A Front-Row Seat At A Bank Run
A decade ago, investors thought Greece would flourish on the euro. Money poured in, and banks started lending it out. Thefilos Papacostakis, a bank teller at Alpha Bank in Thessaloniki, got to hand out a lot of that money.
Last month, Thefilos says, his bosses called him in for a meeting. They told him things were about to get worse. When countries are in this kind of trouble, the bosses said, people panic and pull their money out of banks.
A few weeks ago, his customers started calling: "They say, 'Thefilos, tomorrow I'm going to need 50,000 euros, cash.'
"I say, 'Maybe cashiers check.'
" 'No, no. Cash.' ...
"And then, half an hour later, somebody else will say, 'Thefilos, I need 200,000 euros.' "
If Greece leaves the euro — which now seems like a distinct possibility — the money in Greek banks will be converted into drachmas, and will suddenly be worth a lot less.
The thing about bank runs is that they can be a self-fulfilling prophecy. People see other people pulling their money out, and they rush to do the same. So at first, Thefilos says, he was angry when he saw people pulling their money out of the bank.
But after a couple of weeks of counting out stacks of euros and sending customers' money to other countries, it doesn't feel like such a big deal.
"It's like a doctor," he says. "The first time he makes a surgery, he throws up and faints. And then after the thousandth operation, he doesn't feel any difference."
Thefilos says he doesn't have much money himself. But if he did, he might have pulled it out of the bank already.
DAVID GREENE, HOST:
Now as you heard Chris mention, trouble - economic trouble - in Europe. We turn to Greece now. Greeks are pulling their money out of the nation's banks, over fears that Greece is about to leave the euro. Many are moving their savings accounts to Germany or stuffing cash under mattresses. Experts are beginning to call this a bank run in slow motion. Chana Joffe-Walt takes us inside a Greek bank to meet a person whose job it is to hand over the money.
CHANA JOFFE-WALT, BYLINE: Before money leaves, there's always a moment when money flows in. And for Greece, that moment was really dramatic. It was about 10 years ago. The country was about to join the euro, and Thefilos Papacostakis was called into a meeting at work. Thefilos is a bank teller in Thessaloniki at Alpha Bank, and the boss sat everyone down after the workday.
THEFILOS PAPACOSTAKIS: And one of the things he said: You should forget what you know. Soon enough you'll forget everything you know about banking. Everything's going to be all new.
JOFFE-WALT: And when he said that, what did you think?
PAPACOSTAKIS: Well, you know, we laughed. We said, yeah, sure. Yeah. Right. I'm sure, I'm sure. Mm-hmm. Well, it did happen.
JOFFE-WALT: What happened a decade ago was investors thought Greece would flourish on the euro, so money poured into the country and Greek banks started lending it out to people for cars, vacations, homes. Thefilos's job was indeed totally different. And in years past, things collapsed in Greece. You know the story - lots of debt, investors left the country. And then last month, Thefilos says, the bosses called another special meeting.
THEFILOS PAPCOSTAKIS: You know how managers work - pep talk and high goals and all that stuff.
JOFFE-WALT: The bosses showed up after work, they sat everyone down.
PAPCOSTAKIS: Basically, they was, you know, be happy, smile, you still have a job.
JOFFE-WALT: That's it? That's the pep talk?
PAPCOSTAKIS: That's the bottom line.
JOFFE-WALT: Thefilos says the bosses then added: things are bad and they're going to get worse. When countries are in this kind of trouble, people panic and pull their money out of banks. Thefilos heard the words bank run, but once again...
PAPCOSTAKIS: I didn't think it was real.
JOFFE-WALT: Until just a few weeks ago when his customers started calling.
PAPCOSTAKIS: You know what they do? They call me and they say, Thefilos, tomorrow I'm going to need, say, 50,000 euros cash. I say maybe cashier's check? No, no, cash. OK. And then half an hour later, somebody else will say, Thefilos, I need, say, 200,000 euros.
JOFFE-WALT: If Greece leaves the euro - which seems like a distinct possibility - the money in Greek banks would likely be converted into drachma and would suddenly be worth a lot less. But the thing about bank runs is they're a type of self-fulfilling prophecy, a fact Thefilos's customers seem to be aware of.
PAPCOSTAKIS: The funny thing is some of them are apologetic, like, you know, I'm sorry I take the money, but, you know, I'm so scared.
JOFFE-WALT: For those people, Thefilos Papcostakis is not the person you want to turn to for comfort.
PAPCOSTAKIS: I felt very bad and I was angry at them. I was pissed, I was troubled. I was talking my - the branch manager and says what can we do about that? I don't like it. I don't want to do it. Just do your job. Be cool. It's their money. They can do it.
JOFFE-WALT: After a couple of weeks after counting out stacks of euros and sending money to Germany and Australia, Thefilos says he's not angry anymore.
PAPCOSTAKIS: It's like a doctor. The first time makes surgery, you know, throws up and faint, and then after the thousandth operation, doesn't feel like any difference.
JOFFE-WALT: Have you taken your money out?
PAPCOSTAKIS: I don't have any money at all. You know, sometimes I wondering what if I had 100,000 euros. Would I do the same? I probably would have.
JOFFE-WALT: That is the definition of a bank run - when even the guy working at the bank, responsible for handing out the cash, wouldn't necessarily keep his money there either. Chana Joffe-Walt, NPR News.
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GREENE: And Chana Joffe-Walt is from NPR's Planet Money team. And we want to tell you that Planet Money now has an iPhone app. It puts the global economy in the palm of your hand with radio storytelling, blogging and innovative economics coverage.
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GREENE: You're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.