My boss just wired me some money. Nothing strange about that. It’s part of his job. And as usual, the transfer will take three days.
Now, that’s more strange, however.
It’s the same with most money transfers these days, which are now almost as quick as during the days when you would give the money to a runner on a horse and have him gallop off to the recipient in person. Today, using computers and a supposedly blink-of-an-eye-speed monetary system, transfers between banks in the known Western world commonly takes three days.
Some banks take three days even for transfers within the same bank. None mentioned, none forgotten: they are all sinners one way or another.
Now can anybody explain to me where the money is in the meantime? Held up in some digital roadblock on the Information Superhighway? Having to present its papers at some virtual checkpoint in today’s borderless global Internet world?
More interestingly still, exactly how is this possible? I mean, this is supposed to be the age of modern computer technology, where I can send a message to Australia and back in a split second. In fact, this very blog post may very well have spun a few times around the globe before reaching your computer screen. We read every day how investors press a button and ZOOM! goes a batch of dough equivalent to Belgium’s national debt into some offshore investor’s account (and out from under the feet of some poor company, sending it into bankruptcy, but that’s another story).
So how do the banks actually manage to make a money transfer for us common mortals last three days? Do they use computers at all, or have they upgraded to homing doves? Or smoke signals? Digital smoke signals, that is, having some poor bloke do the miserable smoke signals in binary – “one, zero, one, one, zero, one, zero, zero, cough, cough, oh, bother, there’s supposed to be a one there, I’ll have to start over again”.
Or is there some gigantic cash vault somewhere, where they pour all the bread in for a few days in order to have some time for a money-rolling orgy, whith bank managers wallowing in dollars like Scrooge McDuck and back-office clerks pouring fistfuls of euros over their heads?
The prosaic answer is of course that they are sitting on the money for a few days, cashing in interest by the minute, while not having to pay any interest to the rightful owners of the money.
You and me, that is.