ECB Urges Households to Keep Cash as a Crisis Safeguard

The European Central Bank (ECB) has called connected households to support a currency reserve astatine location to hole for emergencies. In a caller study, the slope emphasizes that carnal wealth is simply a important constituent of nationalist situation preparedness, offering resilience when integer systems fail.

The connection mirrors existing guidance successful countries such arsenic the Netherlands, Austria, and Finland, where citizens are encouraged to support 70–100 euros per idiosyncratic successful cash. Similar measures person besides been adopted successful Sweden and Norway.

Learning From Recent Crises

The ECB highlights lessons from the Covid-19 pandemic, the war successful Ukraine, and earthy disasters such arsenic wildfires and floods, which exposed Europe’s vulnerabilities. In respective cases—like a blackout successful Spain and Portugal—digital payments, ATMs, and online banking collapsed, leaving currency arsenic the lone functional outgo option.

During the pandemic, request for banknotes surged by 140 cardinal euros successful conscionable two years, acold supra pre-crisis trends, adjacent arsenic consumers shifted to contactless and online payments.

Balancing Digital and Physical Money

Despite the ECB’s propulsion for a integer euro and banks’ efforts to trim branches and ATMs, policymakers look unit to safeguard entree to cash. Austria, for example, plans to instal cardinal bank-operated ATMs successful agrarian communities where commercialized banks person withdrawn. Finland is exploring “outage-resistant” ATMs to guarantee availability during system failures.

The ECB likens currency to flood defenses successful the Netherlands: seldom needed, but indispensable successful times of crisis. “Cash is not lone astir gathering idiosyncratic needs,” the study notes, “it besides strengthens systemic resilience.”

A Safety Net for Households

The study stresses that governments should see issuing authoritative guidelines connected household reserves—not to dictate nonstop amounts, but to guarantee citizens tin screen basal needs for astatine slightest three days.

Ultimately, the ECB frames banknotes arsenic the outgo system’s “reserve fuel”—unnecessary successful regular beingness for many, but captious when integer infrastructure falters.

Source: tovima.com