Bewailing the “very difficult” times faced by small business Wednesday, Federal Reserve chairman Ben Bernanke said the Fed is doing its best to alleviate the “tight” credit conditions small firms face.
Bernanke said the Fed is urging bank examiners to take a “balanced approach” to banks’ small business lending as he opened a Fed-hosted conference on “Small Business and Entrepreneurship During an Economic Recovery.”
And he exhorted banks to “do all they can” to meet the needs of “creditworthy borrowers.”
“It’s no secret that the past few years have been very difficult for many small firms,” Bernanke said. “They have faced weak sales, diminished asset values, elevated uncertainty, and tight credit market conditions.”
“Many small business owners have had to lay off employees or defer hiring,” he said. “And many potential entrepreneurs with plans to start new businesses have put those plans on hold.”
Small businesses have historically “played an important role in fueling past economic recoveries,” Bernanke said. “We need to think carefully about how, in the current economic environment, our nation can best provide small businesses and entrepreneurs with the support they need to expand job opportunities.”
“The Federal Reserve System is committed to supporting small business and entrepreneurship,” and has provided “outreach programs” to help small business owners access various government development funds, he said.
Bernanke said the Fed is using its authority as the nation’s top bank regulator to help small business.
“Through research and analytical efforts, we are working to deepen our understanding of credit market conditions facing small and new businesses, particularly the frictions that impede the flow of credit to creditworthy borrowers,” he said.
