<Table> <Tr> <Td> </Td> <Td> This article needs to be updated . Please update this article to reflect recent events or newly available information . (March 2009) </Td> </Tr> </Table> <Tr> <Td> </Td> <Td> This article needs to be updated . Please update this article to reflect recent events or newly available information . (March 2009) </Td> </Tr> <P> Neither commercial nor consumer loans are any longer limited by bank reserves . Nor are they directly linked proportional to reserves . Between 1995 and 2008, the amount of consumer loans has steadily increased out of proportion to bank reserves . Then, as part of the financial crisis, bank reserves rose dramatically as new loans shrank . </P> <P> In recent years, some academic economists renowned for their work on the implications of rational expectations have argued that open market operations are irrelevant . These include Robert Lucas, Jr., Thomas Sargent, Neil Wallace, Finn E. Kydland, Edward C. Prescott and Scott Freeman . Keynesian economists point to the ineffectiveness of open market operations in 2008 in the United States, when short - term interest rates went as low as they could go in nominal terms, so that no more monetary stimulus could occur . This zero bound problem has been called the liquidity trap or "pushing on a string" (the pusher being the central bank and the string being the real economy). </P>

In the u.s. the authority to issue currency is held by