Theoretical Background: Money Multipl er Fractional-reserve banking Commercial banks must keep some part of customer's deposits in an account at the central bank E.g. The reserve requirement is 10%.Then for every 100e deposit, commercial banks have to put 10E in their account at the central bank and can use 90e to buy other assetsTheoretical Background: Money Multiplier  Fractional -reserve banking  Commercial banks must keep some part of customer’s deposits in an account at the central ban k ◦ E.g. The reserve requirement is 10%. Then for every 100 € deposit commercial banks have to deposit, commercial banks have to put 10€ in their account at the central bank and can use 90 € to buy other assets