# A Run On The Bank



## Italia-Mx (Jan 14, 2009)

This morning, my Italian friend and neighbor knocked on my door in a panic. She lived and worked in the USA for many years and draws US Social Security retirement benefits. This morning, however, she could not access her funds because her bank was closed -- locked up tighter than a drum for at least a week. I advised her to call US citizen services at the American Embassy in Rome and gave her the number.

Unfortunately, it would make perfect sense for bank customers, who's Italian pension benefits have already been cut in order to accommodate hundreds of thousands of illegal migrants floating into Italy from a destabilized Libya, to conduct a run on some Italian banks and therefore the closures.

If that's not bad enough, Italians began to suffer financially as soon as Italy adopted the Euro in 2002. It's time for Italy to get rid of the Euro and to exit the European Union as well. Let's make Italy great again. At least we have a start with Virginia Raggi, the new mayor of Rome from Movimento Cinque Stelle already making Rome great again.


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## BBCWatcher (Dec 28, 2012)

Italia-Mx said:


> This morning, however, she could not access her funds because her bank was closed -- locked up tighter than a drum for at least a week.


Which bank? I cannot find any press reports of any bank closures or ATM lockouts in Italy.


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## Italia-Mx (Jan 14, 2009)

The problem with BBCWatcher is that he doesn't live in Italy and everything he posts with such "authority", he gets from press reports. As we all know, and as Donald Trump keeps reminding us, the press is dishonest.


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## TurtleToo (Aug 23, 2013)

Italia-Mx said:


> The problem with BBCWatcher is that he doesn't live in Italy and everything he posts with such "authority", he gets from press reports. As we all know, and as Donald Trump keeps reminding us, the press is dishonest.


Huh? I'm not seeing an answer to the question, "Which bank?" Not sure why BBCWatcher's location is relevant--the name of the bank is the name of the bank, easy enough.


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## accbgb (Sep 23, 2009)

I wouldn't be so quick to judge; Italy has tons of small banks whose failure might not be widely reported. But, just as an example, "An investor in one failed small regional bank committed suicide this month." ( Renzi seeks help for Italy’s banks after Brexit wobble - FT.com )

Not to mention https://www.google.com/#q=italy+small+banks


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## accbgb (Sep 23, 2009)

Italia-Mx said:


> The problem with BBCWatcher is that he doesn't live in Italy and everything he posts with such "authority", he gets from press reports. As we all know, and as Donald Trump keeps reminding us, the press is dishonest.


I don't want to pick on him because he is a veritable fount of useful information, but there is a degree of truth to this and anyone who follows BBCWatcher's posts knows it all too well.


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## rsetzer99 (Feb 20, 2014)

While my experience may be both local and limited, I have run into more than a couple of instances where various offices have suddenly decided to close up and have a meeting. Even going to the bank necessitated a trip to the coffee shop next door in order to have a chat up with the bank officer. After a nice coffee, we went back to the bank and did our business. Shrug. It's Italian, and there is a particular way of doing things. Seems like Italians are never in a hurry.....until they get behind the wheel of a car!!


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## Italia-Mx (Jan 14, 2009)

accbgb said:


> I wouldn't be so quick to judge; Italy has tons of small banks whose failure might not be widely reported. But, just as an example, "An investor in one failed small regional bank committed suicide this month." ( Renzi seeks help for Italy’s banks after Brexit wobble - FT.com )
> 
> Not to mention https://www.google.com/#q=italy+small+banks


Yep, you're exactly correct, accbgb. It's a small bank and my friend is an old school Italian citizen born and raised in Italy. She and her peers (more than half the population of my city) only use small banks and do all of their transactions in cash.


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## BBCWatcher (Dec 28, 2012)

Italia-Mx said:


> It's a small bank and my friend is an old school Italian citizen born and raised in Italy.


Lovely. _Which bank?_ Or, if you prefer, quale banca?



> She and her peers (more than half the population of my city) only use small banks and do all of their transactions in cash.


Cash transactions exceeding 2,999.99 euro happen to be illegal in Italy. So too are structured transactions to attempt to avoid that limit.


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> Lovely. _Which bank?_ Or, if you prefer, quale banca?
> 
> 
> Cash transactions exceeding 2,999.99 euro happen to be illegal in Italy. So too are structured transactions to attempt to avoid that limit.


LOL. There are times when you are quite amusing.

You know that is not what she is talking about. Heck, these are people that probably don't do a €2.999,99 transaction in their entire life.

No, what Italia-MX means is that most Italians write no more than a few checks per year and, for the most part, use ATM cards only to draw money out of their account. Transactions are generally cash in Italy - whether at the restaurant, grocery store, gas pump, cafe, rent, whatever - and even more so outside of the major cities.

I have little doubt that Italia-MX's friend was having her social security payments direct-deposited into her bank account and then simply drew the bulk of those funds out in cash in order to go about her daily life.


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## Italia-Mx (Jan 14, 2009)

Of course, you're exactly correct again, accbgb. Sigh.


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## BBCWatcher (Dec 28, 2012)

accbgb said:


> You know that is not what she is talking about.


I try not to assume....

....And here's why, in part. According to the ECB's latest available data (2014), at least 88% of transactions in Italy were non-cash (i.e. the total percentage of credit transfers, direct debits, card payments, and checks). That's transactions, not transaction value. Card transactions alone represented 42.4% of all transactions. There are some popular, dated misconceptions about Italy, and cash's outsized role is one of them. (Cash transactions are still important but not _that_ important.)

That side issue aside, this thread started out with a second hand report that a bank in Italy closed. That's potentially news! It'd be nice to know the name of the bank.


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## flatfoot (Jul 8, 2016)

accbgb said:


> I have little doubt that Italia-MX's friend was having her social security payments direct-deposited into her bank account and then simply drew the bulk of those funds out in cash in order to go about her daily life.


Indeed. 

Italy, and by extension the PIIGS at least, OUT of the E(f*)U will make financial life for expats much easier!

So cheers to Beppe Grillo and a little 5* music to go with it:
(since I can't post a link go to Utube, search for "El Grillo - Josquin de Prez" and pick "Elam Rotem"'s channel version)

* - Sorry folks "f" stands for "financial" . . .


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> I try not to assume....
> 
> ....And here's why, in part. According to the ECB's latest available data (2014), at least 88% of transactions in Italy were non-cash (i.e. the total percentage of credit transfers, direct debits, card payments, and checks). That's transactions, not transaction value. Card transactions alone represented 42.4% of all transactions. There are some popular, dated misconceptions about Italy, and cash's outsized role is one of them. (Cash transactions are still important but not _that_ important.)
> 
> That side issue aside, this thread started out with a second hand report that a bank in Italy closed. That's potentially news! It'd be nice to know the name of the bank.


There you go again. I call BS.

One, who is counting the cash transactions? Card transactions are easily and accurately counted; not so for cash transactions - especially in an economy which has thrived for decades - no, centuries - "in nero."

Two, when is the last time you spent an hour or two just hanging in a typical Italian village grocery store or cafe/bar? Feel free to do so (oh, I forgot, you don't live in Italy and, for all I know, never have lived in Italy) - anyway, feel free to do so and tell me how many of the transactions you witnessed were NOT cash.

Three, once again, while I have no doubt that folks dwelling in the major cities probably use non-cash more often, I think you will find quite a different dynamic in any of Italy's 8,000+, mostly tiny, comuni.


PS: Hmmm...

"“The Italian banking system is in serious trouble, and the failure of these four banks is simply the tip of the iceberg." http://www.cumber.com/italian-bank-runs/

"Thousands of small investors lost money in rescue of four banks" http://www.reuters.com/article/italy-banks-bonds-idUSL8N1490SJ20151221

"How Italy’s oldest bank lost 99% of its value, ..." http://business.financialpost.com/n...t-of-the-italian-banks-are-also-a-basket-case


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## Italia-Mx (Jan 14, 2009)

accbgb said:


> Two, when is the last time you spent an hour or two just hanging in a typical Italian village grocery store or cafe/bar? Feel free to do so (oh, I forgot, you don't live in Italy and, for all I know, never have lived in Italy) -
> 
> [/url]


Good observation, accbgb. I made a similar one many years ago as this person, BBCWatcher, has been all over the internet, ad nauseum, in any Italian related topic, providing mis-information, issuing threats, and giving orders to Expats in Italy and Italian citizens, be they American, Canadian, British, South African, Australian, etc.


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## BBCWatcher (Dec 28, 2012)

accbgb said:


> I call BS.


If you find better data relating to that tangential issue, please let us know.

The ECB knows quite a bit about euro banknotes and coins. They -- the Eurosystem, specifically -- issue the stuff, after all. A reasonable person would not reflexively dismiss the statistical views of the organization that prints and mints euro.



> One, who is counting the cash transactions?


It's relatively straightforward for central banks to make reasonably accurate estimates of the number (and velocity) of cash transactions. It's an important part of their core mission. They have a lot of data to work with.

Nobody is arguing that there aren't cash transactions. There are, many! But they're probably less than 12% of financial transactions in Italy.

Welcome to a more modern Italy than you thought.


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## accbgb (Sep 23, 2009)

BBCWatcher said:


> If you find better data relating to that tangential issue, please let us know.
> 
> The ECB knows quite a bit about euro banknotes and coins. They -- the Eurosystem, specifically -- issue the stuff, after all. A reasonable person would not reflexively dismiss the statistical views of the organization that prints and mints euro.
> 
> ...


I still call BS.

While cash might be a relatively small percentage of the *value* of all transactions, I do not believe non-cash transactions are a substantial percentage of the *number* of transactions made by the average Italian during his typical, average, day. This is a place where a significant proportion of renters pay their rent in cash! 

YOU DON"T LIVE HERE! Stop telling those that do how things work.


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## BBCWatcher (Dec 28, 2012)

accbgb said:


> While cash might be a relatively small percentage of the *value* of all transactions, I do not believe non-cash transactions are a substantial percentage of the *number* of transactions made by the average Italian during his typical, average, day.


The ECB data I referenced estimates all financial transactions: business, consumer, tourist, resident, legal, and illegal. I do not disagree with your anecdotes. I never did; they agree with my observations. However, the plural of anecdote is not data.

It is reasonable to assume that your and my observations are skewed toward the participants in the Italian economy that are relatively more cash-oriented. But you criticized me for assuming that a particular individual I don't know (and that you don't know) is heavily cash-oriented. Maybe she is! But the Italian economy, overall, is not. Even consumers, overall, on average, are not.



> This is a place where a significant proportion of renters pay their rent in cash!


Which happens to be illegal, or at least it recently used to be and still is over 2,999.99 euro.



> YOU DON"T LIVE HERE! Stop telling those that do how things work.


And you, so far, don't accept the statistical reality of modern Italy's financial system. It is a surprise to many (including to me when I first saw the ECB's data), but there it is.

....What does this tangential issue have to do with this thread? And we don't even have a useful thread, still, because apparently the name of the bank that allegedly closed for a week is a state secret. It's a simple question with a simple answer, and the answer might be useful to other readers.


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## rsetzer99 (Feb 20, 2014)

The Italian banking system has got to the point where most of the cost of living transactions, like rent, utilities, tax, are being done via direct banking transfers. You can still do them at the Tabacchi with a fist full of bills, but I imagine the ECB stats reflect people moving past that. 

On the street however, cash is the norm, except maybe at petrol and train stations. You just don't see credit or debit cards doing almost all the transactions like one does in the US. If your purchases don't exceed your walking around money, its a cash deal. If your picking up the tab at the trattoria, you will want to drop your plastic. Hey, we're still provincial here, but not THAT provincial.


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## HKG3 (Jan 11, 2015)

The informal economy is a problem - just like the UK, trades people, window cleaners, taxi drivers and hairdressers (just some examples that come to mind, there are many more!) takes in a lot of cash from their economic activities, but how many of them are 100% honest with the tax authorities? I even remembered Ed Balls, while he was shadow chancellor, told people that he even got a receipt for getting his hedge cut!

Ed Balls: I always get a receipt for getting my hedge cut - BBC News

The ECB based their estimates on something - it is not out of the air (at lease I hope!). When the data is not accurate at the first place, any reasonable estimates (modeling based on assumptions) could be affected as well. The example that I can think of is the Greek's entry into the Euro. The country 'met' the conditions as expressed in the treaty, but as we all know today, the Greeks were not 100% honest with the economic statistics supplied to the ECB and EU.


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