Net Cash Inflow At Thrifts Hit October High
WASHINGTON -- Cash fleeing from the stock market helped spur a hefty $6.1 billion excess of deposits over withdrawals at thrift institutions in October, the Federal Home Loan Bank Board said.</br></br>While most of the increase was caused by seasonal factors, about $2.9 billion of the cash inflow resulted from other factors, principally the stock market crash, according to James Barth, chief economist for the Bank Board.</br></br>"It looks like a search for safety," Mr. Barth said. "It shows people out there do have confidence in these insured institutions."</br></br>The $6.1 billion was a record for net deposits in October, exceeding the previous $6 billion mark set in October 1984. The influx reversed a net deposit outflow of $1.6 billion in September, which capped a $13.8 billion net deposit drain over the first nine months of 1987. In October 1986, there was a net outflow of $28 million.</br></br>Thrift borrowings also increased, by a record $11 billion in October. Mark Obrinsky, an economist for the U.S. League of Savings Institutions, speculated that much of these predated the Oct. 19 crash and the resulting cash drain from equities.