Federal Reserve Chairman Ben Bernanke stepped up pressure on Monday to get banks to boost lending to the nation's small businesses, a critical element to spurring the economic recovery and reducing unemployment.

Bernanke and other regulators have urged banks since February to increase their lending to smaller companies. Lawmakers on Capitol Hill have complained that small businesses that want to take out loans are having trouble getting them. Banks have countered by saying demand is weak.

Bernanke's latest comments come as legislative efforts to jump-start small business lending have languished and the recovery has been losing momentum. He made them at a Fed conference exploring ways to help boost lending to small companies.

"Making credit accessible to sound small businesses is crucial to our economic recovery," Bernanke said. "More must be done," he pledged.

While big companies have stockpiled cash and are expected to report strong profits starting this week, small businesses have struggled to secure loans to expand and hire.

The disparity between large and small businesses has been one reason the recovery has not picked up and could even stall. Small businesses usually help drive job creation during recoveries.

They employ roughly half of all Americans and account for about 60 percent of gross job creation, Bernanke said. And newer small businesses, those less than two years old, are especially important. Over the past 20 years, these startup enterprises accounted for roughly one-quarter of gross job creation, even though they employed less than 10 percent of the work force, he added.

The Obama administration in early May sent Congress a proposal to create a $30 billion support program to unfreeze credit for the nation's small businesses. The fund would provide support to small and medium-sized banks with assets under $10 billion to encourage them to increase lending to small businesses. The legislation has yet to pass in the Senate.

Legislation revamping the nation's financial regulatory structure doesn't contain provisions to boost small business lending.

Meanwhile, many economists predict the rebound will lose strength during the second half of this year. High unemployment, problems getting loans to expand operations and hire and a new caution among consumers are among the reasons.

To nurture the recovery, the Fed has held rates at record lows. But President Barack Obama's options for energizing the rebound are limited because there is little appetite on Capitol Hill to provide new relief spending and add to the government's already bloated deficits and debt.

Lending to small businesses has declined even as the economy had improved. Lending has dropped from more than $710 billion in the second quarter of 2008, a period when the country was embroiled in a financial crisis, to less than $670 billion in the first quarter of this year.

The Fed and other regulators have urged banks to step up lending to creditworthy small businesses. Despite the push, such lending is still crimped.

Bernanke said it is hard to tell whether the problem is more reflective of banks shying away from making loans to small businesses or a lack of demand from those companies.

Business owners frequently say that the declining value of real estate and other collateral securing their loans poses a particularly severe challenge, Bernanke said. Business owners cited credit lines and working capital as their most critical financial needs, followed by refinancing products that would let them take advantage of low interest rates, he added.

Many small businesses have had to resort to borrowing through their personal credit cards or from their retirement accounts because they couldn't get bank loans.

Because each company often faces a unique combination of local economic conditions and complex relationships with customers, suppliers and creditors, the Fed, in developing any new policy options, should be "wary of one-size-fits all solutions," Bernanke said.

"Contrary to popular belief, it's not just the small firms that are struggling to survive that need these loans. It's also the small firms that are seeing growth despite the current economy," said Karen Mills, head of the U.S. Small Business Administration. "Some firms are ready to expand and hire more workers. If these healthy, creditworthy, small businesses can't get loans to help them create jobs, something is very wrong. Something is still broken," she said.

Lenders, meanwhile, say they are returning to more traditional lending standards, after a period of lax lending that contributed to the financial crisis.

Leaders from small businesses, trade groups, financial institutions among others were slated to participate in Monday's conference. It comes after the Fed has held a series of more than 40 regional meetings this year on the matter.

Getting bank lending flowing more normally is a delicate dance for the Fed and other banking regulators.

As regulators encourage banks to make loans to sound borrowers, they are also working to make sure banks get back on firmer footing after suffering through the worst financial and economic crises since the 1930s.