By Charles Mead & Dakin Campbell

Deposits at U.S. banks exceed loans by an unprecedented $2 trillion as the threat of a slowing economy tempers borrower demand and lenders preserve tightened standards.

Cash deposited at firms from JPMorgan Chase & Co. to Bank of America Corp. expanded 8.7 percent this year to a record $9.17 trillion through Dec. 5, Federal Reserve data show. That outpaced a 3.7 percent gain in loan assets to $7.17 trillion. The gap between what banks take in and lend out has surged since October 2008, the month after Lehman Brothers Holdings Inc. collapsed, when loans exceeded deposits by $205 billion.

U.S. consumers paring debt loads and banks tightening lending practices that fueled the credit bubble in 2007 are limiting the reach of the Fed, which has sought to spur spending by holding its benchmark interest-rate at almost zero for four years. The low rates are limiting investment options, making savers content to hold their cash at lenders, according to Royal Bank of Canada’s Gerard Cassidy.

“Borrowers are still de-leveraging, so the demand is not at the level it would be in this part of the recovery,” Cassidy said in a telephone interview. “That combined with the low-rate environment has led to this unintended consequence.”

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