U.S. firms prep for Greece exit from euro
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Heidi Moore: I’m Heidi Moore in New York.
JP Morgan says that big U.S. companies are far more worried than European ones about whether the euro will survive. So the bank put together a kind of “What to expect when you’re expecting” of financial disaster.
John Gibbons: We published a book, you know it’s a small booklet. It actually details 50 points that every corporation should be considering in terms of being ready for the introduction of a new currency.
John Gibbons is in charge ofJP Morgan’s treasury services in Europe, the Middle East and Africa. He’s also been helping those big companies create new bank accounts to hold a currency that doesn’t even exist yet.
Gibbons: The clients established these what we would call a “phantom currency” on their systems, and then on our systems, and are ready to operate in a new currency overnight.
Creating a plan to handle a new currency isn’t easy. For one thing, where would you start?
Wynne Rumpeltin: There’s definitely been times when the market has been worried about Spain, worried about Italy, Portugal, Ireland, Greece.
That’s why Wynne Rumpeltin, a vice president of sovereign risk at State Street Bank, compares her company’s plan to military strategy.
Rumpeltin: We have a sort of warroom that we would create. People understand that they’d have to be at their stations.
Adam Schneider, an executive at Deloitte Consulting, says the plans he’s seen from U.S. companies are enormous.
Adam Schneider: It’s probably best to think of them as looseleaf books, on the order of hundreds of pages.
U.S. companies have started acting on them already. Many have renegotiated their contracts to switch out of euros and into dollars and British pounds. And the chemicals giant FMC is asking its Greek clients to pay in advance.
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