(Bloomberg) -- U.S. banks have gotten out of the business of providing capital to small businesses and need to be redirected toward that mission as the nation recovers from the coronavirus pandemic, Nobel Prize-winning economist Joseph Stiglitz said.
“The problem is, the banks over the last 30 years have focused their attention on things like issuing derivatives, CDSs, trading, commodities: They found a lot more lucrative ways of making money,” Stiglitz said in an interview Tuesday on Bloomberg Television Tuesday with Tom Keene and Lisa Abramowicz.
“So if we stop some of their bad activities -- market manipulation, predatory lending -- and encourage them to do what their mandate is, which is lending to small businesses, I think it would actually create much more opportunity,” said Stiglitz, a professor at Columbia University.
Slamming the stock market as a “perverse” barometer of economic success, he said workers were being left behind during the coronavirus pandemic.
“We have to rewrite the rules of the market economy,” he said. “We’ve now seen in this pandemic that an ill-prepared government is not there when we need it.”
©2020 Bloomberg L.P.