Fed Chairman Ben Bernanke on Friday called for banks to lend more to people and businesses in low-income areas.
"Our economy is far from where we would like it to be, and many people and neighborhoods are in danger of being left behind," Bernanke said.
That's all well and good, but the reality is a dearth of bank lending is a problem for the American economy as a whole, not just for the poor. "Lending has remained stagnant or is still contracting at most U.S. banks," Bloomberg Businessweek reports, citing FDIC data.
Nearly four years after the beginning of the financial crisis, it's become apparent to just about everyone, including the Congressional Research Service, that banks were the primary (and in arguably only) beneficiaries of the bailouts and other extraordinary measures done in response to the crisis.
"That wasn't an accident; basically, it was a design principle," says Vincent Reinhart, a senior fellow at the American Enterprise Institute and a former director of the FederalRead More »from Dearth of Bank Lending is Problem for U.S. Economy