Is Schwarzman Right That "Uncertainty" Hurts Small Biz Lending?
Stephen Schwarzman took to the WaPo op-ed page this morning, to argue that regulatory uncertainty is to blame for the contraction of bank lending to small and mid-sized businesses. This matters, he says, because a failure to reverse the trend would equate to a reversal of economic recovery. He writes: "These uncertainties, taken together, have severely hampered the ability of banking executives to plan how to run their businesses or even know what their businesses may include. Predictably, bankers are reacting to this unprecedented uncertainty by becoming conservative and cautious. The result is that there is less lending and less credit available." Schwarzman positions this message as coming from bank bigs themselves,many of who probably shared a banana or two during the recent World Economic Forum in Davos. And I don't doubt it, nor Schwarzman's assertion that continued lending declines could freeze what he terms an "incipient revival of the global economy." But here's what I don't get: Why doesn't that same uncertainty apply to large-market bank lending? Big buyout bosses -- including Schwarzman colleague Tony James -- have been saying for months that debt is available and that leverage ratios have returned to
