The banking crisis in the United States may not end just like that after data by the Federal Reserve (Fed) shows that the situation is worse for commercial banks.
A report released on Friday revealed that US commercial banks saw their lowest drop in deposits in almost two years, while overall credit by banks increased towards the end of April.
Deposits on a non-seasonally adjusted basis reportedly fell to about $17.1 trillion in the week ended April 26 from $120 billion the previous week.
This is the lowest figure since June 2021, where deposits have now fallen by more than $500 billion from the week before the collapse of Silicon Valley Bank (SVB).
Following the massive withdrawal of deposits that occurred since the failure of SVB and Signature Bank, the situation actually stabilized until early April.
However, it rose again in the latter half of April following large outflows from the accounts as the annual tax filing season approached.
Meanwhile, deposits at big US banks slipped to $10.54 trillion from $10.61 trillion a week earlier, on a non-seasonally adjusted basis.
Also at small banks, deposits fell to $5.32 trillion compared to $5.34 trillion recorded the previous week.
Meanwhile, the banking system's total credit rose for a second week to $17.37 trillion led by an increase in loans and leases to a record high of $12.11 trillion from $12.07 trillion the previous week.
However, in line with rising interest rates, loan growth appears to have leveled off in recent months.
