I say somewhat different, because the Federal Reserve Bank's monetary policy and opportunities for community development are more closely related than they might at first appear. We in the Fed are well known for our strategies to promote a stable, low-inflation economic environment. I am convinced that a low-inflation environment provides the best climate for improving living standards, but it is evident that certain areas have been left behind during this time of prolonged, and rather remarkable, economic expansion. Pockets and neighborhoods within our core cities have not shared in the benefits of economic growth and therefore may well require extra attention to ensure that they too benefit as the overall economy progresses. One of the important limitations in these areas is access to capital - access that is critical to starting, growing, and maintaining successful businesses.
Bank loans are the primary source of debt capital for small businesses.
Banks traditionally have made money by making loans to businesses and consumers, so they have both the resources and the expertise to finance business creation and expansion. Partnering with bankers to accomplish community and economic development projects provides a source of capital as well as additional expertise and technical assistance to the business borrower. A local banker can be a valuable resource to the borrower and a knowledgeable partner to local government in accomplishing community development deals. These partnerships between local bankers and the MCDA are resulting in substantial community development activities in the city of Minneapolis. Even more notable is MCDA's success in leveraging private and other funding sources.