As you are well aware, the Federal Reserve has taken significant steps to improve financial market conditions, and has worked with the Treasury and bank and thrift supervisors to strengthen U.S. banking organizations. We remain attentive to the need for banks to remain in sound financial condition and to continue to lend prudently to creditworthy borrowers.
Loans to small businesses are especially vital to our economy, as they employ nearly 40 percent of the private sector workforce. First, I will discuss the overall state of small business lending and address the causes of reduced lending to small businesses.