Bank of England forces bank shrinkage
Has the Bank of England lost its power, to re-work Scotty's famous line from Star Trek?
Last week it cut interest rates by 0.5%, in a coordinated attempt with other central banks to re-stimulate the global economy.
Since then, the LIBOR interest rate charged by banks for lending to each other over three months has barely moved.
And that matters, because banks set their prices for credit provided to households and businesses off that so-called interbank rate.
Or to put it another way, banks aren't passing on to us the full cut in the interest rate which the Bank of England thinks is necessary to prevent a deflationary recession.
This may be particularly frustrating for the Bank of England and the Treasury because they've been doing a sterling job, to coin a phrase, of providing loans and financial support to banks, to make up for the credit that's been withdrawn because of the seizing up of wholesale money markets.
As of yesterday, the authorities had committed - since the start of the credit crunch last August - to provide an incremental £600bn of taxpayer loans and support to our banks.
Which is just a little bit less than the net dependence of our banks on the defunct wholesale markets.
And our banks are likely to get even more financial help from the Bank of England, thanks to imminent reforms announced today of the way it provides them with loans and liquid assets.
Will this do the trick? Will banks start lending more to us and at reduced interest rates?
That's doubtful - and the Bank of England may well be seen as implicated in the way that banks are reducing how much they lend.
Well, the Bank of England stressed today that all its additional lending to banks is intended only to see them through this time of stress - and that this financial support should not be seen as a source of longer term funding to the banking system.
So if our poor battered banks don't expect a recovery in wholesale markets any time soon - and it would be foolishly Micawberish of them to count on such a recovery - then they have no option but to reduce what they lend to businesses and to individuals.
Which is why it will be very difficult to turn our super-tanker of an economy away from recession.