Banks raised the stakes in fantasy money league

THERE was a time when people could withdraw only €20 and €10 notes from ATMs. Then, some years ago, the banks created fantasy wealth when they programmed their machines to give out only €50 and €20 notes.

In doing so, they may have helped to fuel inflationary tendencies by getting their customers used to dealing in the larger denomination notes.

If there are people nowadays who draw €600 from the hole-in-the-wall three times a week, then I have not met them.

I wince when shopkeepers treat €50 notes like small change. Deflation is rapidly plummeting into a freefall that could reduce the value of money next to nothing. The banks could make amends and help restore deluded people to their economic senses by bravely stacking their ATMs to dispense only €20 and €10 notes.

Money stops being funny when you run out of it. Banks will function better if they get the basics of economic equilibrium back on track. If they don’t, they may yet see their €50 notes become their €50 coins.

The truth is that, individually and as a nation, we always had less money than we imagined and we couldn’t handle what we didn’t have.

Michael Mernagh

Raheens

Carrigaline

Co Cork

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Saturday, November 28, 2020

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