Page 86 - BusinessWest September 1, 2021

John Howland calls the recent flood of deposits an “unprecedented” situation.
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Deposits Are Soaring, but Banks Struggle to Put Them to Work
By Mark Morris
John Howland admits that the word ‘unprecedented’ is over- used these days. But for him and others in the banking busi- ness, it seems like the right word to describe all that’s going on.
Howland, president and CEO of Greenfield Savings Bank, was talking specifically about the record
amounts of deposits flooding into banks — and what’s happening with those deposits, or not happening, as the case may be.
In the early months of the pan- demic, from January to June of 2020, banks in the U.S. saw a surge of near- ly $2 trillion in deposits. At that time, most people were staying close to home and had reduced their spend- ing to necessities.
As a local example, PeoplesBank reported deposit increases of 33% since last April, or nearly $700 million in additional deposits.
“I never thought I would say there are too many deposits and not enough people
to lend the money to. The point of our business is to get deposits ... so this goes against
”
everything we were taught.
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More deposits arrived as business-
es applied for Paycheck Protection Program (PPP) loans and con- sumers received stimulus checks from the government. During nor- mal times, money gets deposited but does not stay in an account for long. These days, however, deposits are staying and growing
to an extent Howland and his counterparts in Western Mass. have never seen before.
And while record deposits would seem like a good thing, all that
30 SEPTEMBER 1, 2021
BANKING & FINANCE
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