Deposits at U.S. banks fell sharply, and lending declined by the most in nearly two years, amid financial turmoil triggered by the collapse of several banks last month.
Commercial bank deposits dropped by $125.7 billion in the week ended March 22, marking the ninth-straight period of declines, according to data released Friday by the Federal Reserve. At domestically chartered banks, deposits fell $84 billion, reflecting a decrease at the 25 largest institutions. Deposits at small banks increased.
Overall lending fell by $20.4 billion, the most since June 2021, due to a decline in commercial and industrial loans. Residential and commercial real estate loans, as well as consumer lending, increased from the prior week.
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