Money Production Process of Banks: An Animation Study on The Fractional Reserve System
Chapter from the book: Şahin, C. (ed.) 2025. Theoretical and Applied Research in Finance.

Bünyamin Er
Karadeniz Technical University
Enis Tüysüz
Karadeniz Technical University
Fatih Demir
Karadeniz Technical University

Synopsis

This study aims to explain the money creation process of banks within the framework of the fractional reserve system and to visualize this mechanism through an instructional animation. The research focuses on illustrating how money supply expands as banks create money through lending, presenting this process in a clear and comprehensible way. A descriptive and educational analysis approach was adopted, emphasizing theoretical modeling rather than statistical analysis. Accordingly, concepts such as the money multiplier, reserve ratio, and credit creation were represented through a dynamic animation model. The findings demonstrate that under the fractional reserve system, the lending activities of banks function as a key mechanism that expands the total money supply in the economy. Moreover, the use of visual narration was found to significantly enhance the comprehensibility of abstract economic concepts. This study serves as an educational material for students in economics and finance as well as for individuals seeking to understand the functioning of monetary systems.

How to cite this book

Er, B. & Tüysüz, E. & Demir, F. (2025). Money Production Process of Banks: An Animation Study on The Fractional Reserve System. In: Şahin, C. (ed.), Theoretical and Applied Research in Finance. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub876.c3580

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Published

October 16, 2025

DOI