The European currency has now celebrated its one-month birthday, but what was once speculated to be potentially as catastrophic as the millennium hurricane, the euro breezed through Asia without leaving any notable damage.
"What we've heard from banks so far (is that) the operation of the business, regarding their internal operation, with respect to the euro has been quite satisfactory and smooth, so they've done very well on that front," said Raymond Li, executive director, banking policy at the Hong Kong Monetary Authority.
There was a lot of uncertainty over whether euro-converted systems would be able to hold up and operate smoothly when the transition took place, according to Michael Tarlinton, marketing manager, Reuters Asia.
Risk management was a major consideration for information technology (IT) managers and the focus was on them to ensure that their organisations' IT systems and applications continue to work well during and after the euro launch, said Tarlinton.
Reuters initiated a major exercise in early 1998 to ensure that its software products and information systems are euro-compliant, he said. The company provides financial analytical software applications and designs information management systems for financial institutions. Reuters converted four million items of data on a quarter of a million financial instruments in preparation of the euro, invested 300 man-years and 10 million pounds in its euro conversion program, he said.
Once stabilised, the European currency will be a force worth reckoning, said Tarlinton, and will have an impact on world-wide trade, Asia included. The European Union had indicated that the euro-zone would form the world's greatest trading power with 1997 exports 25 per cent larger than those of the U.S. and twice those of Japan, he said. There are 291 million people living in the euro-zone, he noted, referring to the population of the 11 participating countries that include Germany, France and Ireland. There are 269 million people in the United States and 126 million in Japan.
"The euro, the yen and the US dollar will be the three biggest currencies in the world," he stressed. "Singapore and Asia simply cannot afford to ignore that." He noted that a number of European financial institutions have expressed interest in positioning themselves in Asia to assist businesses here in trading with the European market. The euro currency has simplified complexities previously involved with transacting in the different European currencies and will encourage organisations here to trade with Europe, he said. "It's an easier message now because you've removed the currency issue."