(Reuters) -Deposits at small U.S. banks declined sharply following the collapse of Silicon Valley Bank on March 10, data released on Friday by the Federal Reserve showed, marking the biggest one-week drop since 2007.
Deposits at small banks dropped $5.46 trillion, from $5.58 trillion – the biggest weekly decline ever by value and the biggest decline as a percent of overall deposits since the week ended March 16, 2007.
Borrowings at small banks, defined as all but the biggest 25 commercial U.S. banks, increased by $253 billion to a record $669.6 billion, the Fed’s weekly data showed.
“As a result, small banks had $97 billion more in cash on hand at the end of the week, suggesting that some of the borrowing was to build war chests as a precautionary measure in case depositors asked to redeem their money,” Capital Economics’ analyst Paul Ashworth wrote.
Deposits at large U.S. banks rose in the week to $10.74 trillion, up from $10.67 trillion in the week ending March 8, the data showed.
(Reporting by Ann Saphir; Editing by Jonathan Oatis and Will Dunham)