NYSE Euronext Has Contingency Plan For Euro Breakup--CFO

NYSE Euronext (NYX) has drawn up contingency plans for its European markets in the event of an upheaval in the euro currency, a senior executive said Friday.

The Big Board parent isn't preparing for an imminent dissolution of the 17-nation currency regime, but has in place steps that could be taken to migrate business in products that are tied to the euro.

"It's prudent for all companies that operate in Europe, particularly if you have products based on the currency itself, to have a plan should things deteriorate," said Michael Geltzeiler, chief financial officer for NYSE Euronext, in an interview.

The exchange firm runs in London Europe's second-largest futures exchange by volume, where traders do business in short-term interest rate futures and options designed to hedge exposure to the euro, along side other currencies. Chief among these are Euribor contracts, linked to the anticipated cost of borrowing euros on the London interbank market.

NYSE Euronext runs other stock and derivatives exchanges in France, Portugal, Belgium and the Netherlands. About 30% of its business is in euros, according to Geltzeiler.

The euro currency doesn't now face the same dire scenario it did in late 2011, when several countries in the bloc were grappling with difficult fiscal choices. The deepening gloom prompted some trading platforms, including the EBS foreign-exchange market run by ICAP PLC (IAPLY), to prep for changes to the euro's makeup and the return of some shelved currencies, such as Greece's drachma.

The borrowing costs for most of these countries have since eased, and the European Central Bank's measures to boost liquidity have lifted some of the funding pressures on the regions' banking system.

Greece has come into focus again this week as its caretaker government confronted mass demonstrations against new austerity measures required to secure another bailout for the troubled nation. Stocks broadly fell Friday on fears that the measures wouldn't be enough to resolve Greece's woes.

"At the end of the day our instruments are used as hedging tools," said Geltzeiler. "If the [euro-zone] situation were to evolve in a different direction, we would be extremely well positioned to migrate our business accordingly."

He declined to comment on specific aspects of NYSE Euronext's contingency plans.

Futures exchange giant CME Group Inc. (CME), which offers a slate of currency futures and is developing a nascent European clearing facility, has been "closely monitoring" developments in the euro zone over recent months, according to a spokesman. He declined to comment on any such contingency plans in place at CME.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com

-Erin McCarthy in New York contributed to this article.

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