If banks are required to hold a greater amount in reserves, they have less money to:

1. Reserve requirements fix how much a bank must keep back. 2. Whatever is held back cannot be put to work. 3. If banks must hold a greater amount in reserves, they have less money available to lend out. 4. So raising the requirement tightens lending. _Source: OpenStax Principles of Macroeconomics 3e (CC BY 4.0), Ch 15 'Monetary Policy and Bank Regulation', sections 15.1-15.5_