WORKING ON EMU
14
info exchange
WHAT'S NtwS Issue 12 December 1996
While EU member states' politicians jockey for position on the introduction of a
single European currency, financial institutions throughout the region, rather
than governments, are taking the lead in informing the public, both corporate
and retail, on the consequences and implications. What's NewS talks to Hans
Reusch, newly appointed EMU coördinator.
Late last month, Holland's leading
financial daily newspaper, Het Financieele
Dagblad, publicized the results of a
disturbing study which showed that two-
thirds of the Dutch business community
still remains uninformed about the
potential consequences of European
Monetary Union (EMU) and the
forthcoming introduction of a common
currency (called the euro). What's more -
according to the investigations carried out
jointly by Moret Ernst Young and
Rotterdam's Erasmus University - the
corporate treasuries of almost 90 percent
of Dutch firms have given little if any
thought to conversion issues at all. If these
levels of unpreparedness are mirrored
elsewhere in Europe, they will be even
more pronounced among the EU's trading
partners in Asia and the Americas.
POTENTIAL OPPORTUNITIES
Hans Reusch has been appointed to head
up one of the working parties which is
responsible for the Euro coordination on
head office level as well as between the
branches and head office. He believes that,
although the study results are disturbing,
they also signal a potential opportunity
for the bank: to help its clients narrow this
perceptual gap. But to help its clients and
capture EMU-related opportunities both
domestically and abroad, Rabobank first
needs make its operations 'euro proof' in
time for the January 1, 1999 deadline. The
conversion of procedures and support
systems is now gathering pace.
AMBITIOUS PLAN
Positive steps have also been taken on the
operations and information technology (IT)
side, with the ongoing conversion of
payments systems, documentary credits,
forex and all the rest. The IT conversion
offers a singular opportunity for the bank to
strengthen its electronic relationship with
important customers, notesReusch.
ENERGIZING THE ORGANIZATION
At the start of November in Frankfurt, the
latest developments in the conversion were
discussed among euro coördinators of our
European offices, whose role in the
process is crucial. The most pressing need
at present is to energize the commercial
side of Rabobank International's
preparations - in corporate finance,
corporate banking, investment banking,
mergers acquisitions and so forth. 'Line
managers simply have to become more
aware of the problems and opportunities
that our clients are likely to face in order
for the bank to successfully convert its
EMU implementation into a commercial
opportunity,' Reusch observes.
SINGLE BANK DEVELOPMENT
For example, the creation of the single
currency will bring the elimination of
currency risk and a more transparent and
competitive agribusiness market. This is
-ï». EMU - HOE
VERTELLEN WE HET
0ÊÊ-'1 ONZE KLANTEN
Uit studies is gebleken dat
slechts eenderde van de Nederlandse
bedrijven over informatie over de EMU
beschikt. Nog verbazingwekkender is dat
90% van de corporate treasuries tot nog toe
nauwelijks aandacht heeft geschonken aan
de valuta-omzettings problematiek. Wij zijn
al enige tijd bezig met wat de consequenties
voor onze bank zijn op het gebied van
procedures en systemen en hoe wij ons in de
toekomst moeten positioneren. Nu wordt het
tijd om onze klanten zoveel mogelijk op de
hoogte te brengen. De commerciële mensen
zullen hierin een grote rol moeten spelen.
likely to bring more mergers and
acquisitions in Europe. Non-European m
trading partners confronted with
companies offering products in a single
currency in Europe will also find it easier
to make decisions; their banks will
probably jettison the current fragmented
network of correspondent banks in favour
of closer ties with the single European
bank. This is an opportunity as well:
nowadays Rabobank is firmly established
in the guilder niche. For the euro future, it
has to offer the same service under the
single currency regime, leveraging the
Triple-A status as multiple money markets
evolve into a single, integrated sphere.
COORDINATED ACTION
'Line managers need to thinking two years
ahead, but instead they are totally focused
on the more immediate commercial
requirements of everyday business. There^
is this constant struggle between daily
priorities and those of the Euro
conversion. It is easy and also very
dangerous to let the immediate issues
dominate your time and attention and fall
into complacency in the all-important
EMU field,' Reusch argues. 'The number
one priority at this moment is for
everyone to enlarge their awareness of
about the sheer magnitude of the changes
we expect.' Reusch hopes to produce a
coordinated action plan for the
commercial side by the early part of next
year - based on input from members in
the Rabobank International Euro Working
Committee looking after Operations/IT,
payments services, trade risk management,
financial administration and all the rest.
PRESSING TASKS
'Organizationally, I understand that you
have to inspire awareness from the bottom
up if you really want to get anything
done,' he says. 'My task is to stimulate a
partnership that will make people
appreciate the pressing tasks we face.'
Reusch's action plan will be used as the
basis for the formulation of an EMU
transition budget. Meanwhile, as part of
the ongoing information campaign, a fact
sheet on EMU has been posted on
Rabobank's Internet site
(http://www.rabobank.nl). This seeks to
answer the 'ten most frequently asked
questions about the euro', it contains
information about EMUÖs commercial
consequences, as well as a useful
bibliography of EMU-related literature. At
present, most of this information is
available only in Dutch, but this
shortcoming will soon be addressed.
Moreover, plans are afoot to start a new
monthly EMU newsletter on the Internet
as early as the start of next year.
