Swiss Re Ltd. (SREN) Chief Risk Officer David Cole said the world’s second-biggest reinsurer has for some time been looking at “mechanisms through which there would be disruption to the euro.”
A Greek exit from the euro would affect the Zurich-based company’s operations, assets and contracts and there would be a broader impact on economies, Cole said in an interview while attending an Institute of International Finance meeting in Copenhagen today.
“We’re looking across a broad spectrum of our exposures, the asset side of our balance sheet and the impact it would have on the economies in which we’re active and the clients that we serve,” said Cole. The company assumes there will either be disruption to the euro or a “significant” strengthening of the currency, he said.
Swiss Re said last month it didn’t hold any Greek sovereign debt at the end of the first quarter, while holdings of Spanish and Portuguese government bonds totaled $56 million. The prospect of Greece leaving the 17-nation euro region increased after parties opposed to the terms of the country’s second bailout won most of the votes in May 6 elections. A fresh round of voting will be held June 17 after politicians failed to form a government.
“The broader issue will be the impact on the economies not just in Europe but in the rest of the world,” said Cole. “I think it will be significant for all firms.”
Pierre Wauthier, chief financial officer of Zurich Insurance Group AG (ZURN), said on June 1 that an exit from the euro by Greece would cause problems as stock markets decline and sovereign bond spreads widen.
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