Credit contracts and loans at US banks fell last week: Fed statistics

 

Bank credit at U.S. commercial banks fell in the most recent week as commercial banks reduced lending to companies, according to Federal Reserve statistics released on Friday.

Overall bank credit declined to $17.23 trillion in the week ending Aug. 9, down from $17.25 trillion the previous week and $17.32 trillion a year ago, marking the second consecutive year-over-year decline.

Loans and leases declined to $12.13 trillion from $12.15 trillion the previous week; commercial and industrial loans fell to $2.74 trillion from $2.75 trillion the previous week. Commercial and industrial (C&I) loan growth dropped substantially from a year ago to less than 1%.

Borrower demand has slowed as a result of the Fed's quick interest-rate rises, as well as stricter credit rules and the repercussions from this year's regional bank failures in the United States.