(Updates with panelists’ comments starting in sixth paragraph.)
Oct. 20 (Bloomberg) -- Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. is starting to recognize the significance of finding a solution to its fiscal woes.
“We are at least now beginning to engage in what the country has to do,” Lockhart said during a panel discussion today in Atlanta.
Lockhart, who votes on the Federal Open Market Committee next year, was moderating a panel before 80 people at a World Affairs Council of Atlanta event titled “American Economy in Crisis: How Should We Respond?” Lockhart said he planned to moderate the talk without “actually saying anything” as a policy maker.
The event was held at the Commerce Club of Atlanta and also featured speakers David M. Walker, a former U.S. comptroller general, and William H. Rogers Jr., president and chief executive officer of SunTrust Banks Inc.
“The importance of fiscal balancing has definitely come on the screen,” Lockhart said.
The panel discussion covered a wide range of topics, from the need for tax and regulatory reform to the need for young voters to be more engaged since the U.S. debt burden affects their generation.
‘Crisis of Confidence’
Rogers said the slow economy is a result of “a crisis of confidence,” by businesses and consumers, citing the partisan politics that gripped Congress when it grappled with the debt ceiling in August. The supercommittee charged with cutting the U.S. budget deficit provides a chance to regain that confidence, he said.
State and local governments won’t be able to count on the federal government to supplement their budgets, Walker said. Spending cuts by state and local governments “is something we’re obviously watching closely,” Rogers said. “This is a business that is fundamental to banking and one we are all keeping a close eye on.”
Lending standards are tougher, which is not unusual in coming out of a recession, Rogers said in response to a question by Lockhart. Small businesses are still struggling and large company lending business is being driven by consolidation and mergers.
“There are loans being made,” Rogers said. “Banks want to make loans. There is really only one way we make money is that is we have to make loans. While the bar may be a little bit higher, the door is wide open.”
--Editor: Gail DeGeorge, Vince Golle
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