US bank lending reaches record slump following high-profile bank closures

U.S. bank lending dropped by nearly $105 billion during the last two weeks of March, the largest on record, indicating that financial institutions are tightening credit conditions following multiple high-profile bank collapses.

Commercial bank lending plummeted nearly $105 billion in the two weeks before March 29, with a $45 billion decrease in the last week alone, according to Federal Reserve data reported by Bloomberg on Friday.

The decrease in the last week of March was largely because small banks dropped their loans.

Banks overall also gave out fewer real estate, commercial or industrial loans.

The report also found that commercial bank deposits decreased for the tenth-straight week as deposits dropped $64.7 billion during the last week of March.

Banks are lending less money after the collapses of Silicon Valley Bank and Signature Bank earlier last month.