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Savings are a vital part of the healthy functioning of an economy. The money deposited in a savings, checking or money-market fund account provides the capital that permits companies to build new factories, create new jobs and foster new prosperity. Recent inflation has undoubtedly created an attitude of buy today and save tomorrow. But the very low American level of saving has also been caused by backward financial institutions and restrictive Government regulation.
Ultimately, the clear winner of the financial revolution will be the public. Americans have not really forgotten the lessons of thrift and hard work; rather, they have learned that 5¼% interest at a time of 10% inflation is simply a bad deal. Merrill Lynch and the other innovative leaders of personal finance have shown that people will still put money aside when they are given a real reward for saving.
—By EdwardE. Scharff.
Reported by Michael Moritz/Los Angeles, Frederick Ungeheuer/New York and other U.S. bureaus
*The 459 mutual savings banks in the U.S. are located mainly in the Northeastern states, and they, like savings and loan associations, specialize in home-finance lending.