When the bank is closed, cash is king … not! A qualitative longitudinal study in the payment media used in Greece during capital controls

Konstantia Litsiou and Konstantinos Nikolopoulos

Chapter 6 in Forecasting, Planning and Strategy in a Turbulent Era, 2025, pp 197-213 from Edward Elgar Publishing

Abstract: In this chapter we investigate changes in payment media used by consumers as a result of extreme financial restrictions. The motivation comes from the summer of 2015 in Greece where after failure to reach an agreement between Greece and the Troika (EU, IMF and ECB) for an extension of lending support from the latter, the Greek government decided to close the banks for three weeks,and apply capital controls still in place ten months after the event – however gradually relaxed. Methodologically we adopt grounded theory and through this a fully qualitative and longitudinal study comprising three series (every six months) of in-depth interviews with individual citizens (on behalf of their households) over a period of one calendar year. We aim to investigate research changes in payment media used during and after the period when the banks were closed, as well as permanent changes in consumer and social behavior. Acknowledging that with this methodological approach reaching statistically significant results is very difficult to achieve, we seek and to a great extent provide insight into what really happened during and after the events, and one thing emerged repeatedly: people turned more to the use of debit cards, and secondarily to online banking and to a lesser extent to credit cards; the latter came with an inevitable rise of household debt. Cash use was only temporarily increased and more evidently during the three-week event, while all the previous aforementioned results were more permanent in nature, as illustrated from the longitudinal analysis.

Keywords: Financial crisis; Banks; Capital controls; Households; Payment media (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035317233
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