The reserve ratio is mostly a historical relic and is zero in many places, yet those places don't see an infinite amount of money.
This indicates that the traditional story of how fractional reserve banking causes money growth is wrong.
In reality, even a non-zero reserve ratio doesn't limit money creation if you look at the financial system as a whole, because the created money will simply become deposits elsewhere.
The true limiter of money creation is capital constraints: somebody must give money to the bank and be willing to lose it - only then is the bank allowed to make loans.
It's not wrong, it's incomplete since Basel regulation was introduced. (Although the Keynsian description you will still find in most textbooks is wrong, but that's another rabbit hole).
The two issue's with non-zero reserve regulation were (historically) the price of gold was implicitly linked to deposit expansion, and in the Bretton Woods era, all the countries had different expansion rates. Then post Bretton Woods, Basel comes in.
With Basel the Bank's risk weighted capital also regulates the amount of lending, and hence deposit expansion.
This indicates that the traditional story of how fractional reserve banking causes money growth is wrong.
In reality, even a non-zero reserve ratio doesn't limit money creation if you look at the financial system as a whole, because the created money will simply become deposits elsewhere.
The true limiter of money creation is capital constraints: somebody must give money to the bank and be willing to lose it - only then is the bank allowed to make loans.