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Specialists at KPMG have warned that more than 75% of businesses they have spoken with are failing to consider the full repercussions of serious disruption in the eurozone. Most companies are looking hard at treasury and at contract terms but have no concrete plans to address operational issues such as counterparty failure, business continuity or the increased risk of error and fraud. Some businesses have not realised that they are materially exposed to the situation, directly or indirectly, through their customers, distributors or suppliers. Roger Bayly, head of turnaround and restructuring partner at KPMG, said: “We have been told by more than one executive that ‘this is just another Y2K, it won’t happen’. However, there are exceptions; some clients are taking the risk very seriously indeed. “For example, in the pharmaceutical sector a large amount of continuity planning has been done to ensure that life-saving drugs will be available to those who need them. Other clients in the consumer products sector with material exposures have had robust and comprehensive plans and monitoring in place since last summer. “It is our view that companies with material exposures should understand their risks and have contingency plans in place. “We talked with one company which was confident its customer base was solid because 80% of sales were with five large European corporates, three of which were on our internal failure watch list. “The flip side of the coin, of course, is that a break-up also presents opportunity. It may give some businesses the chance to gain market share or radically change business models as customer demands alter.” Other Business Money News
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