In real life, reserve requirements are not as correlated as demonstrated above. Reserve requirements apply only to transaction accounts, which are components of M1, a narrowly defined measure of money. Therefore they can expand without regard to reserve levels. The Federal Reserve permits banks to acquire the reserves they need to meet their requirements from the money market. Consequently, reserve requirements currently play a relatively limited role in money creation in the United States.
Reserves flow on a continuous basis between banks.
This is a result of the always changing supply and demand for these reserves at individual banks. When the Fed engages in open market operations, it adds to or subtracts from the supply of reserves. The more reasonably predictable demand for reserves are, the more effective are the actions that the Fed takes. Reserve requirements for monetary policy purposes are only changed infrequently. There is a large cost imposed on the banks equal to the foregone interest on the amount by which required reserves exceed the reserves that banks would voluntarily hold in order to conduct their business.