There seem to be two reasons inhibiting the banks from extending credit: first, a high weighted-average cost of funds because of high interest rates on deposits; and second, concerns about credit quality, which makes the banks risk averse, particularly in lending to certain segments.
For a more recent summary of the role of banks in the monetary transmission mechanism, see Peek and Rosengren (2013). Chaney, Sraer, and Thesmer (2012) provide evidence for the collateral channel of real estate for corporate investment, while Mian, Rao, and Sufi (2013) examine the influence of household balance sheets on consumption.