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$19.9 BILLION DEPOSIT DROP AT U.S. SAVINGS INSTITUTIONS NEARLY MATCHES ’89 RECORD

SHARE $19.9 BILLION DEPOSIT DROP AT U.S. SAVINGS INSTITUTIONS NEARLY MATCHES ’89 RECORD

The nation's savings institutions lost $19.9 billion in deposits during the first two months of 1990, nearly matching the record outflows in the same period a year earlier, the government said Friday.

Depositors at institutions still under private ownership withdrew $13.7 billion more than they deposited during January and February, the Treasury Department's Office of Thrift Supervision said in a long-delayed statistical report. Account holders at failed institutions under government control withdrew a net $6.2 billion.At all institutions, net withdrawals totaled $13.3 billion in January, a record topping the previous mark of $10.9 billion in January 1989, and $6.6 billion in February.

The two-month total fell just short of the $20 billion drain in January-February 1989. February marked the 20th deposit drain in 21 months and left the industry's total deposit base at $926.5 billion.

Economists attributed the outflow to three factors:

-Deliberate shrinkage by solvent S&Ls trying to meet stringent capital requirements imposed by last August's bailout bill.

-A cut in the high interest rates offered by failed institutions after they come under government control.

-Lingering confidence problems among depositors at failed thrifts, despite government insurance guaranteeing each account up to $100,000.

"I would expect we'll have deposit outflows for quite some time to come," said economist Martin Regalia of the National Council of Savings Institutions.