Treasury Secretary: U.S. gov´t to support small banks

WASHINGTON, May 13 (Xinhua) -- The Obama administration will use repayment proceeds expected from large banks to support additional capital infusions for smaller banks, U.S. Treasury Secretary Timothy Geithner said Wednesday.

"Using the proceeds of the repayments we expect to receive from some of the largest banks, we plan to re-open the application window for banks with total assets under 500 million dollars," Geithner said in remarks to the annual meeting of the Independent Community Bankers of America.

The window for applying or reapplying, and the deadline for small banks to form a holding company to participate in the program will be open for six months, according to the secretary.

Of the more than 8,300 banks in America, 92 percent are small or mid-sized banks, with assets below one billion dollars.

"Community banks have accounted for more than one third of the dollar volume of loans to small businesses -- the businesses which in turn have accounted for the majority of new jobs created annually over the past decade," Geithner said.

At a time when many Americans have lost faith in the financial system as a whole, a recent Gallup poll found that 69 percent of customers have a lot of confidence in small and medium size banks, he said.