Sounds like Geithner was spot on again when he talked about the health of the banks. It's all so dreamy, isn't it? The small bank executives don't play tennis at the same club that Timmy and the big players use so it's easy to forget they even exist. Let them eat cake.
While investors have focused mostly on the nation's largest 19 banks that were the subject of the government stress tests, shares of some smaller banks have been getting pummeled since last week's rollout of the test results.
One of the reasons: the stricter capital requirements for all banks—not just the 19 biggest—may prove too onerous for some of the regional and community institutions, causing some of them to fail.
"Most of these little banks won't be able to do it," said Richard Bove, banking analyst at Rochdale Securities. "We're headed to a situation where the focus is going to be on small banks. The small banks are going to fail in, I think, pretty large numbers. I'm guessing 150."
