Explain the concept of fractional reserve banking and its role in the creation of money in the banking system. A) Fractional reserve banking is a system where banks must maintain reserves equal to their total deposits. B) Fractional reserve banking allows banks to lend a portion of customer deposits, creating new money in the form of loans; this system is regulated by central banks. C) Fractional reserve banking is a system where banks lend out all customer deposits to maximize profitability. D) Fractional reserve banking is a process of creating counterfeit money by banks.

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