WSJ headlines and questions for January 26 2011

WSJ headlines and questions for January 26 2011 - At the...

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WSJ headlines and questions January 24, 2011. WSJ Headline January 24. Smaller Banks Can’t Get Past the Crisis The largest banks in the U.S. have had their power cemented, in many cases due to bailouts. Some are preparing to pay to pay dividends for the first time since the crisis. Smaller banks haven’t always been as lucky. Earnings growth for smaller banks is likely to be poor primarily because of poor loan growth. “Lending is the lifeblood of the American economy and the bread-and-butter business of small banks.” Commercial and industrial (C&I) loan growth at small banks have risen just 0.46% since a late-November low. Lending at large banks has grown 5 times as much since bottoming in June. A survey of small businesses in December found that 91% of them said that their credit needs were being met, or they did not want to borrow.
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Unformatted text preview: At the same time, tighter regulation and the end of the mortgage-refinancing boom are crimping fee income for small banks. Questions: 1. The article seems to suggest that large banks were bailed out in the crisis, while small banks were not. Is this true? If not, how were small banks bailed out? 2. Politicians have been claiming that a big part of the unemployment problem is the lack of supply of bank credit to small businesses? Is this correct? Is the low level of small business lending due to low supply or low demand? 3. The article seems to suggest that the main lending by small banks is C&I lending. Is this true? If not, what is the main lending channel of small banks? 4. If small banks continue to flounder, what will happen to them?...
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