By Karey Wutkowski
WASHINGTON, Oct 14 (Reuters) - U.S. officials may wish to create new temporary facilities to help small businesses get loans while the bank industry remains stressed and credit markets are tight, U.S. Federal Reserve Board Governor Daniel Tarullo said on Wednesday.
'More direct efforts may be needed to make credit available to help credit-worthy smaller businesses,' Tarullo told a Senate banking subcommittee.
'Congress and the administration may wish to consider temporary, targeted programs while conditions in the banking industry normalize.'
The Federal Reserve has already attempted to help the sector through its Term Asset-Backed Securities Loan Facility (TALF), which was begun in November 2008 to facilitate the extension of credit to households and small businesses.
'The TALF has had some success,' Tarullo said.
Tarullo laid out a few options, including steamlining Small Business Administration loans and creating a new program that would provide government guarantees.
'I do think that something targeted is going to be an important complement' to other programs, Tarullo said.
He said he did not have a strong view on which approach would work best, and that the Federal Reserve had no official view on the topic.
Federal Deposit Insurance Corp Chairman Sheila Bair said she also sees a need to increase lending to small businesses. She said the government could modify its Troubled Asset Relief Program (TARP) by creating a capital matching facility for small banks.
She said increasing capital at small banks would likely get more money to small businesses.
(Reporting by Karey Wutkowski; Editing by Chizu Nomiyama) Keywords: USA FED/TARULLO SMALLBUSINESS (E-mail:karey.wutkowski@thomsonreuters.com +1 202 898 8374) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, Oct 14 (Reuters) - U.S. officials may wish to create new temporary facilities to help small businesses get loans while the bank industry remains stressed and credit markets are tight, U.S. Federal Reserve Board Governor Daniel Tarullo said on Wednesday.
'More direct efforts may be needed to make credit available to help credit-worthy smaller businesses,' Tarullo told a Senate banking subcommittee.
'Congress and the administration may wish to consider temporary, targeted programs while conditions in the banking industry normalize.'
The Federal Reserve has already attempted to help the sector through its Term Asset-Backed Securities Loan Facility (TALF), which was begun in November 2008 to facilitate the extension of credit to households and small businesses.
'The TALF has had some success,' Tarullo said.
Tarullo laid out a few options, including steamlining Small Business Administration loans and creating a new program that would provide government guarantees.
'I do think that something targeted is going to be an important complement' to other programs, Tarullo said.
He said he did not have a strong view on which approach would work best, and that the Federal Reserve had no official view on the topic.
Federal Deposit Insurance Corp Chairman Sheila Bair said she also sees a need to increase lending to small businesses. She said the government could modify its Troubled Asset Relief Program (TARP) by creating a capital matching facility for small banks.
She said increasing capital at small banks would likely get more money to small businesses.
(Reporting by Karey Wutkowski; Editing by Chizu Nomiyama) Keywords: USA FED/TARULLO SMALLBUSINESS (E-mail:karey.wutkowski@thomsonreuters.com +1 202 898 8374) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.