Clash of the Titans

by ChrisCook Wed Jan 30th, 2013 at 03:09:12 AM EST

There is an interesting BBC article today [26-01-2013] on the subject of Bank of England £1m ('Giant') and £100m ('Titan') notes.

front-paged by afew

In Scotland today there is private bank note issuance by Bank of Scotland

Clydesdale Bank

and Royal Bank of Scotland

Four Northern Irish banks also issue notes.

An interesting side note for bank-note nerds is the fact that we have £100 notes North of the Border which presumably fill the same Black Economy niche as the €500 'Bin Laden' notes sitting mainly under Spanish beds or in drug barons' brief-cases.

Also Royal Bank of Scotland still has a few £1 notes floating about, but they seem to be collector's items these days.

I knew that this private bank note issuance is matched pound for pound by sterling from the Bank of England, but I had not realised that to this day the Bank of England still provides this sterling in note form.

Note here that I seem to recall having read somewhere that the note-issuing private banks somehow get to keep seigniorage outside the working week ie week-ends and bank holidays. I'm not sure how that would work.

So, rather than shipping huge heaps of small (ie £50 or less) denomination notes around their vaults, little wedges of 'Giants' and 'Titans' are apparently moved around somewhere in the bowels of the Bank of England.

You couldn't make it up: or rather they could; they did; and they still do.

So for those who thought the Trillion dollar coin was surreal, Giants and Titans still live.

Clash of the Titans | 18 comments (18 topical, 0 editorial, 0 hidden)

Re: Clash of the Titans (4.00 / 7)

Interesting. I think very large denominations has largely been outphased in most currencies as the banks settle their internal transactions by digital money rather then by armored car transports.

Like this one:

The largest denomination of currency ever printed by the Bureau of Engraving and Printing (BEP) was the $100,000 Series 1934 Gold Certificate featuring the portrait of President Wilson. These notes were printed from December 18, 1934 through January 9, 1935 and were issued by the Treasurer of the United States to Federal Reserve Banks only against an equal amount of gold bullion held by the Treasury Department. The notes were used only for official transactions between Federal Reserve Banks and were not circulated among the general public.^[5]

What makes me sad is SNPs lack of monetary insight.

BBC News - Britain's £1m and £100m banknotes

But the system which today's giants and titans help guarantee could face new scrutiny if Scotland votes for independence next year. The Scottish National Party is proposing that an independent Scotland arranges with the rest of the UK and the Bank of England to continue to be part of the sterling family.

A state should control its currency or the controller wields power over the state. Surely the euro crisis should have made that obvious?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun Jan 27th, 2013 at 05:21:15 AM EST

Re: Clash of the Titans (4.00 / 5)

I once started off a discussion about the EU in a class with the €500 notes, and a story problem about money laundering. A million US dollars in $100 bills weighs just over 10 kilos, in €500 notes less than 1/10th that. Did they pay attention that day......

Being amused aside, I wonder what impact the retirement of of euro notes above €50 would have on tax evasion. It's a well know fact in Spain that if you don't want to pay the tax, you pay in cash rather than electronically. Reducing the size of the largest note available for these transactions would increase their cost. Would that drive down tax evasion, and drive up government revenue? If so, would that put any sort of dent in government deficits?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Jan 27th, 2013 at 09:38:37 AM EST

Re: Clash of the Titans (4.00 / 2)

Here's € bank-note data:

(a) generally

(b) Tabulated by number and

You will see that of the €912.7 billion in notes currently out there no less than €293.7 billion (or about 32%) is in 'Bin Ladens'.

That's a whole lotta wonga to extract from under the beds.

My understanding is that in Spain the principal reason for use is that there is an official property sale price against which tax is paid, and then an unofficial price, with the difference being paid in Bin Laden bricks of €500s. I'm not sure how true that is or was.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Sun Jan 27th, 2013 at 12:30:04 PM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

ChrisCook:

an official property sale price against which tax is paid, and then an unofficial price

That's often the case in (parts at least of) France. As far as I've had knowledge of transactions, however, the "under the table" cash settlement rarely exceeds 10% of the total agreed price.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 28th, 2013 at 02:19:17 AM EST
[ Parent ]

Re: Clash of the Titans (none / 1)

Twenty years ago, a certain person not unclosely related to the present writer paid 25% of the agreed price for a decaying farmhouse in the Lyon region, in cash. It took us the person a few months to accumulate enough banknotes, taking out the weekly limit from money machines.

The notary tried to trap the two parties into declaring the full price, but was unable to drive a wedge between them.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Mon Jan 28th, 2013 at 06:07:22 AM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

Did the person encounter a cash withdrawal limit at the bank itself?

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 28th, 2013 at 06:16:27 AM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

He The person may have thought that by using ATMs nobody would notice the withdrawals.

by gk (gk (gk quattro due due sette @gmail.com)) on Mon Jan 28th, 2013 at 06:21:22 AM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

Since the person was banking in France, and there is no limit there on cash payments between physical persons in a private setting, I'm wondering if banks can legally place a limit on withdrawals in specie. I don't know the answer.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 28th, 2013 at 08:08:14 AM EST
[ Parent ]

Re: Clash of the Titans (4.00 / 5)

The person was young and naïve, and perhaps didn't want to answer any friendly yet embarrassing questions about what the money was for. This was in a bygone golden era when banks kept up some sort of tradition or pretense of human contact with the clientele.

For my part, until a couple of years I had my accounts in a very small town, where staff turnover at the bank was low, and there was indeed friendly personal interaction, leading often to going the extra mile in the customer's interest, which is obviously a sub-optimal behaviour in terms of cost effectiveness (assuming they had a captive client). In recent months, having moved to a city branch of the same bank, it's clear that there's none of that nonsense going on there. In fact, I am in conflict with the bank over a sum of a few thousand euros, which they bloody well will reimburse me in the end (even if they don't know it yet), but it wouldn't have taken several months if anyone at the bank had simply had the customer's interest at heart.

The result of this is that I will change banks when the dust settles. Either to a small co-op bank, which will no doubt be inconvenient and offer fewer services, but which might be expected to behave itself better. Or to the cheapest virtual bank I can find : just the services, with no illusions about human involvement.

_{It is rightly acknowledged that people of faith have no monopoly of virtue
- Queen Elizabeth II}

by eurogreen on Mon Jan 28th, 2013 at 08:24:23 AM EST
[ Parent ]

Re: Clash of the Titans (none / 1)

Switch to Handelsbanken. ;)

(If the link doesn't work, just Google the article title, and use the Google sidebar to access the cached article.)

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Jan 30th, 2013 at 11:01:03 PM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

Hi, Starvid. (Didn't notice the hot tip between brackets ;)).

by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 31st, 2013 at 01:55:03 AM EST
[ Parent ]

Re: Clash of the Titans (none / 1)

It is now (since 2012) illegal in spain for firms to carry out cash transactions larger than 2500 euros. Which means any larger amounts need to be routed through means of payment leaving a paper trail.

This doesn't mean that there won't be fraud, but now it will literally have to involve payments 'on the side'.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Jan 27th, 2013 at 01:24:16 PM EST
[ Parent ]

Re: Clash of the Titans (none / 1)

Having a law on the books is great, but I wonder whether withdrawing the notes from circulation would be more effective by making it a pain to do large scale off the books transactions.

With the ban on cash transactions that you are talking about, it just raises stakes of getting caught. But if the largest note was a 20 or 50, then it would be a whole lot more difficult to do these things off the books. Unless you fancy carrying around a trunkload of the stuff. Presumably doing a transaction all in 20s would mean it would weigh 25 times as much as in 500s.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Sun Jan 27th, 2013 at 02:17:34 PM EST
[ Parent ]

Re: Clash of the Titans (4.00 / 5)

The ECB is going to issue new series of banknotes. If they were to simply take the old 500 euro notes out of circulation, forcing their conversion, that would be a world of hurt for money launderers and tax evaders, because the conversion would automatically make all the money traceable again.

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Migeru (migeru at eurotrib dot com) on Sun Jan 27th, 2013 at 02:53:05 PM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

In France, the "professional" cash payment ceiling is €3,000. But between physical persons in a non-professional relationship, there is no limit -- which is an obvious door open to "under the table" payments.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 28th, 2013 at 02:53:48 AM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

Convenient, given that most 'professionals' are physical people.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 29th, 2013 at 03:22:28 AM EST
[ Parent ]

Re: Clash of the Titans (none / 0)

The real question is how Tony Robinson managed to get on the Clydesdale Bank 20.

by Number 6 on Mon Jan 28th, 2013 at 06:32:56 AM EST

Re: Clash of the Titans (none / 0)

I sent a $5 Starbucks eGift to a friend in London without realizing that she couldn't cash it there. Not sure if this is a regulatory thing or just laziness on the part of Starbucks--why can't they just convert my 5 USD into 3 GBP at today's exchange rate?

Perhaps the reason is that you could then see million dollar eGifts floating around...

by asdf on Wed Jan 30th, 2013 at 11:24:45 AM EST

Clash of the Titans | 18 comments (18 topical, 0 editorial, 0 hidden)

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