Nearly 3,000 small US banks could be forced to dramatically curtail their lending because of losses on commercial real-estate loans, a congressional inquiry concluded.

The findings by the Congressional Oversight Panel as part of its scrutiny of the Troubled Asset Relief Program, point to yet another obstacle for the slow-moving economic recovery. The small banks being threatened by loans they made for shopping centers, offices, hotels and apartments represent a major cog in the U.S. credit system, especially to entrepreneurs.

Wall Street Journal