However, should this additional measure become necessary, the Fed could of course always go to the Congress to ask for the requisite powers to buy private assets. The Fed also has emergency powers to make loans to the private sector (see footnote 12), which could be brought to bear if necessary.
Supervisory information based on a direct dialogue between the banks and supervisors can provide more enlightening evidence on these issues. This type of information may prove particularly relevant in times of turbulence. In the broad credit channel, monetary policy influences the creditworthiness of bank borrowers, for example, through changes in asset and hence collateral values, leading to a change in their external financing premium.