US bank lending contracted by the most on record in the last two weeks of March, indicating a tightening of credit conditions in the wake of several high-profile bank collapses that risks damaging the economy.

Commercial bank lending dropped nearly $105 billion in the two weeks ended March 29, the most in Federal Reserve data back to 1973. The more than $45 billion decrease in the latest week was primarily due to a a drop in loans by small banks.

Innovation in high net-worth lending is primed to be a new frontier in credit.  Rarely do opportunities exist to make waves in lending, but this is one.  Banks and wire houses are conservative and working on traditional lending models that limit borrower options for untapped equity in multiple forms of assets.  There is also a wall between consumer and business lending units so most banks cannot take a holistic approach to a business owner’s business and personal assets.  Several groups working together can, but this takes time, adds complexity and still has its limitations in a regulatory and traditional banking environment.  Coincidentally, both commercial lenders and wealth managers are starting to converge on this space and each other’s turf by changing their offerings.