Category:

Banking

Date:

1999-04-14 08:30:41

Subject:

Cash Reserve Ratio Falls at Credit Union

Comment:

I received this on April 13. It may not be representative, but you should look into this if your bank or credit union publishes the figures.

* * * * * * * * * *

I bank at [x] Federal Credit Union (OCTFCU), which is the nation's [y] largest credit union. Since December I have been obtaining copies of the credit union's monthly income statement and balance sheet.

Here is the cash reserve ratio over that period:

December 1998: $1.46/$100

January 1999: 1.34/100

February 1999 1.29/100

March 1999 .91/100

Look at the month to month variance, especially from February to March. In one month the bank lost 28.6 percent of its cash. (Customers withdrew a net $7.344 million in cash.) If this trend continues at the present rate, which is an optimistic assumption, the vaults will be EMPTY on June 14, 1999 at 4:13 p.m. The Fed has about two months to rush that Y2K cash to the banks, or else the bank panic will begin.

-- Jon Johnson (narnia4@usa.net), April 14, 1999

Answers

Do these stats imply at some point in the near future the credit union will begin to call in loans made?...are they able to borrow at the fed's "discount window" or is that just for federal reserve regional banks?

Any bank smart folks out there?

-- Mike T. (anita_martini@the.ranch), April 14, 1999.

I'll repeat my standard comment: When was the last time you saw a $5 that didn't look as though your cat had spat it up? Most $1 bills around here are pretty seedy also. I think it was Gary's "piggy bank" item that stated that $1 and $5 bills are in the shortest supply. I think we are seeing signs of that.

-- Brooks (brooksbie@hotmail.com), April 14, 1999.

Gary's "piggy" article was an amazing eye-opener. Link, anyone?

-- moi (not@thistime.com), April 14, 1999.

Calling in loans wouldn't solve the problem. When was the last time that you made your loan payments in cash?? Not to mention paying off the whole balance in cash!

-- Craig (craig@ccinet.ab.ca), April 14, 1999.

Here is the piggy story...

http://www.garynorth.com/y2k/detail_.cfm/3570

-- br14 (coin@piggy.bank), April 14, 1999.