Ben Bernanke, the Federal Reserve Chairman, reassured community bankers late last week that the Fed's easy money policies will help those banks over time by helping to boost the economy, despite the fact that extremely low interest rates are eliminating their profits for the time being.
Bernanke further acknowledged that the Fed's decision to keep interest rates near zero does put additional pressure on banks' current profit margins, but he also stated that the central bank's policy is meant to help speed the economic recovery process by bringing an increase in loan demand which will ultimately help the banks.
Bernanke said in a statement that, "In the longer term, the overall effect on bank profitability of an appropriately accommodative monetary policy is almost certainly positive."
The Fed is also expected to keep short-term interest rates at "exceptionally" low levels until sometime in late 2014 in an effort to make borrowing more affordable which can also spur investment.