Tight monetary policy affects banks' ability to lend more when the Federal Reserve takes direct actions to limit bank loans, rather than just through interest rate changes. Evidence from postwar periods shows that banks can still lend even when reserves fall, unless the Federal Reserve uses special requirements or controls to restrict lending. Federal Reserve actions have a big impact on the types of external finance available and the interest rate spread between bank loans and commercial paper, without needing a bank credit channel to explain these changes.