Read More about FED action - More Liquidity to kickstart Commercial Mortgage-backed Securities under TALF
Commercial real estate woes will take a toll. Cracks in these loans are just appearing as leases are allowed to lapse when tenants go belly-up or seek cheaper digs to survive the recession. Commercial mortgages account for 23% of assets on average for banks valued at less than $100 billion versus 7% for bigger institutions, according to Foresight.
And higher Federal Insurance Deposit Corporation (FDIC) assessments will sting, taking a bite out of banks' precious capital cushions. "Last year, we paid $8,000 for FDIC insurance," says Terry Jorde, CEO of CountryBank USA in North Dakota. "This year, we could pay up to $150,000, and that takes away from our ability to lend."