If economic agents wanted the additional liquidity they could have acquired it with no holding cost by selling zero-interest-rate bills and acquiring cash. Why, when the central bank initiates this change, would it affect spending, if no interest rates or asset prices were affected? 7  Bernanke and Gertler have emphasized a credit channel as part of the transmission mechanism.
But this channel – though amplifying the effect of monetary policy – seems itself to require a change in interest rates. For example, a decline in interest rates would, according to Bernanke and Gertler, reduce existing committed cash flows of borrowers and therefore make the borrower more creditworthy. This, in turn, could result in lenders offering additional credit.