Understanding the channels through which monetary policy affects economic variables has long been a key research topic in macroeconomics and a central element of economic policy analysis. At an operational level, a ‘tightening’ of monetary policy by a central bank implies a sale of bonds by the central bank and an accompanying reduction of bank reserves. One question for debate in academic and public policy circles in recent years is whether this exchange between the central bank and the banking system has consequences in addition to those for open market interest rates. At the risk of oversimplifying the debate, the question is often asked as whether the traditional interest rate or ‘money view’ channel presented in most textbooks is augmented by a ‘credit view’ channel.1