>At 02:53 PM 5/7/2002 -0400, you wrote:
>>[Very mellow of them, though not a surprise.]
>>
>><http://www.federalreserve.gov/boarddocs/press/monetary/2002/20020507/default.htm>
>
>Yes, it's certainly no surprise considering how ineffective changes
>in the interest rate have been in affecting investment. Well, the
>business sector is really no longer dependent on lending from banks
>-- so again no surprise.
It varies, but bank lending is still important for small and mid-sized businesses, for inventory and other working capital finance. One of the reasons for the stagnation of the early 1990s was that banks cut way back on commercial & industrial loans, and bought Treasury paper instead - which was a great way to rebuild their balance sheets, but which was pretty hellish on the real economy for several years.
Doug