The Federal Reserve reported on Friday that total bank lending increased by $22.8 billion to $12.1 trillion in the week ending June 14. Additionally, total bank deposits rose by $17.6 billion to $17.2 trillion during the same period. However, deposits have fallen by $376 billion since early March.
Commercial and industrial loans, which drive the economy, also rose by $11 billion to reach $2.76 trillion. Nevertheless, this value is still lower than the peak of $2.83 trillion that was reached in mid-March. All figures are taken from the Fed’s weekly survey and are seasonally adjusted.
The possibility that bank lending could freeze up has been a concern since Silicon Valley Bank’s collapse in March. This was followed by the contagion that took down two other regional banks. The sudden turmoil highlighted the vulnerability of banks as a result of the Fed’s swift tightening of monetary policy over the past 15 months.
Fed Chair Jerome Powell told the Senate Banking Committee this week that a shock like the collapse of Silicon Valley Bank usually leads to lower lending; however, there was no evidence of it yet.
U.S. stocks finished lower on Friday, capping off the worst week since March. The 10-year Treasury yield slipped to 3.74%.
