Fractional-reserve banking
Fractional-reserve banking is the system of banking under which banks that take deposits from the public keep only part of their deposit liabilities in liquid assets as a reserve, and lend a percentage to borrowers, thus increasing the money supply by the loaned amount.
Connections1
the process through which commercial banks expand money supply
Through fractional-reserve banking, commercial banks create money by lending out a portion of their deposits, which significantly expands the total money supply beyond the base currency.