This isn’t good news for the prospects for a sustained economic recovery in the United States from the pandemic recession of 2020.

The 25 biggest U.S. banks reduced their total loan portfolios by 8% in 2021 through March from the same point in 2020, according to the Federal Reserve’s latest weekly survey.

A sustained recovery needs banks to increase lending. And you can bet that Fed officials are tearing out their hair and asking themselves what they need to do to get banks to stop sitting on reserves and to start making more loans. The Fed is unlikely to cut back on its own monetary

Total loans fell by $447 billion to $5.45 trillion, Fed data show. Had the largest U.S. banks maintained their lending level of this time last year, they’d have made an additional $1.37 trillion of loans in 2021.

What the Fed figures show is that banks have plenty of money to lend–they’re just not doing it. Total deposits, which provide the funds that banks have to lend, at these 25 largest banks jumped 16% to $10.13 trillion. The combined loan-to-deposit ratio at these banks now sits at 53.9%, the lowest reading in 36 years of weekly Fed data.

Loans across the U.S. banking industry now comprise less than half of their total assets.