From Mark Dow and Michael Sedacca at Behavioral Macro:
The Fed does not control the money supply; they control base money (or outside money), which is a small fraction of the broader money supply. In our fractional reserve system, the banks (loosely defined) control the other 90% or so of the money supply (a.k.a. inside money). And the banks have not been lending...
Pretty clear, about inside and outside money, and who controls what.
