Jeff Lacker: Credit markets not broken
Click here, scroll down to Mr Lacker's podcast.
He says: “My reading of current conditions is that bank lending is constrained more now by the supply of creditworthy borrowers than by the supply of bank capital.”
Clear enough, isn't it? The markets are working. Lending is down because the transactions aren't in the interests of market participants.
Same article points out that the regional Fed chairs aren't getting any votes in the current actions of the Fed. They are invited to conference calls at which Bernanke explains what the Fed is going to do next. In a way, this is Lacker (chairman of the Richmond, VA Fed) hitting back.