The Financial Bailout Fiasco

WASHINGTON -- The Treasury's bailout plan is fueling a long-simmering war between financial institutions, prompting fears among small banks that big banks getting rescue money will be encouraged to buy smaller rivals.

Big banks say the purchase of smaller, ailing institutions by larger ones promotes the recovery of the sector. But representatives of some 8,000 community banks -- the bulk of which remain financially sound -- worry that a taxpayer-subsidized consolidation could sweep up healthy institutions that are too small to fight back.
Small banks said they will launch a lobbying assault on Capitol Hill.
"It will be a battle royal from day one in Congress" next year, said Camden Fine, chief executive of the 5,000-member Independent Community Bankers of America. "The one part of this system that has functioned well has been the community banking system...We're going to be screaming every step of the way."
Bank Money to U.S. House Cash Flow
Source Wall Street Journal

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