Ohio's Banking Holiday of 1985

From Ohio History Central

In 1985, Ohio Governor Richard F. Celeste declared a banking holiday, to halt a rush on deposits due the collapse of the Home State Savings Bank, of Cincinnati.

Following the Great Depression, the federal government insured deposits in most banks and savings-and-loan associations. However, many states, including Ohio, allowed some savings-and-loan organizations to form that the individual states insured. By the early 1980s, many of these savings-and-loan businesses were in trouble from making bad investments with their depositors' money. In these cases, the depositors stood to lose all of the money that they had deposited in the banks.

The crisis began in Ohio when it became known that Home State Savings Bank had invested approximately 140 million dollars in a non-existent securities firm. Numerous depositors flooded the bank, seeking to withdraw all of their savings. To curb the rush upon the bank and onto other savings-and-loans in the state, Governor Richard F. Celeste declared a banking holiday for any savings-and-loans insured by the state government. He declared this holiday on March 15, 1985, and the banks remained closed until they could secure insurance from the federal government. Some of these banks never reopened, although all depositors eventually received back their money. In the case of the Home State Savings Bank, the Ohio government paid back the depositors their lost funds, costing the state approximately twelve million dollars.

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