CASHMERE — Small community banks — like Cashmere Valley Bank — that had nothing to do with the excesses of big Wall Street firms that led to the finanical meltdown are now paying a price they protest is unfair.

Community bankers find themselves under tighter scrutiny from federal regulators. They say the $700 billion financial bailout has favored large institutions. And they are upset about a special assessment the government wants to charge to shore up the Federal Deposit Insurance Fund, which failed banks are draining.

"We've run a successful, safe financial institution," Ken Martin, president of the Cashmere-based bank said Tuesday. "Those of us who were responsible and still exist are getting hit with those huge premium increases. And at the same time they're giving these huge bailout amounts to the Citigroups."

In 2007, Cashmere Valley Bank paid about $89,000 in 2007 in premiums to the FDIC, the federal entity that insures bank deposits.

This year, it expects to pay $1.35 million in premiums, plus an additional $900,000 to $1.8 million "special assessment" needed because the premium increase still won't be enough to shore up the FDIC.

"The small, community bank is just being hammered with these huge premiums," Martin said. "It's huge. That's like 25 percent of our 2008 earnings in increased premiums."
http://wenatcheeworld.com/article/20090501/NEWS04/705019920/-1/WEATHER?Small-banks-say-they%E2%80%99-re-paying-for-big-bank-failures

The Fed’s quarterly senior loan officer survey revealed that 39.7% of banks tightened credit standards for businesses, 5.7% considerably and 34% somewhat with the balance unchanged. 65% of banks, up from 45%, said they lowered credit limits to either new or existing credit card customers. About 55% of the banks, somewhat more than the previous quarter, said they raised minimum required credit scores on credit card accounts.
http://www.ritholtz.com/blog/2009/05/feds-loan-survey/

Warren Buffet is on CNBC this morning, and said that the economy is very slow and getting slower.
http://www.trivisonno.com/mondays-trading-5409

Well well well Senator Durbin:

"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."

Now that had to be uncomfortable.
http://market-ticker.denninger.net/archives/1006-Senator-Tells-Truth-Whos-Listening.html

WASHINGTON – Regulators have told Wells Fargo & Co. it may need to shore up its finances after government "stress tests" showed the bank would have trouble surviving a deeper recession.

Wells Fargo is one of several banks that regulators said would need larger buffers to protect them against possible future losses, according to two people familiar with the matter who spoke on condition of anonymity because of the sensitivity of the process.

The initial stress test results were revealed to the banks last month. Wells Fargo has until Tuesday to convince officials the results were mistaken and that the bank does not need to adjust its finances.

Wells Fargo spokeswoman Julia Tunis Bernard declined to comment.
http://news.yahoo.com/s/ap/banks_stress_test_wells_fargo;_ylt=AvPPJiTCee7lsBIHQyUqWMus0NUE;_ylu=X3oDMTJ2a2JtbDdvBGFzc2V0A2FwLzIwMDkwNTA0L2JhbmtzX3N0cmVzc190ZXN0X3dlbGxzX2ZhcmdvBGNwb3MDNQRwb3MDMTIEc2VjA3luX3RvcF9zdG9yeQRzbGsDd2VsbHNmYXJnb2Fz

From February...

Two smart and meticulous financial analysts - Reggie Middleton and Mish - argue that Wells Fargo is insolvent.

In yesterday's update to his June 11, 2008 analysis, Reggie shows that the lion's share of Wells Fargo's assets are in mortgages in the California, Florida and Arizona markets, which are all tanking. He concludes:

Wells Fargo has an impaired balance sheet. Marking mortgage assets ANYWHERE near what they are worth results in insolvency.
http://georgewashington2.blogspot.com/2009/02/wells-fargo-is-effectively-insolvent.html

WASHINGTON (AFP) — China, wary of the troubled US economy, has already "canceled America's credit card" by cutting down purchases of debt, a US congressman said Thursday.

China has the world's largest foreign reserves, believed to be mostly in dollars, along with around 800 billion dollars in US Treasury bonds, more than any other country.

But Treasury Department data shows that investors in China have sharply curtailed their purchases of bonds in January and February.
http://www.google.com/hostednews/afp/article/ALeqM5i4estRSYeFBIII9kezxnP4jgoGZQ

BRUSSELS (AP) -- Deepening the economic gloom in Europe, the European Union admitted Monday that its previous forecasts were way off the mark. It now predicts "a deep and widespread recession" across the continent and says unemployment among nations using the euro currency will rise to a postwar record of 11.5 percent in 2010.

The new forecasts expect the economies of the 27-nation EU and the 16-nation euro-zone to shrink by 4 percent this year -- more than double a January estimate.
http://finance.yahoo.com/news/EU-says-eurozone-jobless-to-apf-15120412.html