In the US, there are no reserve requirements on lending and there haven't been for several years, so clearly there's some other constraint. If banks could just spend arbitrarily out of thin air, why wouldn't each bank just buy every real asset in the world?

When the bank lends out money at a particular interest rate, it still needs the interest payments to cover its operating expenses. If inflation is outpacing the interest rates, then the bank will be operating at a loss.