It’s unlikely to catch on as a slogan for the ages, but for financial firms ranging from Merrill Lynch & Co. to Associates First Capital Corp. to Silicon Valley Bancorp, 2000 might well be remembered as the year of the balance sheet.

Much of the short-term work has been on the credit side, with banks reworking loan and securities portfolios to offset the effects of higher interest rates. The longer term may show that the most significant shifts occurred on the deposit side.

The biggest financial companies — not just banks — showed a renewed dedication to building up deposit bases and flaunted them as a strategic asset. In the space of a year, the U.S. bank deposit line on Merrill Lynch’s financial statements surged to $38 billion at the end of the third quarter, from $5 billion a year earlier, with $19 billion of the additional funds registered in the third quarter alone.

Much attention has been paid to the stresses insured deposit growth may place on the Federal Deposit Insurance Corp.’s reserve levels. Observers have also taken note of the competitive implications of offering consumers FDIC insured accounts in tandem with brokerage and money market accounts.

Of at least equal interest to competitors is what Merrill intends to do with its newfound low-cost funds.

“Obviously, part of the advantage is the flexibility it gives us to finance other parts of our business,” said James Wiggins, a Merrill spokesman. Specifics about where the money will go are evolving, he said, adding, “We have an enormous global capital markets organization” that could use the funding.

Nor has Citigroup Inc., where Salomon Smith Barney is about to deploy a sweep account program that will pull up to $600,000 of funds per customer into insured accounts, been specific yet about where it plans to deploy the funds. There are some figures that make for interesting math, however.

Assets under management in SSB Citi Asset Management’s retail money market accounts totaled a whopping $83.7 billion at the end of the third quarter. While no one thinks all those dollars will shift to bank deposits, there has already been some talk that a figure of $50 billion is eventually attainable.

Consider in that context Citi’s pickup of Associates. Here, nearly all the attention was focused on what Associates brought to Citi, such as its well-developed consumer finance business in Japan, where Citi has long coveted market share.

A look at Associates’ own balance sheet shows there were some compelling benefits for the other side, too — beyond the premium Citi paid for the business. Associates, not surprisingly, relied heavily on debt financing for its operations. The acquisition, therefore, served as an easy way for Associates to trim the cost of the roughly $77 billion in debt on its balance sheet at the end of the third quarter, as it will assume Citi’s higher debt ratings when the deal closes.

If, as some believe, Citi plans to deploy some of the new deposit base as a funding vehicle for Associates — the effort, obviously, does not have to be announced or direct — the combined Citi-Associates would garner an even bigger competitive edge among consumer lenders.

The trend is hardly confined to retail. Executives at Bank of America Corp., for example, have stated publicly more than once that they intend to limit the extent to which they will allocate capital, and that they will direct more of their balance sheet to higher-paying customers. Such comments have mainly been aimed at persuading commercial customers to send B of A more investment banking business.

Customers are turning the theme to their own benefit. Several of the nation’s largest corporates, such as Ford Motor Co. and AT&T Corp., have apparently insisted that their investment banks also offer them credit lines.

For investment firms — whose attitudes toward the relatively low-margin business of credit lines is not unlike the distaste banks have thus far shown for insurance underwriting — the news is unwelcome.

Were the practice to become widespread, it would place banks in a much more powerful competitive position to win the kind of lucrative — albeit more risky — business so many have craved.

Of course, all of this represents more than a bit of turnabout. Years of outsized stock market gains eventually left fewer dollars around for low-yielding deposits, a trend that had many banks looking for ways to attract funding.

One year of stock market malaise has turned the tide. Even Silicon Valley, which rode the technology boom to remarkable growth, has been forced to admit it needs to redouble its deposit gathering efforts. That admission, by the way, sent its stock tumbling more than 20%.

Not that Silicon Valley is worried about earnings. The company expects to hit estimates for the quarter and says its credit quality is just fine. But in the year where the bull market finally succumbed, and the balance sheet reasserted itself as the leading indicator of choice, a decline in deposits was enough to make investors shudder.

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