[nly]

In the modern system S&D is controlled by commercial banks and regulated by the central bank via the central bank rate.

Any bank could go rogue and lend money below central bank/base rate, but because all other banks can "earn" free money at the central bank at base rate this opportunity would instantly be arbitraged away.

Likewise market forces for borrowing are determined by the risk premium on top of base rate, with competition for borrowers arbitraging away opportunities for risk takers (lenders).