The branches of the largest foreign banking organisations (FBOs) in the US have cut their Federal Reserve balances by around 20% since the central bank began shrinking its balance sheet in late 2017.

The combined reserves of the branches of 21 FBOs stood at $360 billion at end-2018, making up around 24% of the total excess reserves held at the Fed. This is down$91 billion since end-September 2017, when branch reserves made up 21% of excess reserves. The Fed began to normalise its balance