HSBC is testing its cash machines in Greece to ensure that they could cope with a return to the drachma if the country pulls out of the euro.
Britain’s biggest bank is taking the precaution because of concerns that Greece could abandon the 17-nation currency bloc amid political stalemate in the country. The bank is understood to have conducted extensive tests on the machines to establish whether they could be adapted to disgorge banknotes of different size and texture.
Greece returns to the polls on June 17 after last month’s election proved inconclusive, with no party able to form a government. The anti-austerity Syriza party has pledged to tear up Greece’s rescue loan agreement with the EU and IMF if it wins, which could herald the ejection of the country from the euro.
Like all UK banks. HSBC has been asked by the UK’s Financial Services Authority to assess both credit risk and operational risk in peripheral eurozone economies.
An HSBC spokesman said: “Like all banks HSBC has been working with its regulators to undertake preparatory work at multiple levels in the event of a sovereign default, an exit from the euro or any other eventuality.”
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The bank operates 15 branches in Greece and 25 cash machines. While the practical difficulties of introducing a new currency would be one headache for the Greek authorities if the euro is dropped, much more difficult would be the unwinding or conversion of myriad contracts denominated in euros.
The British banknote printer De La Rue has repeatedly refused to comment on speculation that it is being lined up to produce drachmas.
Other British firms have taken precautions over a Greek exit, or “Grexit”, with Dixons stockpiling security shutters for its Greek stores in case of riots and the drinks group Diageo reducing stock levels in the country.
The London-based Association of Corporate Treasurers is advising British exporters to insist on cash on delivery or to write contracts in other currencies such as dollars or sterling.