Thursday, June 9, 2011

French “corralito” around the corner?: New Withdraw Limits Confirmed

Restrictions to the amount of money you can withdraw from ATMs is a clear sign of problem, one we’ve mentioned here before and something that happened in Argentina prior to the economic collapse. Basically it’s the first step to a “corralito”. A corralito is created to prevent bank runs by limiting the amount of money you can withdraw from your own account.
The rumor of one of the largest banks in France cutting the amount of cash people can withdraw to 50% has been around for a few days, but its now confirmed by the bank itself:
My French is poor but this I understand. What it says is people with Visa Premier can now withdraw a maximum of 1500 Euros per week. Those with Visas and Mastercads can withdraw 1000 Euros a week and those with Carte Realys can withdraw 800 Euros per week. In comparison, as of today, in Argentina you can withdraw the equivalent in pesos of 3500 to 7000 USD per week in most ATMs.
Guys, those of you in France, I suggest carefully considering getting a fair amount of your money out of the bank NOW.
Join the forum discussion on this post


Jack said...

Hi Ferfal, I'm French and my money is out of the bank since years.

"La banque postale" (Postbank) is a national bank, property of the french state.
This bank has been a model of public service for decades, but today we no longer see the difference with private banks.

Ed from Europe said...

Hi there... In Holland you're allowed to withdraw 1250 per week with a standard card.

I don't know about any problems with banks running low on liquids, so as to say that this is the beginning of problems, I wouldn't think this.

My guess is that few people withdraw 4x 1000 euros every month from their account.

You can also make an appointment and withdraw 4000+ euros. I'd say that those amounts are so seldomly withdrawn that it poses no change for people.

Another survival mindset view could have been the following: thieves can withdraw a bit less money at a time. You'll get stolen a bit less whenever someone steals your card.

Anonymous said...

great post ferfal, glad to see you're reading max keiser.

hsu said...

I live in the USA, and my withdraw limit is $400 per day or $2800 a week.

I'm sure if my bank saw me withdraw $400 everyday for a week, I'd get a phone call about it, asking if my card got stolen.

Jack said...

In France too, you must make an appointment to withdraw money at the bank counter.
For amounts in excess of 1500 / 2000 Euros, you need an appointment 48 hours (or more!) in advance.
This measure is effective for years. For security reasons, French banks have very little cash on hand.

Caution with the source of Max Keiser. Jovanovic is a curious Catholic follower of conspiracy theories who predicted the Apocalypse for years.

There are better sources in French, like Paul Jorion, who thinks that the next financial crash could occur in coming months.

Bill in NC said...

Cash supplies are very tight in U.S. banks.

Over the counter I've had trouble getting $5,000 in 20s from the main branch of the largest credit union in our state.

Even 15 years ago, while a teller, branches were required to keep no more than $50,000 total in cash to reduce potential theft losses.

I'm sure that limit is much lower now - probably $20,000 or less.

Remember, here in the U.S. ATMs are refilled not by the local bank, but by national firms dispatched from a central location.

Anonymous said...

Bill - That's not uncommon. Nor is it a sign of anything wrong.

It's a VERY common misconception that bank branches (American banks that is) have tons of cash on had.

They don't.

Each branch is only allowed by the bank to keep a certain amount of cash on hand based on the accounts held there and the average daily business.

So it's very possible if you walk in (especially late in the day) and want to make a large cash withdrawl they can't accommodate it.

But it doesn't mean there's a liquidity problem with the bank.

Etienne said...

Hi FerFAL !

I've got a MasterCard in France and I can't withdraw more than 300€/month for years (I suppose that's the proletarian version of these cards LOL).

They may be preparing for a bank run, who knows, but I'd rather think it's only for security reasons.