01 The Hour
Friday
24 July 2015. Athens. Reconstructed to the day.
The Bank of Greece met government representatives that day and moved a line. From then the banks themselves would approve payments for imports up to 100,000 euros, where the limit had been 50,000. Above 100,000, the Approval Committee for Banking Transactions at the General Accounting Office would decide.
The banks had been open for four days. The money was in the accounts. What an importer needed was not funds but a decision.
02 The Sequence
28 to 29 Jun 2015 Temporary capital controls were introduced. Cash withdrawals were capped at 60 euros a day per depositor per bank. A Banking Transactions Approval Committee was established to approve transactions leaving Greece. The controls disrupted the ability of financial institutions in Greece to make payments and transfer funds, and it was not known how long the restrictions on the supply of cash would remain.
20 Jul 2015 The credit institutions reopened after the closure. The restriction on moving money out of the country stayed where it was.
24 Jul 2015 The approval threshold for import payments moved from 50,000 euros to 100,000. Below it the banks decided; above it the committee did. The British government's guidance to its own businesses recorded the same change on the same date.
24 Jul 2015 Reported the same day: many imports were being held up because businesses could not pay for them. Farmers were unable to import fertiliser for their crops. Imported meat was often not being delivered to supermarkets and to local meat sellers. The cost of the controls to the economy was put at an estimated three billion euros.
10 Sep 2015 Two further changes. Importing businesses could put transactions of up to 5,000 euros through an ordinary branch, rather than through the central branch and the committee. And the ceiling on payments by Greek businesses to companies abroad was doubled, from 7 million euros a day to 14 million, to support imports in the autumn.
10 Sep 2015 Under consideration at the same time: lifting the weekly limit of 420 euros on restricted savings accounts where the money was to be used for a house or other property purchase, and allowing students and military personnel posted abroad to open Greek accounts and withdraw up to 2,000 euros a month.
2017 Nearly two years on, the five member Banking Transactions Approval Committee established by the finance ministry was still the competent authority for approving transactions abroad, working in coordination with the Bank of Greece, and the controls were still in force.
03 The Hidden Dependency
The daily cash limit was the number everyone quoted. The one that decided whether goods arrived was a different number, and it was set for the whole country at once.
Payments by Greek businesses to companies abroad ran against a ceiling of 7 million euros a day, later 14 million. Every importer in the country drew on the same allowance, through the same committee, in the order his file was reached. A manufacturer outside Thessaloniki told the Associated Press that he had the 45,000 euros and wanted to pay, and that what he needed was the approval of a committee run by the finance ministry, which was dealing with a huge volume of requests.
His constraint was not his balance. It was the queue in front of his file.
His constraint was not his balance. It was the queue in front of his file.
04 What Still Worked
The Branch Route
From September an importing business could put a transaction of up to 5,000 euros through an ordinary branch instead of routing it to the central branch and the committee, which removed the small payments from the queue entirely.
The Bank's Own Desk
Raising the threshold to 100,000 euros on 24 July moved a class of import payments from the central committee to the banks, which is the same queue handled by more desks.
The Named Exceptions
Measures under consideration in September would have lifted the weekly 420 euro limit where the money was going into a property purchase, and let students and military personnel posted abroad open Greek accounts and draw up to 2,000 euros a month.
05 The Document
The Document 29 June 2015
Greece has introduced temporary capital controls: guidance for businesses, published by the British government on 29 June 2015 and updated as the rules moved.
It is one country's notice to its own firms about another country's plumbing. It records that a Banking Transactions Approval Committee had been established to approve transactions leaving Greece, that from 24 July transfers over 100,000 euros would need that committee's approval, and that it was unclear how long the Greek financial system would take to operate without delays.
06 The Pattern Library
1 When one retail withdrawal channel closes or fails, demand concentrates on whichever channel is left open, and the capacity of that channel sets what a depositor can obtain.
Observed: Northern Rock 2007, Cyprus 2013, India 2016, Greece 2015, United States 1933, Argentina 2001, Lebanon 2019, Worldpay 2026, TSB 2018, Afghanistan 2021.
2 A currency replacement can require physical modification of each cash dispensing machine before the new notes can be issued, so the machine estate returns to service site by site rather than at once.
Observed: India 2016.
3 Withdrawal limits imposed on a domestic banking system can be written to exempt cards issued outside it, so one machine dispenses under two rules according to where the card was issued.
Observed: Greece 2015.
4 Domestic payment and deposit channels can continue operating while cross-border payment routes fail, with the central bank standing in as the intermediary for payments to and from the country.
Observed: Iceland 2008, Germany 1931.
5 When the institutions that convert payment instruments into cash are closed, wages and checks already received cannot be spent, and merchants and carriers extend their own credit in place of the missing conversion.
Observed: United States 1933.
6 A public employer short of the national currency can pay wages in an instrument it issues itself, which then circulates alongside the currency it stands in for.
Observed: Argentina 2001.
7 Withdrawal restrictions can be imposed by individual institutions and their trade association rather than by statute, so the limit differs from bank to bank and no law governs it.
Observed: Lebanon 2019.
8 A cash withdrawal ceiling set in nominal units has to be raised alongside the note denominations that pay it, because the ceiling can only be dispensed in the notes that exist.
Observed: Zimbabwe 2008.
9 A payment outage can hit card authorisation and merchant funding as separate faults, so acceptance at the terminal is restored while the money owed to the merchant arrives a day late under its own incident notice.
Observed: Worldpay 2026.
10 A retailer that loses electricity can go on trading by taking cash and rationing goods by hand, so the counter outlasts the checkout system that normally prices and settles the basket.
Observed: Texas 2021.
11 A systems migration can leave account records readable but wrong, including presenting one customer's account to another, so a working login is no guarantee that the balance on the screen belongs to the person reading it.
Observed: TSB 2018.
12 The size of a card processing failure can be counted twice, once on first attempts and once after the same card was presented again, and the second count can be about half the first, so part of the recovery runs through the cardholder at the till.
Observed: Visa Europe 2018.
13 A restriction on access to money can be written by purpose as well as by amount, so a balance that cannot be drawn in general becomes payable when it is used for wages, taxes or relief, and the test applied is what the money is for.
Observed: Germany 1931, Brazil 1990.
14 A deposit freeze can be paired with a transferable certificate issued against the frozen balance, so the deposit becomes a claim that can be sold before it is released, at a price the market sets rather than its face value.
Observed: Ecuador 1999, Argentina 2002.
15 A per head issue of a new currency can be distributed through the administration that issues food rations rather than through the banks, so the ration card is the proof of entitlement and the banks are used to collect the old money rather than to pay out the new.
Observed: Germany 1948.
16 When the persons under sanction become the governing institutions of a country, the prohibition reaches ordinary payments that merely touch the state, and access is restored by successive general licences written by activity, so what decides whether a payment can be made is which licence it falls under.
Observed: Afghanistan 2021.
17 One foreign currency held in one banking system can carry two prices at once, according to whether a balance was credited before or after the date the restrictions began, so the older money converts only at a rate the authority names.
Observed: Lebanon 2019.
18 A payment abroad can be made conditional on prior approval by a committee working to a ceiling set for the whole country each day, so what a firm can pay turns on the capacity of the approval process rather than on the balance in its account.
Observed: Greece 2015.
Changed today: No existing entry gained a case. Entries 1 and 3 already carry Greece 2015, and this angle concerns payments to suppliers abroad rather than the counter or the machine. Entry 18 added, on payment abroad made conditional on committee approval against a national daily ceiling.