U.S. bank lending fell marginally during the week after the failure of First Republic Bank, data from the Federal Reserve on Friday revealed. The bank, which was acquired by JPMorgan Chase & Co, was the United States’ second-largest single bank failure.
Commercial bank lending declined by $15.7 billion for the week ending May 3. This comes after lending increased by $41.9 billion the previous week. On an unadjusted basis, however, loans and leases were up slightly.
Deposits also declined on a seasonally adjusted basis for the week ending May 3. Without adjustments, however, they were up by $67.3 billion.
This data comes after a Fed report revealed that nearly half of U.S. banks have tightened terms on their commercial and industrial loans for medium and large businesses in the first quarter.
Using a report known as an H.8., economists and policymakers have been monitoring loan and deposit data to gauge the overall stability of the banking sector. The divergence between adjusted and unadjusted data has made it challenging for them to draw conclusions.