Euro Trouble: Not Just a Discussion About Greece

In conversations with a client this week, it became apparent that there is a complacent attitude towards the potential break up of the Euro in many firms as “it is only Greece and our exposure is light” per this industry exec.  Whilst understandable, they are missing the point.  We posted our detailed thoughts on how investment management firms can prepare last week and ISS magazine has an interesting article that fits in with our views on this subject.   If Greece leaves the Euro, the precedent of countries leaving is set and therefore the chance of other, higher profile countries leaving is increased. It is our view that all firms must have a contingency plan in place to address the significant operational issues that will arise. When the euro was established, it was a well-signalled and strongly documented process which was relatively easy to follow. It is extremely unlikely that any departure will be dealt with in the same manner. The time to assess the impact and deliver a prudent and thorough plan is now.

- Steve Young