Monday, March 12, 2012

Banks increasingly calling in small business loans

Welcome to the morning roundup. Here's a look at what's news in banking and finance this morning.


Calling in loans. Banks are increasingly calling in loans to small businesses in North Carolina as falling real estate prices have reduced the value of collateral, The News and Observer reports. That frequently leaves the businesses scrambling to make a balloon payment.

Buying Treasuries. Banks have bought more in U.S. Treasury bills and notes so far this year than they did all of last year, Bloomberg reports. Hesitant to lend, they're using the spread between the overnight loan rate and the Treasury rate to make money.

Stress tests to show improvement. The stress tests now being finalized by the Federal Reserve are expected to show that banks have significantly improved their balance sheets, The New York Times says, a big improvement from the tests in 2009.

Wells likely to increase dividend. Wells Fargo is poised to be among the leaders of its peers in increasing dividends and stock buybacks as the Federal Reserve finishes those stress tests, Bloomberg says. About $9 billion total is expected to be released.

Insider trading alleged. A lawyer for a group of banks involved in litigation against MBIA accuses the MBIA chief executive of insider trading, The New York Times reports. The bond insurer says the claims were false, and all of the CEO's trades were approved.

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