U.S. TREASURY SECRETARY Timothy Geithner on Wednesday called on banks that received government aid during the financial crisis to boost lending, saying limitations on credit availability for small businesses may slow the nation's recovery.

"We need banks to be working with us, not against recovery," he said, kicking off a day long Obama administration summit aimed at devising ways to strengthen the flow of credit to small businesses.

Treasury Secretary Timothy Geithner at the Small Business Financing Forum, with SBA Administrator Karen Mills, left, and Kevin Watters of JP Morgan.

"The recovery in earnings across the banking system . . . is not because the surviving banks are particularly smart and clever," Geithner said. "It's because the taxpayers of the United States and their elected representatives decided that to save the economy, we had to save the financial system."

Geithner, however, defended the rebound in bank earnings, suggesting the more positive figures are necessary for the economy to rebound. Meanwhile, Federal Deposit Insurance Corp. Chairman Sheila Bair said she expects "credit losses will continue to hold down" earnings in the banking sector.

Geithner said banks bear at least some responsibility for the financial crisis and, therefore, are obligated to help communities recover. He said the Obama administration is committed to doing more to help small businesses access the credit they need and would move as quickly as possible.

"We cannot wait until next year to see these aggressive actions," Sen. Mark Warner (D., Va.) said.

Small businesses are typically more reliant on bank financing than their larger counterparts. "When banks pull back, small businesses take the hardest hit," Geithner said.

Treasury's latest monthly survey of bank lending shows the 22 largest banks receiving government capital during the crisis tightened lending for the fifth time in the past six months, with total outstanding loan balances falling 1% in September.

Small business lending also dipped 1%, as did originations of new small business loans. Small business loans outstanding have slid by $10 billion since April, down to $259 billion in September, the report showed.

"This credit crunch is not over," Geithner said. "It may feel dramatically better for a large business, but it is not over for small businesses across the country."

Write to Meena Thiruvengadam at meena.thiruvengadam@dowjones.com