Bermuda’s domestic money supply shrank by $60 million (1.5 percent) in the three months from July to September last year.According to statistics released from the Bermuda Monetary Authority (BMA), Bermuda’s dollar money supply the amount of cash in circulation and available for spending at a given time has steadily declined for the past five quarters with a 3.3 percent decrease compared to the same period in 2010.The most recent time the domestic money supply has seen growth was in the second quarter of 2010, at 0.18 percent. The statistics, however, do not include the foreign currency spent in Bermuda.The main driver of the quarter-on-quarter decrease, cites the BMA, was a 1.6 percent decline in deposit liabilities.Total assets within the banking sector declined by 0.9 percent ($228.5 million) when compared to the prior quarter, however, total assets still exceed the levels a year earlier by $1.8 billion.Cash and deposits fell by 8.1 percent ($650.5 million) while the sector’s loan book grew at a rate of 5.9 percent ($571.1 million) during the quarter. The sector’s deposit base shrunk by 0.8 percent ($163.2 million) when compared to the second quarter in 2011, though it was ahead by 10.2 percent in comparison to a year earlier.Bermuda felt the continuing the effects of the global recession the third quarter of 2011 with imports falling for the sixth straight quarter and the Island’s balance of payments current account surplus shrinking by 3.5 percent.Also revealed in the data was the extent to which Bermuda's banks and deposit companies continue to be reliant on foreign currency deposits.According to the BMA’s Quarterly Banking Digest released this month, Bermuda’s foreign currency deposits account for 82.9 percent of the Island’s total deposits.The proportion of Bermuda-dollar loans financed by domestic currency deposits, however, has increased to 147.1 percent, up from 143.2 percent the quarter prior and 5.9 percent higher than a year ago.Investment fund companies were also hit in the third quarter seeing a decrease in their net asset value of $170.36 billion or 5.82 percent from the quarter prior, though the number of registered funds increased.“In line with global trends, there was a broad-based decline in assets resulting from Q3 performance returns and net capital outflows,” stated the BMA. “The total number of funds was flat despite the negative environment, with 14 newly registered funds being processed during the quarter.”