Monday, December 5, 2011

Setting up a newco: Which currency?

Winner takes it all © fintag

News comments:
The Euro collapses this week.

So I have a dilemma. As you know the UK is not a place to do fund business. There are 3 places left in Europe to set up a fund - Malta, Ireland and Lux. Each has its pros and cons but Malta is the preferred choice. That was the easy bit.

The complex decision is what accounting currency should this entity be based in?

The Euro is the currency of Malta. Tweaking the Memo & Arts will be tricky but it will be worded such that if the Euro is no longer a valid currency it will rebase to GBP at some formula fx rate. However, this is trivial against existing forward / future contracts in Euros. In fact any contract with Euros mentioned.

What if you have bought some French debt with redemption in 2047 for example? If you don't get your Euros back, surely its a default?

When the Euro collapses the winners will be the lawyers.

Today's shorts:
No jobs (cityam)

City of London now run by the Germans (cityam)

Today's longs:
Talks to solve Euro crisis (bloomberg)

eBay to ban the sale of old Euros.


Anonymous said...

Bitcoins surely
I preferred the old blog, of course no-one bothers to comment here anymore due to the change