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Join a World-Wide Bank Run in December -- Move Your Money

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"A spectre is haunting Europe." Its not the revolution that Karl Marx supposed would come about. Nor is it Parisian students and workers taking to the streets as in May 1968. It is the vision of hordes of Europeans striking back at those who caused the 2008 financial crash. This time, organizers are calling for the use of a new weapon, one available to any of us with a bank account. It is the simple act of removing all of our money from the banks, and doing so en masse on the same day -- December 7th.

While it is hard to know who first thought of this marvelous act of political theater, it has begun to take serious traction in France and is now spreading across Europe. It has especially taken off since a ringing endorsement of the idea began making the rounds on YouTube and Facebook by the always amusing, and surprisingly thoughtful, ex-soccer star Eric Cantona. Cantona, already famous for his performances with Leeds United, Manchester United, and the French National Team, has remained in the public eye while developing new interests in photography, film, and live theater (Happily for the discerning taste of the French public, he is an excellent photographer, and in the latter endeavors he has the advantage of being mentored by a well-established and highly-talented young actress -- his wife, Rachida Brakni).

Of late, the famously mercurial temper that Cantona exhibited on and off the soccer pitch has been redirected from rivals and unruly fans. A prominent target is French President Nicolas Sarkozy's proposal to create a ministry, museum, and mass public debate on "national identity," all of which Cantona publically ridiculed as "idiotic." His sights are now trained on the banking and financial system that he -- correctly -- holds responsible for France's current economic problems. This is important because Sarkozy and the EU leadership is using this crisis to erode welfare state protections even as ostensibly scarce public monies are deployed to shore up the banks most responsible for the problem.

Which brings us to the economics of a mass withdrawal of deposits from the banks. Will it bring about an actual bank run or financial crash? Certainly not. For one thing, an organized and deliberate action such as Cantona proposes lacks the element of panic so characteristic of bank runs. Additionally, the banks and the central banks overseeing them will have time to prepare for the event, and should be able to reallocate their holdings of cash, reserves, and other assets in advance. If necessary, banks can always borrow short-term funds on the inter-bank market or even directly from the central bank. A mass withdrawal should, however, shrink the profitability of banks, as retail deposits are normally considered cheap and stable sources of funds with which to finance loans. Large European banks, relative to their American peers, are more dependent on retail deposits, so they will especially miss these funds when the time comes to calculate profits and bonuses.

But what of the politics? Here in the United States it is now overwhelmingly clear that a dozen or so of the largest financial institutions responsible for the crash and ensuing recession have gained, not lost, by their irresponsible decisions. They repeatedly tell us that they have "learned lessons." This is true, they have: Learned that their past decisions have enriched senior management beyond belief. Learned that their market share is now substantially larger than before the crash. And learned that the government has deemed them Too Big To Fail (this latter designation lowers their cost of funds and enhances their profitability). Showing admirable "bi-partisanship," Republican and Democratic administrations have worked hard and seamlessly to bring about these "lessons." This summer, the Dodd-Frank Financial Reform and Consumer Protection Act enshrined the perspective of financial elites that reform should be primarily symbolic. In a sentence, over $12,000,000,000 of stock market, real estate, and other asset values disappeared, while rates of home foreclosures and unemployment soared, with virtually NO political or legal consequences. I might be a cynic, but I hope to never be as cynical as those who engineered these outcomes.

Bringing Cantona's symbolic protest here to the United States could mark the beginning of a new politics, one marked by actions taken outside of the normal party process where "hope and change" are now effectively stifled by the duplicity of our elected officials. Moreover we, the people, need a victory. We need to do something that simultaneously creates a spectacle and an unmistakable political message. So let us join with Cantona and the good people of Europe by withdrawing our money from the four largest American banks on December 7th (Bank of America, J.P. Morgan Chase, Citigroup, and Wells Fargo). They deserve our contempt several times over, so lets present them with their just rewards! Sadly, the next largest two in size, Goldman Sachs and Morgan Stanley, do not have many retail accounts. But perhaps we could gesture at them with a middle finger on our merry way to withdraw money from the others!

In preparation, open an account at a credit union or a community bank over the next few weeks so you will have somewhere to put your money when the protest ends. If you are worried about the security of your funds on the day of the protest, withdraw all but a token sum beforehand and then close your account on December 7th.

Perhaps happiest of all, this protest has no downside. You don't even need a permit -- after all, you are just going to the bank! Your actions will tie up their bank operations all day, and their back offices for some time afterwards. While waiting in line, you will have a chance to meet friends, neighbors, and like-minded fellow citizens who care deeply about the future of this nation. You will hurt the profits and the public image of several irresponsible and predatory financial institutions. You will embarrass the political leadership of the nation. And finally, your money will almost certainly end up in a more service-oriented and socially responsible institution. You will be glad that you turned out on December 7th.


Robert E. Prasch is a professor of economics at Middlebury College where he teaches courses on Monetary Theory and Policy, Macroeconomics, American Economic History, and the History of Economic Thought. His latest book is How Markets Work: Supply, Demand and the 'Real World' (Edward Elgar, 2008).

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