This video starts out demonstrating fractional reserve banking as proliferation of financial contracts:
In the past when banks interacted with each other under the gold standard I think the term for such interaction is called correspondent banking. The video does not refer to correspondent or network banking as an independent social institution distinct from the evolution of central banks. So, for example, during the 1907 bank panic JP Morgan led the correspondent banking system to act as lender of last resort thereby performing the role of a central banker in the modern era. The governments instituted central banks to avoid reliance on private bankers to perform the role of lender of last resort. Also the government has the power to enforce or suspend contracts including financial contracts. So when the private bankers and other commercial lenders expand credit and debt contracts until an episode of systemic debt-default occurs due to market psychology the governments evolved public institutions to allocate the financial loss and try to reset the real economy avoiding an economic depression or great depression. During a depression the memory of the financial loss is fresh in the minds of creditors and debtors, spending goes way down, and since economic activity is driven by spending decisions of investors, governments, and consumers, using credit or government deficits at the margin, the memory of financial loss curbs spending in an economic depression.
Joe