If all people would understand this fact at the same time, we would see our system collapse one day later.
It is even worse than you might think. Only 1-2% of the total money supply is backed by cash. 98% is just numbers in a Computer.
The problem that you point out is, that if a bank has 1B in their balance sheet, they can give out loans of 10B. Money that they don't have and expect to "get back"(lol they never had it, but want to get it back) from the person who they loaned it to.
That does not mean that they have 10% cash in their vaults though...
If the money printing machines (all existing combined) tried to print 50% of the total money supply, it would take them years to print that amount...
Hehe yeah, we don't know how much cash they actually even have. It's all a numbers magic game... And the con is that yes they expect to get money back that they didn't even take from anywhere