Re: "Mostly Smaller Banks Still Using Fed Discount Lending Window" [Dow Jones, June 18]: While factually correct, the conclusion drawn from the statistics cited in this story may not take into account the disproportionate impact of the bailout program.

First, the big banks received geometrically more Tarp money, and drew down substantively more money from the Fed's discount window than did smaller banks.

Second, the big banks deployed tens of billions of dollars of bailout funds in institutional trading activities which generated hundreds of millions in trading profits for those banks, but contributed no lasting value to the economy or to taxpayers damaged by the bank-caused financial crisis.

Meanwhile, smaller banks have no such trading activities and remain focused on consumers and small businesses, which are the primary engines of economic recovery.

Third, neither the Treasury Department nor federal financial regulators have required big banks to deploy their Tarp funds in lending to consumers, small businesses and smaller banks to "unfreeze" the financial markets — which was the original intent of the bailout program.

In my humble opinion, the statistics in this story highlight that by favoring big banks over the majority of banking institutions, the Treasury and federal regulators have succeeded in allowing banks that were "too big to fail" to become even bigger, and widened the gap between banks that serve consumers and small businesses and banks that serve themselves.

The time is long overdue for the Treasury to recognize that a one-size-fits-all approach to saving the banking industry is not working. Smaller banks require direct attention and assistance, and they need it now.

Withholding such direct assistance will continue to hinder economic recovery and result in the closure of more smaller banks as a result of the misdeeds of larger banks.

James Wells, President
Wellspring Consulting
Fort Lauderdale, Fla.

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