Saturday, December 24, 2011

Banks Struggle With Euro Contingencies

Wall Street Journal
December 24, 2011

As the euro-zone debt crisis intensified in recent months, at least two global banks took steps to install back-up technology systems that could handle trades in old European currencies like drachmas, escudos and lire.

That, the banks quickly found, is not so easy in a financial world that is trying to both exhibit confidence in the ailing euro and—just in case—plan for its possible demise.

Technology managers at the banks contacted Swift, the Belgium-based consortium that manages the network used in financial transactions, said people familiar with the matter. The banks wanted Swift's technology support and the currency codes that would be necessary to set up the backup systems.

But Swift declined to provide some information for such contingency planning, including whether old codes could be used in the system, said the people familiar with the matter.

That is partly because officials there feared that releasing the information could fuel further doubts and instability in the euro zone, these people said.


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