‘Keep calm and carry cash’: Banknotes at home are key to preparing for crises like war, study shows

By Olesya Dmitracova, CNN

London (CNN) — Households should keep some cash at home so they can pay for essentials during crises, according to an analysis of four major disruptive events in Europe, including the pandemic and Russia’s invasion of Ukraine in 2022.

Consumer demand for banknotes surged in Europe during each of a string of crises, the research, published by the European Central Bank, showed Wednesday. Physical currency offers “distinct psychological and practical utility,” says the study, whose title urges the public to “keep calm and carry cash.”

The findings support the growing recognition among authorities that cash is “a critical component of national crisis preparedness,” the researchers write.

For example, they note, authorities in the Netherlands, Austria and Finland recommend that households keep between about €70 ($82) and €100 ($117) per person at home, or enough to cover essential needs for around 72 hours.

In Sweden, the recommendation is to hold enough cash to pay for things like food, medicines and fuel for at least a week. “Calculate the total cost of at least a week’s worth of these items for your family. Keep cash at home, in small denominations, for trading purposes if digital payment methods have been interrupted,” the official advice says.

Explaining banknotes’ appeal, the European Central Bank study says that in moments of acute stress the public sees cash as a reliable store of value and a resilient means of payment.

Indeed, “cash provides essential redundancy – a ‘spare tire’ – for the payment system,” the authors write. “This redundancy is vital for any system, as no system is infallible.”

The unprecedented Covid-19 pandemic saw sustained cash hoarding driven by prolonged uncertainty, including about income stability, they note.

Meanwhile, Moscow’s full-scale invasion of Ukraine triggered a spike in demand for cash that was concentrated in countries bordering either Ukraine or Russia. This suggests “people responded to heightened proximity to potential disruptions by accumulating portable liquidity,” the researchers write.

Ensuring that Europeans are prepared for potential crises, such as war, has been high on authorities’ agendas in recent years.

In March, the European Commission issued guidance saying European Union citizens should stockpile enough food and other essentials to sustain them for at least 72 hours in the event of a crisis. The 18-page document said Europe was facing a new, bleaker reality, citing the war in Ukraine, sabotage of critical infrastructure and electronic warfare as prominent factors.

And last year, Sweden and Finland updated guidance to their citizens on how to survive war. Booklets distributed to households also included instructions on how to prepare for communications outages, power cuts and extreme weather. The advice ranged from stockpiling bottled water and sanitary products, to growing edible foodstuffs at home.

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CNN’s Sophie Tanno and Sana Noor Haq contributed reporting.