Greece yesterday came under fresh pressure to strike a deal with its private-sector creditors
Thursday January 26,2012
By Peter Cunliffe
CITY firms are bracing themselves for the break-up of the euro and stress-testing their systems ready for the possible restoration of currencies such as the Greek drachma.
Greece yesterday came under fresh pressure to strike a deal with its private-sector creditors to prevent a chaotic debt default, while Portugal’s borrowing costs hit fresh highs amid worries it could be plunged into crisis.
Meanwhile UK banks, currency traders and financial institutions continued to work on contingency plans in case of a single currency break-up.
Specialist foreign exchange broker Caxton FX, which believes Greece is “perilously close” to dropping out of the euro, has been running tests to make sure it could handle a switchover to the drachma.
 Greece yesterday came under fresh pressure to strike a deal with its private-sector creditors  |
Managing director James Hickman said: “What will happen is that an interbank exchange rate will be created by market makers who will then start selling the new currency. We will then list the new denomination on our systems and begin trading.
“We have been testing our systems with new currencies and their respective codes so that we are able to support our clients’ currency requirements and respond to any situation.”
Hickman added: “There will be lots of our clients with mortgages or commercial interests out in Greece and testing the new drachma will assure them that we can react to anything the world economy throws at us.”
The Financial Services Authority has been monitoring banks and financial institutions since November when it told them to make plans for “the disorderly departure of some countries from the eurozone”.
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