It's All Greek to Me

What would happen if Greece converted back to the drachma? Anthony explores the possibilities.

Today I had an interesting conversation with Brian Nadzan, chief development officer at trading platform provider TradingScreen, about what the fallout would be if Greece switched from the euro back to the drachma.

Right now these conversations are purely hypothetical, as no one really knows what would happen if Greece left the euro. After all, this is a complex issue that would affect everything from trading to investment strategies to technology.

There are so many issues here—I’ll cover them soon in a bigger story—but for now I’m specifically referring to the impact on the vendor community and IT staffs at buy-side firms

From an IT standpoint, converting to a new (or old) currency doesn’t appear at first to necessitate any kind of massive IT overhaul. I don’t mean to minimize the impact of such an event; I’m talking specifically about technology here.

If the drachma came back, that would mean 10 years of drachma data lost, as well as all the data cross-referenced against other currencies like the euro, sterling or dollar. This would no doubt lead to volatility—more than we’re already seeing—which is also an investment strategy issue.

Nadzan points to two things in play in this hypothetical situation: First, this is a good opportunity for the vendor community to be in constant communication to help firms through the transition. Second, this is yet another example of why software-as-a-service (SaaS) and cloud have seen increased adoption in recent years.

Cloud is not SaaS, nor is SaaS cloud. But there are similarities. And in this case, the ability to change a code, flip a switch, or add a currency is more of a "minute event," as Nadzan says, when it can be done via—in TradingScreen's case—a SaaS environment, or for other vendors and cutting-edge hedge funds, in a cloud environment.

WatersTechnology's editor-in-chief Victor Anderson wrote about this yesterday, and how it relates to a power outage experience by Incisive Media's Broadwick Street offices.

"In this day and age, all commercial enterprises should be able to offer employees remote, 24/7 access to all information that they have been cleared to access, and the most logical, most efficient, and most cost-effective way of delivering that access is via the cloud," Anderson writes.

I agree, and not just because I'm trying to score points with my boss. And I'd add that in this age of incredible volatility, being able to change on the fly is imperative.

If other countries eventually followed suit and dropped the euro, firms that want to capitalize on that volatility or that want to quickly improve their risk processes would benefit from cloud and SaaS solutions as well.

That’s what I think, but obviously, there is no indication that such moves are imminent. If you have a different view, I'd love to hear it. Send me an email at anthony.malakian@incisivemedia.com or give me a call at +1 646-490-3973.

Some Housekeeping
Going forward, James Rundle will take over the responsibility of writing the weekly letter digesting and analyzing the news over at Sell-Side Technology. James has a great ability to convert complex information into thoughtful analysis and opinion pieces, and I’m sure you’ll enjoy his weekly letter.

Additionally, I have been promoted to US Editor of Waters and WatersTechnology.com. The old saying goes that you rise to the level of your incompetence, so let's hope I have a few more notches to go before that happens.