News

US banks boost ATM cash as gov't default looms

October 4, 2013

As a precaution against a possible loan default by the U.S. government and ensuing consumer panic, U.S. banks are stocking ATMs with extra cash.

One bank executive said that ATMs were being stocked with up to 30 percent more cash; and at least one large FI is also stocking up its vault.

Financial Times found that some of the nation's largest banks are taking the same approach they used in the government shutdown of August 2011. Cash withdrawals increased during that shutdown, which resolved without a default.

The FDIC guarantees deposits up to $250,000, however in the case of a default, uncertainty about the future might cause panicky citizens to withdraw large sums of cash out of fear that their money could become unavailable.

To keep things calm, FT reported, FIs are making sure ATMs are filled and are also extending free overdrafts to government employees and social security recipients.

Read more about vault cash and cash management.