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Foreign Exchange

Corporate treasurers ‘well positioned’ for eurozone breakup

A survey of corporate treasurers from large multinationals showed that a vast majority have taken steps to minimise, and in some cases, avoid exposure to potential bank failures caused by a eurozone split.

Some 53.5% of the 75 corporate treasurers surveyed by IT2 Treasury Solutions, a treasury management system provider, said they thought it more likely than not that at least one country would exit the euro within the next 12 months. The survey showed that nearly 75% considered their companies’ exposures to the most vulnerable eurozone economies were satisfactorily managed or hedged.

“Treasurers in multinationals believe themselves to be well placed when it comes to managing potentially eurozone exposures and remain generally positive about their ability to weather the systemic fallout from any European exit,” says Kevin Grant, CEO of IT2.

However, that is not to say corporates would be unaffected by the sudden exit of a distressed eurozone country.

Only 10% said they would be able to implement the necessary change to their systems, policies, positions and controls to manage their treasury operations in less than a week after a fragmentation of the eurozone. Some 32% said they would require less than a month, while 35% said they would need up to three months before they could implement the necessary procedures.

The survey was conducted anonymously based on a sample of 75 senior treasury professionals.

IT2 said nearly all representatives were in charge of the treasury operations of multinationals with a turnover of between €2 billion and €20 billion. Respondents ranged from a global airline and niche banks, to chemicals businesses and a European retail giant.

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