The Fed bought securities from banks to force them to keep rates low.
Typically, this would encourage them to lend more money, increasing the money supply and boosting growth.
However, the banks didn't increase lending as the Fed wanted them to.
They simply held onto the extra credit, using it to write off foreclosures or just saving it in case they needed it.
The banks said they couldn't find enough credit-worthy people after the recession. They didn't mention that many had raised their lending standards since 2007, hoping to avoid more bad debts.