A report released today by the Congressional Oversight Panel advises that smaller U.S. banks may require capital infusions in the same spirit as the Troubled Asset Relief Program, according to Bloomberg. The report says that these banks may need between $12 billion and $14 billion to recover from bad loans. The panel, headed by Harvard’s Elizabeth Warren, says in the report that small banks “will need to raise significantly more capital, as the estimated losses will outstrip the projected revenue and reserves.” The report said that the Treasury should address the problems of small banks in addition to those large investment and trading houses that received $700 billion in TARP funding last year.
TARP Funds May Apply to Small Banks
The Congressional Oversight Panel has released a report recommending that small banks receive funding in order to alleviate the damages wrought by bad balance sheet liabilities.
August 11, 2009