Over the past year and a half, however, the Federal Reserve has greatly expanded its provision of liquidity, establishing facilities under which we  BIS Review 40/2009  1  auction term funding to banks on a secured basis, provide liquidity to primary dealers and money market mutual funds, and supply credit to issuers of commercial paper.
It is also well known that much expenditure, especially by the private sector, is financed through borrowing from the banking system. Hence the Bank determines the growth rate in bank credit that would be consistent with a low and sustainable level of inflation.