Cash

Cash is money (cash ) in physical form, ie, coins and paper money. Before 1915 in Germany was the cash term only Kurantmünze reserved.

Properties / cost

Cash is legal tender in most countries. It is created by the central banks of countries or communities with its own currency and brought to commercial banks in circulation. Unlike bank money, the flow of cash can not be observed or controlled in detail. That is the reason why criminal transactions such as moonlighting or other shadow economy are paid in cash, because the respective holders of cash can not be traced and documents such as invoices or receipts not normally be issued.

The costs incurred by the use of cash in the retail sector is estimated to be 0.08 to 1.3 % of sales. In Belgium and the Netherlands, the cash costs amount to about 0.91 % of the gross domestic product and thus available for three-quarters of the total cost of payment processing.

Motives of holding cash

In economic theory ( according to JM Keynes ) cash holdings of cash (especially of demand deposits ) returned roughly three motives:

• Transaction motive
• Caution motif
• Speculative motive

Currency in circulation

Currency in circulation is microeconomic part of the overall central bank money stock of an economy and is made up of the notes and coins in circulation. The amount and timing of cash flow will depend on the prevailing practice, the payment history, the confidence in the banking system and the payment technique of non-banking sector, however, can not be influenced by the central bank. The cash supply is ensured by the banks, which raise the cash with the central bank to the detriment of central bank balances. The cash requirements of banks are from a balance sheet perspective of a central bank thus a passive exchange (lower demand deposits of banks, but higher bills in circulation). Any change of currency in circulation thus leading to direct changes in liquidity in the banking sector.

The cash flow is characterized by strong seasonal fluctuations. Wage and salary payment dates, tax payment dates or travel time lead to statistically observable increase in currency in circulation, to prepare the credit institutions. Since cash holdings in banks are not interest-bearing and can lead also to security problems (bank robbery), the banks have a rule against only very small amounts of cash. They are therefore forced to turn on the central bank in times of higher cash requirements. Therefore, the cash flow is not only affected if the banks give cash out of their own cash to their bank customers or take cash payments from their customers in their own portfolio.

Money supply

Together with the demand deposits SE and the central bank money ZBG forms BG cash the money supply M1, M1 = short ZBG BG SE. The aggregate of the money supply so also includes the cash holdings. Increases the amount of cash, so increases - under otherwise constant conditions - the money supply and vice versa. The cash unit also influences the money creation ability of credit institutions, which is restricted with increasing cash flow.

The monetary base ZBG in turn is the sum of currency in circulation BG and the minimum reserves MR of credit institutions: ZBG = BG MR. The aggregate amount of the Central Bank shall be composed of sub-aggregates, which can neither create nor affect even the banks.

Cash ratio is called the cash flow in relation to a current size (eg gross domestic product) or as a proportion of a stock size (eg monetary, financial assets). She makes statements about the (cash) payment behavior in an economy. In countries such as the United States increases by the increasing use of debit and credit cards, the amount of cash in circulation is slower than in countries with high cash ratio, which leads to a rather declining or remaining constant cash rate.

Payment behavior in Germany

In Germany, citizens prefer to pay with cash. Individuals employed in 2011 at 53.1 % (2008: 57.9 %) of their spending on goods and services when shopping cash. In order for this payment instrument remains the most popular and widely used form of payment. In the non-cash instruments, the Girocard (the former ec card), the role of favorite well before the credit card. It is ( 25.5%) used in 28.4 % of the total expenditure, the share of remittances was 8.2 % ( 8.9% ), followed by credit cards, whose share has doubled to 7.4 % ( 3.6%). Other payment instruments play virtually no role. The threshold amount at which the consumers of the cash converts to non-cash payment, is the study, between 20 and 50 €, 100 € outweighs the girocard.

Legal Issues

When Cash lawful currency of the currency owed ​​would be transferred in the nominal value of the amount of money owed by the debtor under § 929 BGB to the creditor. This cash payment is according to the traditional understanding of the " real " performance owed the money the debtor and leads to the acquisition of property appropriated to the above means of payment to settle the money owed. Cash has the highest traffic capacity of all movable property. While a good faith acquisition of stolen, lost or mislaid property pursuant to § 935 Section 1 BGB is not possible, these restrictions (2 BGB § 935 para ) do not apply to cash and bearer bonds.