The leverage in banking works roughly this way (very roughly):
For every dollar that a bank takes in deposits, it has to have have roughly 8 cents of its own money (that is, capital). Capital in this case usually refers to shareholders’ equity.
So, they will probably lend out all of your deposits, but will have to have 8% of their own capital to play the game. This is the leverage, from the point of view of the bank.
If you want to read about this in more detail (there is a lot of detail – it is basically its own science), you can try:
