Checks and balances

The U.S. banking system is one of the most entertaining in the world. In Germany, you simply ask your bank to wire some money to another bank. In the U.S. you send checks around using postal mail. Did you ever wonder about the saying of "the check is in the mail"? Here is a story of how big this absurdity can become.

In April 2005 I had brought a Berlin Buddy Bear to Stanford as a present to be given to Gerhard Casper, a former president of Stanford and now a professor at the law school. The present was handed over during a Kamingespräch with Prof. Casper, organized by the Stanford German Student Association of which I am a former president.

The SGSA was paying for the present, so I expected to receive the money back that I had laid out. In Germany, Fabian Lischka, the current treasurer of the SGSA, would simply have had the bank transfer the money from the SGSA account to my account. To get the money from the SGSA U.S. account to my U.S. account, however, required the following sequence of steps:

1. Fabian asked the SGSA's bank to cut him a check for my expenses.
2. This check was handed over to a friend of mine, who was visiting Germany.
3. She brought the check to my house in Berlin, during her visit to this beautiful city.
4. Next I signed off the check and put it back in an envelope to be sent to my U.S. bank.
5. My friend took that letter and brought it back to the U.S. where she dropped it into a mailbox.
6. My U.S. bank, having received the check, sent it back to the originating bank.
7. Using the inner workings of the U.S. banking system, the money made it into my U.S. account.

Voila! That wasn't so complicated! If you are used to it...