So, this is fun. Via Zero Hedge comes this report from a Swiss website, Schweizer Radio und Fernsehen (SRF). It seems that a Swiss pension fund tried to evade negative rates on deposits by withdrawing a very large amount of physical cash with the intention of vaulting it. But the bank refused to allow it to withdraw the money in the form of physical cash.
Not surprisingly, representatives of pension funds are angry at the bank’s behavior. The director of the Pension Fund Association ASIP, Hans Peter Konrad, has been angry for weeks about the fact that pension funds suffer from negative interest rates. He says: “We do not understand why the banks are getting involved.” (…)
However, it is highly unlikely (though not impossible) that a pension fund trying to withdraw physical cash would be intending to use it for criminal purposes. So was the bank breaking the law in refusing to allow the fund to withdraw its money in the form of physical cash? Zero Hedge says it was:
Note here that it is indeed breaking the law, as there is nothing in Swiss legislation that states that banks are allowed to refuse or delay servicing withdrawals from demand deposits upon request.
But hang on. The bank did not refuse or delay servicing a withdrawal from a demand deposit. All it did was restrict the form in which the withdrawal could be made. The pension fund was still able to withdraw money by electronic transfer or by check. It was simply unable to receive physical cash.
Of course, those who think that the only real money is the green paper in your wallet (or better, shiny yellow metal) will no doubt claim that refusal to allow deposits to be converted into physical cash is a denial of fundamental property rights. But the legal position on this is opaque to say the least. Is paying for a meal in a restaurant with a bank card “less good” than paying for it with physical cash?
