PHILADELPHIA -(Dow Jones)- U.S. Federal Reserve Chairman Ben Bernanke Thursday said the Fed is focused on getting banks to lend to small companies by urging its examiners not to cause lenders to be too conservative.
The main problem faced by small firms, which play a key role in an economic recovery because they help create jobs, is likely to be obtaining credit, Bernanke said.
The Fed chief said the central bank's examiners need to "strike the right balance:" without going back to 2006, when loans were made on terms that were too easy, they must avoid going to the other extreme where it's too hard to get credit.
Bringing down unemployment will be crucial for the U.S. economy and "one of the keys to that is going to be overcoming the constraints on credit that small businesses face," Bernanke said.
He was speaking in a question-and-answer session on rebuilding local communties after a visit to Philadelphia's Navy Yard, a sprawling area in South Philadelphia that's being transformed into a business center.
The Fed's first-quarter survey showed earlier this month that, although improving, bank lending remains tight.
Copyright 2009 Dow Jones Newswires
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