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Only in Europe: Germans hoard cash in the crisis

In times of crisis, not only pasta and toilet paper are coveted hamster goods. Many people obviously feel more comfortable when they have enough cash in the house. At least that’s the case in Germany.

Unlike other Europeans, the Germans hoard cash in the Corona crisis. In March, the savers removed ten billion euros from their bank accounts, reports the “Frankfurter Allgemeine Sonntagszeitung”, referring to a study by the fintech company Deposit Solutions, which evaluated the data of the European Central Bank.

Accordingly, the Germans are the exception in Europe. While the savings deposits of Italians, French and Spaniards also increased in March 2020, the opposite trend was observed in Germany. “In an international comparison, Germans have a high affinity for cash,” the newspaper quotes former Bundesbank board member Andreas Dombret, who works for Deposit Solutions today.

From Dombret’s point of view, there is a parallel to the financial crisis in 2008, when banknotes at times became scarce in the banking machines: “In the face of such crisis-ridden situations, troubled Germans withdraw cash from their accounts.” Afterwards, the cash is usually paid back quickly.

The withdrawal of ten billion euros is not a vote of no confidence against the banks, said Deposit Solutions boss Tim Sievers the sheet, especially since German customers had a total of 2400 billion euros in deposits with the banks. “Given the size of the market, ten billion euros don’t really matter.”

The “Frankfurter Allgemeine” reported in mid-March of an unusually high demand for cash at the Bundesbank. From Monday March 16 to midweek, demand was twice as high as in the same period last year. Accordingly, 100 and 200 euro banknotes were in particular demand. As a result, some banks have lowered the limit for cash withdrawals in order to ensure the supply of all customers in times of branch closings.

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