[lottin]

This is not how banks operate. When a bank makes a loan, the bank creates a new deposit in its balance sheet, in effect creating new money out of thin air. [1] Most of the money in circulation is created by banks in this way. This means banks don't need liquidity to make loans, because they can create their own liquidity. And, yes, the demands for loans in the EZ crashed during the financial crisis and hasn't recovered ever since, which explains the low interest rates.

[1] https://en.wikipedia.org/wiki/Money_creation#Role_of_banks_i...