Small Banks to Close the Spigot?

UPDATED - 2/15/10

Here's a good summary from FT Alphaville on the oversight report.

The WSJ reported on a Congressional TARP oversight board report that has indicated small banks could be in big trouble from their CRE lending. Could be, as the article points out that all depends on the economy and the broader capital markets. Since we're seeing lending slowly creep back in from these smaller, regional banks, it seems limiting their ability to lend will only create bigger problems.