If short-term interest rates (primarily the target Fed-Funds rate) are close to zero the impact of more bank credit and more money creation through open market purchases remains.

FORBES: 'Quantitative Easing' Is A Toxic Phrase for a Routine Policy

Raising the rate of interest paid on excess reserves can make new bank loans less attractive, thus tempering overall credit creation.

ECONOMIST: Quantitative easing

According to this theory it is the artificial lowering of interest rates and creation of excess credit by a central bank's monetary policy that causes investors to erroneously believe that economic conditions are better than they actually are, leading to an abundance of overconfidence.

ECONOMIST: Thailand and the Rohingya

In this market, however, the chancellor is signalling that the unwillingness of banks to provide new loans - as demonstrated by the shrinkage of credit creation, even with the benefit of subsidised funding from the Bank of England through the Funding for Lending Scheme - is merited.

BBC: Should the Treasury take housing risk?