Squeezed Banks Slash Biz Loans

Georgian war spooked foreign investment, destabilized economy

(NEWSER) - The credit crisis has officially reached Russia, revealing just how fragile the Russian economy is, BusinessWeek reports. Stocks fell so much this week that the government today suspended both exchanges to stem further loss. But the country's reliance on foreign cash—disappearing as investors flee—is bound to affect more than stock prices. "The flight of capital has exposed the complete dearth of domestic investment," says a Russian telecom company's director of investor relations. More»

Part of Obama's proposed regulations are aimed at Goldman and its CEO

(NEWSER) - One part of the new financial regulations proposed by President Obama today could be called the "Lloyd Blankfein Act" because it's aimed squarely at Goldman Sachs and its "unrepentant CEO," writes Daniel Gross. The proposal would prevent banks from taking FDIC-insured deposits and then doing "funky algorithmic trading." As one administration official puts it, "You can choose to engage in proprietary trading, or you can choose to own a bank. You have to make the basic choice." More»

Investors see financial giant shedding year-old bank status

(NEWSER) - With the Federal Reserve busily drafting rules to limit pay for bank executives, some investors believe Goldman Sachs will simply stop being a bank, Reuters reports. By shedding its year-old commercial banking charter, acquired in the heat of the financial meltdown to ensure access to credit, Goldman could elude restrictions in the offing. But Goldman is so big that regulators are unlikely to let it slip away from Fed oversight without a fight. More»

(NEWSER) - American banks will pull in $38.5 billion in overdraft fees this year, a record sum that's largely coming from pockets of the poorest and most indebted consumers. According to the Financial Times, banks hiked fees on overdrafts and credit cards as the financial crisis took hold; this year's take will be double that reported in 2000. Some 90% of overdraft revenues come from just 10% of checking account holders, many of whom have low credit scores. More»

Trend suggests economy has a long way to go

(NEWSER) - Lending is still on the downswing, the Wall Street Journal finds, as an analysis of 15 banks' total loans on offer in the second quarter shows another 2.8% decline. What's worse, more than half of April and May’s loan volume was tied to refinanced mortgages and renewed credit rather than new loans. Banks are reining in lending to protect against loan losses, the Journal reports, and demand for loans is falling as businesses put off expansion and consumers spend less. More»