Are Greek Banks About To Charge For The Privilege Of Banning €500 Bills?

Tyler Durden's picture

Officials would have you believe that all of this talk about banning cash is nonsense - a myth likely perpetuated by fringe bloggers or else by Austrian economists in the early stages of dementia.

The problem, however, is that we get more signs that cash is on the way out each and every day.

Take Larry Summers, who reckons it might be time to get rid of the $100 note in order to “make the world a better place” (the idea being that only criminals transact in high denomination notes). There’s also Citi’s Willem Buiter, and the German Council of “Experts” Peter Bofinger, and Harvard’s Kenneth Rogoff, and the list goes on. In fact, just yesterday we learned that Sweden will likely be completely cashless in the short space of 5 years.

As mentioned above, there’s always this amorphous notion of fighting crime built in there somehow as if the world's central banks recently adopted a Batman mandate to go along with price stability, but the real reason is, and always will be, simple: controlling citizens’ economic decisions. Or, put a little more harshly: stripping depositors of their economic autonomy.

Do away with cash and you can set rates as low as you want them. People not spending enough to get the economy moving? Well to hell with those people - set interest rates at -30%. You can bet they'll start spending then. Economy overheating? No problem, jack interest rates on savings up to +20% and watch the personal savings rate rise.

One of the most high profile cases of a looming cash ban is the ECB’s call for the elimination of the €500 note. Draghi, of course, says it's "not about reducing cash." Which is proof positive that it is. Here's what we said last month: 

Recall that the €500 note is the second highest currency denomination in G10, after the CHF1,000 note. More importantly, the total value of €500 notes in circulation amounts to €306.8bn and has been rising as shown in this BofA chart:

Furthermore, as a share of the value of total euros in circulation, the €500 note is the second-highest, after the €50 note.

In other words, if overnight the €307 billion worth of €500 bills were eliminated, the notional value of the entire amount of European physical currency in circulation would decline by 30% to €700 billion!

Well on Sunday we got an interesting tip from a reader with the following attachment:

That's from Piraeus Bank and it can be found here under this table:

Note that 5.9 (where this appears) is apparently a new line item - or at least it wasn't there last month:

While we're not entirely sure what this means in the context of the elimination of the €500 note, we wonder if it's possible that the ECB is going to try and charge citizens for turning in their high denomination bills, thereby making a profit off the €500's "retirement"? 

As a reminder, Greeks who stored €500 notes at home "rushed to deposit the money in their accounts" once the ECB made it clear it was considering doing away with the big bills.

Just look at it as a repo for everyday depositors: post your €500 notes as collateral, take the haircut, get smaller bills in return. 

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zeroaccountability's picture
zeroaccountability (not verified) Mar 6, 2016 7:55 PM

It seems every article has to re-hash the last 10 articles before coming up with anything we didn't already know.

Oftentimes, even THAT is largely speculation.

Give me meat and potatoes, I'm tired of reading the same old content over and over.

Nutsack's picture

They could always just start shooting the thieves right between the eyes.

mkkby's picture

The key to reading ZH articles is to quickly skim through all the useless rhetoric, run on sentences, and re-hashed old content. 

Usually the last couple of sentences is some speculative comment.  Occasionally it is some new fact. 

williambanzai7's picture

Let us assume for theoretical discussion only, that there are a handful of people who do not spend every spare minute reading Zero Hedge articles. For those people, when they eventually stumble in, a bit of repetitive background information would save them a great deal of time and research/Google aggravation would it not?

Dragon HAwk's picture

Yeah people forget we get new blood in Here.

which is a good thing, the more people who read the words Paper gold, banksters etc the better

OverTheHedge's picture

For any newbies here today, ZH is simple:




(I've always wanted to do that!)

Flankspeed60's picture

ZACKLY! I'm not blonde, but I am a bit slow. Some of us newbies still need flashcards and 'See Jane Run' to get the full measure of the econospeak spoken here.

Thanks for stickin' up for us Banzai!

zorba THE GREEK's picture

You ain't been Greeked until you been "GREEKED" and then you find
It uncomfortable to sit on a wood bench. We are all about to be Greeked
Unless we finally wake up grab a pitchfork and some strong rope and get to work.

Joe A's picture

Well, on the MSM you would not read this at all. Perhaps once if you're lucky. But it cannot be repeated enough: the war on cash is a war on humans.

BarkingCat's picture

It really is a war on your life force.

You expend that and you only have a limited capacity.

What they are doing is not only stealing it from you but also preventing you from storing the excess without incurring unnecessary costs.

zjxn06's picture

Gives new meaning to the term "bank robbers".

38BWD22's picture



For now I'll be happy to take €500 notes.

Publicus_Reanimated's picture

Reminds me of an SNL skit, except now it's the First CityWide Shortchange Bank.

knukles's picture

SNL used to be funny.   And that one was great! 
We'll give you 100 pennies or 20 nickles, or 10 dimes.....
Which was done because Citibank (I was in NYC banking there when it happened) stopped making change for people.  Yes, stopped making change!  WTF?  So SNL took off on 'em and within a week, all had returned to a "Citibank" normal, meaning fucked up for the client.  One of the most hostile places ever invented.

zero_wedge's picture

Far worse criminals transact in digital dollars.

TradingTroll's picture

In 1988 Canada released a newly designed $1000 note printing about 3,000,000 before the gubmint decided it would begin retiring the notes. Bank tellers are supposed to keep them if they come in. In the 16 years since printing  stopped in 2000 about 1,000,000 notes still circulate. You can buy them on ebay for $1300. I guess the Canadian  government  doesn't want to try too hard. It could buy them off ebay. But if Piraeus  Bank thinks they can charge a fee them might get a surprise. It's the citizens  who decide what is legal tender not the gubmint.  Looks like max downside is about a 30% gain as you can possibly  sell the note as a collectible. Then again, aside from the collectible  value, maybe 30% numismatic  premium is a good price to pay for some anonymity and...err. optimization  strategy.


East Indian's picture

"It's the citizens  who decide what is legal tender not the gubmint."


"Looks like max downside is about a 30% gain as you can possibly  sell the note as a collectible."

Amen. India "demonitized" five thousand rupees notes in 1978; a lot of people threw them away, fearing tax raids. Now those notes are collectors' delight, selling at Rs one million each. even after adjusting for the inflation it is more than its face value!


BarkingCat's picture

any individual that pays over par for fiat note, especially 30% premium, is a fucking retard beyond words.

There is no such numismatic value for a piece of paper that has 1 million known copies in existence.

For that much face value exchange your fiat into gold or other precious metals.

A82EBA's picture

righ, id rather take a haircut via premiums on pm purchase and still hold an unencumbered storage of labor value

nmewn's picture

€500 note has what value again? There is more ink & paper contained in a common

#BarbarousRelics ;-)

asteroids's picture

The problem with fiat is that the government at any time can print as many as it wants and  your 500 Euro won't buy a souvlaki. Gold and Silver, not so much. So do you hoard pretty plastic money or precious metals? Hard choice.

zorba THE GREEK's picture

Not a hard choice but the only choice to protect your wealth .

Yes I know you were sarcing.(new word) just agreeing with you

zorba THE GREEK's picture

Just looked up your tenure, you make me feel like a ZH newbie and you don't seem jaded, that's refreshing.sorry I can't up vote you more than once
But I get the feeling that doesn't matter to you.

Urban Redneck's picture

Most around here denigrate democracy as nothing more than mob rule. Yet if one lived in an actual democracy, and the Central Bank tried shit, the "mob" could go the polls and demand the bankers' heads on polls.

There's a reason your moral and intellectual superiors (and the elitist oligarch founding fathers) have been trying to instill fear of democracy in the minds of the untermenchen for centuries... and convince the Plebes that they would be much better off to leave such matters of justice and reform to said "moral and intellectual superiors"... which leaves people begging (literally) for pitchforks when the shit finally hits the fan...

Socrates was sentenced to death by a jury of 501 ATHENIAN CITIZENS (i.e. moneyed, white (olive) skinned males) out of a city population of under 20,000 such citizens... 2,400 years and we're still paying the price for Plato's grudge and propaganda.

Dragon HAwk's picture

If you study Karma, it's pretty simple, about 1 week after they ban cash, all electronics will go down, and you won't be able to buy shit on Sunday..  Talk about unintended consequences. we know it's going to happen, if they are too stupid to know what would happen, then well we don't really want them in charge.. Oh Wait, 

joego1's picture

They will fuck with every knob that they have, (or will invent), on their way to being a footnote in a really painfull economic history lesson.

Omega_Man's picture

why have cash when the MIC can get you into stocks?

NoBillsOfCredit's picture

Gold and silver money mean that the power is in the hands of the people. debt based money created by a central bank means that the power is in the hands of the banksters. Those who perpetrated this fraud and continue it are traitors to the Constitution and the American people. They can't force you to work for Federal Reserve notes. so when they ban FRN cash we work for something else.

Sweet Cheeks's picture

Will the war on cash be as successful as the war on drugs?

Kirk2NCC1701's picture

As I've mentioned before, this is an OPPORTUNITY for certain countries, to do the very opposite:  Issue large currency notes.

The CHF, CNY, and HKD come to mind, to increase Market Share: issue notes equivalent/comparable to $1,000 to $10,000 Notes.

Debugas's picture

Soviet Union before its collapse retired highest denomination rubbles (100 rub banknotes) by simply declaring them null and void.

what some people did was the day before go to the post office and send themselves the money by depositing 100 rubs banknotes and next day receiveing 50 rub banknotes from another post office

DutchR's picture

If i google translate it reads,

Top of the page: INVOICE PURCHASING & value date




#5.9    large denominations swaps (€ 500 & € 200) in smaller and value coins


But it's still al greek to me... 

Johnny_is_already_taken's picture

Even better:

Ban 500 euro notes overnight

Give citizens 1 month to exchange their notes

Everyone with more than 100.000 euros in notes only gets them exchanged if they prove where the money came from


Theonewhoknows's picture
Theonewhoknows (not verified) Mar 7, 2016 1:36 PM

First create crisis (2008 meltdown) and impoverish nation to turn them into economic slaves living off your credit - then be angry at them as they get back at you with opening doors to migrants you thought will be cheap labour for your economy cos (here is the kicker!) your demography is in the gutter!!! Well done Germany! Well Done! and all this was forseeable!