For non-commercial / educational use only.

http://dallasnews.com/national/10748_Y2CASH26.html Year-end run on cash yet to occur, banks say Officials watching for stampede in next few days

12/26/1999

Los Angeles Times

With only six days left in the millennium, the long-feared cash-hoarding by Americans so far has failed to materialize, and banks say most of their money is still in vaults, not in cookie jars or under mattresses.

Anticipating a heightened demand for cash because of year 2000 fears, U.S. banks have more than doubled the amount of currency in their vaults during the last three months, to a record $21.4 billion. But most of it is still sitting there.

Withdrawals are up over the last month, but banks say the activity falls within the normal range they see during the year-end holiday season, when cash withdrawals typically increase between 10 percent and 30 percent.

"It's not turning out the way we feared," said Rob Haus, manager of year 2000 compliance for Minneapolis-based U.S. Bancorp. "We would have thought if there was going to be a serious problem, it would have happened by now."

Bank of America said that cash withdrawals - which typically rise at its branches about 7 percent to 10 percent as consumers shop and travel during the holidays - are up about 10 percent through this week.

"It's on the high end of what we usually see, but within the norm," said Chuck Wolski, who leads western branch operations for the Charlotte, N.C.-based bank.

But bank officials will be closely monitoring customer activity in the coming days, looking for signs of a last-minute stampede.

Government statistics released Thursday show that total U.S. currency in circulation topped $512.5 billion as of Dec. 13 and has grown over the last two months at its fastest clip since the Persian Gulf War.

Since November, currency in circulation has soared to an annualized growth rate of about 14 percent, or twice as fast as normal for this time of year. So far this month, currency in circulation has surged more than $7 billion from November, the highest monthly jump in memory.

So if Americans aren't hoarding cash, who is?

Foreign governments, businesses and citizens probably account for much of the activity so far, experts say, as Y2K concerns in other countries spur a flight to the relative safety of U.S. dollars.

"Two-thirds of U.S. currency is used overseas," said Peter Bakstansky, senior vice president of the Federal Reserve Bank of New York. "It's hard to separate what is going on domestically with what is going on overseas."

U.S. banks clearly were bracing for much higher demand at home as the new year approaches and Americans become more concerned about potential Y2K computer glitches.

Beginning in September, U.S. banks began stockpiling extra cash to prepare. Surplus vault cash - which represents the amount of cash on hand that banks feel they need to meet public demand - is three times normal limits, according to Federal Reserve figures.

"We're really no different than a manufacturer trying to manage inventory of goods," said John Beal, a spokesman at City National Corp., the Beverly Hills, Calif.-based bank.

Along with the higher cash levels has come beefed-up security at several banks, concerned they might became targets for robbery.

So cash that is not withdrawn by early January will be returned to the Federal Reserve Bank, which has printed an extra $50 billion to meet potential Y2K demand.

[ National | Dallasnews.com ]

)1999 The Dallas Morning News This site is best viewed using Netscape 4.0 or IE 4.0.

-- Lisa L. (zeaal@mindspring.com), December 26, 1999

Answers

Anticipating a heightened demand for cash because of year 2000 fears, U.S. banks have more than doubled the amount of currency in their vaults during the last three months, to a record $21.4 billion. But most of it is still sitting there.

WOW -- hmmmm - banks might not wanna advertise that ;-)

-- farf (madeupguy@hotmail.com), December 26, 1999.

Call it a hunch, but why should we believe what the bank has to say?

Got Banking Spin?

-- Billy Boy (Rakkasan101st@Aol.com), December 27, 1999.

hello... I am a bank teller for a major bank in the Midwest.. I have been on the teller line for twenty years.. I post here from time to time, but mostly lurk... I have been a GI for about twenty months after reading Scary Gary's newsletter and after the Social Security pulled the mandatory direct deposit mandate.. (that was in July 1998).. It was to have taken effect on Jan 1 1999, when I read that they had pulled it , I knew that something was wrong and it only made sense it must have something to do to the fact the computers weren;t ready.. but getting bank to the post... this information is true... if you were out to any of the malls before Christmas ,you know that is was true.. People were spending money on Christmas..We saw "pockets " of concern people taking money out, but not like I expected.. not yet...

-- bank teller (nine to five@working.com), December 27, 1999.