Former US Treasury Secretary urged to stop issuing banknotes in $100

Former U.S. Treasury Secretary Lawrence summers (occupied the post in the last years of bill Clinton presidency) called for an end to the issue of new banknotes in denominations of $50 and $100. According to the financier, once seen as one of major candidates on a post of the head of the Federal reserve system, the withdrawal from circulation of large notes would help in the fight against corruption and crime.

In his column in the newspaper Washingtin Post summers welcomed the recent proposal of the Ministry of Finance of the EU limit circulation banknotes in denominations of €500. He also recalled that “in certain circles” this bill known by the nickname “Ben Laden”, and the high cost (six times higher denominations of $100) makes it especially attractive for illegal carriers of large sums — $1 million in banknotes in €500 Euro weighs a little less than a kilogram, and in denominations of $20 — more than 22 pounds.

However, large dollar bills, according to Sanders, is also favorable, first of all, criminals and conditioners, because the existing technology has eliminated any need for high denomination banknotes in the legitimate trade.

“Better the adoption of unilateral measures in Europe would be the conclusion of a universal agreement on the cessation of issuance of currency value above, for example, $50 or $100. Such an agreement would mean no less than anything else of the G7 or the G20 in recent years. Such an agreement would show that the world financial organizations in condition to oppose “big money”, for the interests of ordinary citizens,” writes summers.

The former head of the U.S. Treasury recognizes that it would be premature to speak of total withdrawal from circulation of large banknotes, however, the moratorium on the printing of new banknotes, according to summers, would help make the world a better place.

Previously with a call to ban Bank notes of large denominations to combat organized crime were made by the experts of the Government school. John F. Kennedy school of government at Harvard University. They explained this by the fact that, according to their study, the share of cash in the amount of criminal transactions account for nearly 60% per year.

According to the U.S. Treasury, until January of 2016 has been printed 57.6 million banknotes are in denominations of $100 and 41.6 million banknotes in denominations of $50. The total value of all outstanding dollar-denominated coins and banknotes of the fed is estimated in $1.39 trillion, of which approximately $1,08 trillion falls on the banknote in $100. The share of such banknotes is estimated to be about 28,35% — 10.8 billion from 38.1 billion was issued into circulation.

Recall that until 1945 the US printed banknotes in denominations of $500, $1000, $5000 and $10000 put into circulation until 1969. In 1969 the Ministry of Finance and the U.S. Federal reserve announced the withdrawal of banknotes from circulation, however, issued Bank notes are still considered legal tender. However, the total number of banknotes is small and they are mainly in the collections of numismatists.

The largest bill ever issued by the U.S. Treasury, considered appeared in 1934, a gold certificate with a face value of $100 thousand Such banknotes were issued specifically for payment between the member banks of the fed and the General public were reported. In Russia, the largest denomination is currently the banknote in 5 thousand rbl. has Repeatedly appeared rumors about the imminent issue of banknotes of 10 thousand rubles, but the Central Bank always denied.

“We don’t see the need for it and not even discuss this topic. Different kinds of rumors occasionally appear in the press, but it is not our initiative. Modern nominal range fully meets the needs of society. While the inflation rate did not decrease to the level of 2-3%, it makes no sense”, — declared in November 2015, the first Deputy Chairman of the Central Bank Georgy Luntovsky (quoted by TASS). He also noted that banknotes of large denominations used by the informal sector, and the level of pensions and salaries in Russia is ill-suited for the bills for 10 thousand roubles. “There are people who get 10 thousand rubles. So, to pay the salaries of one bill?”, — said Luntovsky.

In the summer of 2015 the Director of cash circulation Department Bank of Russia Alexander Yurov said in an interview with RIA Novosti that 43% of Russians prefer to keep money “under the mattress” and is often used in this five-thousandth banknote.

According to the Central Bank, the share of banknotes of 5 thousand rubles currently accounts for 19% of the total number in Russia issued banknotes, their nominal value is 70% of the total amount of outstanding bills.