Why you should care
Because maybe grandparents know best.
Once upon a time, when banks weren’t around yet, people used to hide their savings in pots or jars, under the bed, in stables, barns and in any other hiding places that at the time might reasonably be called safe. That’s mostly a quirk of the past. But in Italy, there’s a new kind of renaissance. Mistrust in the country’s financial system is high among savers. So high, in fact, that in the past four years,
90 billion euros have been withdrawn from Italian bank accounts.
That’s according to our calculations, using Bank of Italy statistics. People are freaking out. Due to constant fears of a never-ending triple-dip recession, and growing levels of bad loans sitting on banks’ balance sheets that are jeopardizing financial stability, taxpayers have lost faith in banks, says Elio Lannutti of leading consumer lobby Adusbef.
So where have Italians stashed that 90 billion euros? “I know a couple of old people who hide all their money underneath a huge tree in their backyard,” says Lannutti. “That just makes them feel better.” Other favorite places to stash your stash, according to consumer groups: mattresses (stitched inside), pillows, behind paintings stuck on walls, under the toilet seat or a squeaky brick on the front porch — but not in a safe box, as that would be the first place that robbers would look. And when it’s that magic moment of the month when pensions are paid — San Paganino, as in “Saint Payer Day” — you can spot the grannies lining up at ATMs, gearing up to stash the euros in their undergarments for safekeeping on the trek home. But it’s not a clever move. Not surprisingly, these women are a target for pickpockets.
New European banking rules adding to concerns that taxpayers’ money will go toward bailing out banks that fail, adds Lannutti. The rise of these do-it-yourself “home banks” is a clear sign that Italians want to be able to see their cash, not just know it’s in some amorphous account, out of their immediate control. Italians are in fact allergic to credit cards in general: They prefer to carry around euro notes and coins, as it makes them feel they possess the “real” thing.
The mass exodus from lenders is also due to rising bank costs, says Filippo Rossi, a Rome-based financial expert. Italian lenders’ services, he says, are among the most expensive in Europe. In contrast to other European countries, where bank personnel are practically nonexistent and banking is primarily digital, Rossi says, “Italian banks have way too many employees.”
History loves irony. Italy is the land where banks in Europe were born. The Medici family were ruthless bankers who rose to power in Florence during the Renaissance thanks to the money they lent — and which they used as means of corruption, too. After centuries of consolidated-banking tradition, the country that gave birth to banks could be the first to sponsor their demise. Today, fed-up Italians are saying basta. Enough.