Commercial banks play a role in the process of money creation, especially under the fractional-reserve banking system used throughout the world. In this system, CREDIT is created whenever a bank gives out a new loan. This is because the loan, when drawn on and spent, mostly finishes up as a deposit in the banking system (an asset), which is counted as part of money supply (and offsets the LOAN - which has yet to be repaid). After putting aside a part of these deposits as mandated bank reserves, the balance is available for the making of further loans by the bank. This process continues multiple times, and is called the multiplier effect.