The Newest Surge: Deposits
2008 Throwback or Temporary Growth
The COVID-19 situation, currently termed “the Great Lockdown,” has created a unique operating environment for institutions of all sizes. Deposit growth is currently outpacing loan demand in the industry, leaving many ALCO’s re-evaluating pricing and liquidity strategies as we approach the mid-year mark.
Recent headlines announced that the personal savings rate balances in the U.S. almost doubled in one month from $1.3 trillion in February to $2.2 trillion in March. Deposits at commercial banks have increased over $1.5 trillion since the start of the pandemic. The combination of unprecedented governmental response and stimulus—coupled with reduced consumer spending driven by both fear and national-stay-at-home orders—have pushed the personal savings rate to the highest levels we have seen in over 30 years. Most consumers have rightly bolstered their personal liquidity position to deal with a situation our great-grandchildren will most certainly study in their U.S. history classes in the years to come.
From the Editor
With Memorial Day upon us, thank you to all current and past military members and their families for your service to our country, as well as everyone on the frontlines battl