The Fed and Small Business

American Banker had an interesting column co-written by William Isaac (former FDIC chairman) and William Dunkelberg on how the Fed has run out of tools to help small business. The most interesting part is the comment of M, who provides a succinct summary of the structural issues that need addressing, which are beyond the scope of what the Fed can do with price: policy.

M is exactly right. But, a good start towards structural evolution would be to embed a quality signal in price. That is what ratings are supposed to do.