September 16, 2008

What if there is a bank run?

I had the opportunity to share lunch with the lovely Mrs. today. We were discussing the bank issues that are dominating the news. She used to work at a bank and is intimately familiar with the inner workings. I mentioned I heard a talking head say that if one was smart you would make sure you pulled out anything more than $100,000. The wife said that was all that was guaranteed by the FDIC. I asked her what would happen if several people showed up at the local branch and asked for their money. We talked about the amount of cash a bank might keep on hand.

I told her I was glad that the bank could cover our withdrawal needs from the tellers drawer if we wanted to make a run on the bank. She laughed and said no, probably from the ATM. I corrected her, the bank teller could probably cover our savings from his wallet.

Welcome to life with two kids in college.

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