 % RR should:

Transferring reserves between banks does not create new money; it merely redistributes existing funds in the banking system. When one bank transfers reserves to another, it adjusts the account balances but does not increase the total amount of money available in the economy.

Vault cash refers to the physical currency that banks hold on-site to meet withdrawal demands. While necessary for daily transactions, vault cash itself does not create money. It is part of the bank's reserves and does not contribute to an increase in the money supply unless it is lent out or deposited into circulation.

Making loans is the primary way banks create money. When a bank issues a loan, it credits the borrower's account with a deposit that did not previously exist, effectively expanding the money supply. This process allows banks to support economic growth while maintaining only a fraction of deposits as reserves.