Federal Reserve Bank of Kansas City president Thomas Hoenig described the economic recovery as “abnormally slow” Monday.

A “major concern” for the strength of the expansion is the decline in bank lending, particularly to small companies, said Hoenig, a voting member of the Federal Open Market Committee.

In a prepared statement before a hearing of the House subcommittee on oversight and investigations held in Overland Park, Kan., Hoenig made a sharp distinction between increased lending by community banks and reduced lending by the biggest banks.

Community banks, he said, are endangered by the federal government’s “too big to fail” policy, which puts them at a “competitive disadvantage.”

— Market News International

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