The chief executive of the multi-billion pound Lloyd’s of London has publicly admitted that the world’s leading insurance market is prepared for a collapse in the single currency and has reduced its exposure “as much as possible” to the crisis-ridden continent.
Mr Ward says Lloyd’s had been working hard on contingency planning and had the capability to switch settlement of European underwriting from euros to other currencies.
“We’ve got multi-currency functionality and we would switch to multi-currency settlement if the Greeks abandoned the euro and started using the drachma again,” he said.
Lloyd’s has de-risked its asset portfolio in recent years, with investments split equally into cash, corporate bonds and government bonds, mostly in the US, UK, Canada and Australia. “We have de-risked the asset portfolio as much as possible,” he said.
The contingency planning comes as German politicians piled the pressure on Greece ahead of elections on June 17.
A conservative member of German chancellor Angela Merkel’s cabinet said today Germany would not “pour money into a bottomless pit”.
On Sunday, Swiss central bank chief Thomas Jordan admitted his country is drawing up an action plan in the event of the euro’s collapse
Full article: Lloyd’s of London preparing for euro collapse (The Telegraph)