Banking
Ohio bank deposits increase as market falls
Official attributes the trend to people moving money out of investments.
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Tuesday, October 14, 2008
It's a tough time for banks.
Industrywide, the number of large bank loans that are weak or vulnerable to default grew last year, according to federal regulators. Thirteen banks and savings loans have closed this year. And the U.S. Congress, as part of a controversial $700 billion rescue of the financial industry, increased the coverage for federally insured accounts through the end of 2009 to help boost confidence in the banking system.
Michael Van Buskirk, president of the Ohio Bankers League, said most Ohio banks are seeing an increase in deposits, rather than a decrease. However, he attributes the trend to people moving money out of investments and into bank accounts, which have government insurance.
"I think you're seeing a flight to safety," he said. "Now, in a sense, that's an indication of the nervousness of the average consumer. That's not a good thing."
Van Buskirk said the moves by the federal government to boost the amount of money in the system will help the situation, even though markets have continued to drop.
"They're coming up with tools that I think will be of significant assistance," he said. "But what we need now is a little patience. I think we're getting close to the bottom on the stock market."
Chuck Edmonson, a spokesman for Fifth Third Bank of Western Ohio, said customers can increase their deposit insurance coverage if they structure their accounts correctly.
Contact this reporter at (937) 225-7317 or ttresslar@DaytonDailyNews.com.
