Here is what a cash economy looks like:
- Restrictions in daily withdrawals
- Ban on premature termination of time savings deposits
- Compulsory renewal of all time savings deposits upon maturity
- Conversion of current accounts to time deposits
- Ban or restrictions on non cash transactions
- Restrictions on use of debit, credit or prepaid debit cards
- Ban or restriction on cashing in checks
- Restrictions on domestic interbank transfers or transfers within the same bank
- Restrictions on the interactions/transactions of the public with credit institutions
- Restrictions on movements of capital, payments, transfers
- Any other measure which the Finance Minister or the Governor of Cyprus Central Bank see necessary for reasons of public order and safety
That’s how you prevent a bank run, I suppose. But it does rather limit the benefits of actually being in the euro in the first place.
We’ll see if it works – where “works” means prevents total collapse of the Cypriot economy, because even the damage imposed by these measures is something most nations would rather avoid – when the banks reopen, which is currently expected to happen on Monday.