http://tomorrowstransactions.com/2009/01/helping-out-bankers/ Thought leadership from Consult Hyperion Tue, 09 Sep 2014 00:19:19 +0000 hourly 1 http://wordpress.org/?v=4.0 http://tomorrowstransactions.com/2009/01/helping-out-bankers/#comment-1206 Fri, 23 Jan 2009 21:12:05 +0000 http://ec2-54-201-142-57.us-west-2.compute.amazonaws.com/2009/01/helping-out-bankers/#comment-1206 > If I’ve understood it correctly,
> then, the more ATMs there are in
> a country then the more money that
> consumers will leave in their current
> accounts, presumably because they
> believe it will be easy to get the
> cash they want when they need it!
Hey Dave,
This is a *direct result* of something called the Baumol-Tobin model. This originally modelled the cost of “going to the bank” so as to predict how much cash the old Lady needed to print. It is good to see that McKinsey concurs!
The model can be used for all sorts of observations. Back in 1996 or so I used it to predict that digital cash would not impact monetary policy one dime, see URL above. Also, with digital cash of the Internet variety, because the cost of going to the bank is effectively (or should be) zero, all money will be left at the bank.

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