Meredith Whitney is back with an op-ed in the WSJ warning of the dangers to the economy if small businesses continue to be deprived of oxygen, or, more specifically, capital.
If banks are not allowed to effectively price for risk, they will not take the risk. Right now we need banks, and particularly community banks, more than ever to step in and provide liquidity to small businesses. Interest-rate caps and interchange fees will more likely drive consumer credit out of the market and many community banks out of business.
Beyond that, she’s particularly interested in the re-start of the securitization market.
Unless real focus is afforded to re-engaging small businesses in this country, we will have a tragic and dangerous unemployment level for an extended period of time. Small businesses fund themselves exactly the way consumers do, with credit cards and home equity lines.