Deposits at all U.S. commercial banks fell in the week ended March 22 to their lowest since August, but at a slower rate than the week before, and stabilized at small lenders seen as more vulnerable to outflows after the failure of Silicon Valley Bank.
Data released on Friday by the Federal Reserve showed the $125.7 billion drop in deposits at all U.S. banks in the week ended March 22 was roughly $50 billion less than the record $174.
Deposits at small U.S. banks edged up to $5.386 trillion in the week ending March 22 from $5.381 trillion the prior week. Deposits at the largest 25 banks by assets, meanwhile, fell to $10.65 trillion from $10.74 trillion. Deposit outflows from foreign banks with U.S. operations accounted for the remainder of the week's decline.
U.S. finance officials have repeatedly said that deposit flows have stabilized following the historic run on deposits at SVB and Signature, both of which had exceptionally high levels of deposits exceeding the FDIC's $250,000 insurance limit. Despite worries among policymakers that the two failures and the upheaval they caused might instigate a credit crunch with banks recoiling from making loans, bank lending has yet to show a substantial drop except for one key business loan category: commercial and industrial loans.
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