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Commercial banks "feed booms (1) and starve recessions(2)"

The Quantity Theory of Money (QTM) says MV=PY
M = money supply
V = velocity (how many times money exchanges hands in a year)
P = price level (GDP inflator is useful)
Y = Real output (how much stuff was created)

So... changes in M effect P and Y
Remember that PY=nominal GDP

1) Banks feed booms
A boom is when Y (real output) increases.  When that happens, M increases which then causes P to increase.  This causes inflation.  Countercyclical monetary policy was developed (not present during Reunification) to decrease M when Y is increasing to avoid inflation.  The Fed basically does the opposite of what the market would do to avoid inflation.

2) Banks starve recessions
Recession is a decrease in Y.  Banks lend less during recession, so M decreases.  To counter, the Fed decreases interest rates and expands M.  Like 1, the Fed didn't exist so this was a problem.