It takes two to tango. The players might want to control their own future and decide who to play for. They know if they play well, they'll have a lot of suitors. More suitors also generally helps their agents also with fees.
Finance is another aspect. City are notorious for not paying any portion of the wages for their loaned players. We can be like Chelsea who are buying youngsters at a rapid pace at near 30k-50k per week. However they also pay portion of wages when sending them on loan.
Take Larsson for example. He is on £15k/w per capology at Frankfurt as their player. He would likely be making more at City if he was to join. There just seems to be a "tax" for bigger teams. Hypothetically, would a team like Frankfurt (or PSV/Ajax) loan a city player making, let's say £30k a week and pay full wages or flat out buy someone and pay them ~£15k/w? If the player does really well, they know they can turn a profit for a player they own. A loan player would provide no benefit and simply return to the parent club.
Plus, PSV, Ajax, etc are more likely to play/develop the players they own rather than loan and play our players.
Savinho, for example, is a rare case because he was a CFG signing so they are easier to maneuver within sister clubs regardless of wages.
City is in a very strong spot. They can pick and choose their targets. If a unicorn does become available regardless of "need" they can pounce. Gvardiol was an example. We had Ake, Stones, Manu and Ruben at CB. However, Josko was an exceptional talent and City had no issue paying top price. Almost Real Madrid like but without the tapping up and cuntiness. City is a big club and is kinda acting like it.