Lenders: Still on the Mend


Government stress tests showed big banks need to bolster reserves. Smaller lenders are hurting, too, as explained in this edition of The Business Week

The government this week released the results of its stress tests of the nation's largest financial institutions. The tests were designed to check whether banks have the capital they need to withstand an even deeper economic downturn. The verdict: Bank of America (BAC), Citigroup (C), and others need to raise $75 billion.

Individuals hoping to grab a small piece of the action banks had to themselves are finding the lending business tough as well. Many participated in peer-to-peer lending where they connected with borrowers through services on the internet. Borrows promised to pay higher interest rates, but some didn't pay up. BusinessWeek Senior Correspondent Amy Barrett explains why this market hasn't turned out as planned.

Plus: Why Amazon's (AMZN) new Kindle e-reader may not catch on so fast, and what President Obama wants to change about corporate taxes.

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