The continuing anxiety in Euro-land has kept many treasurygroups busy with both planning for country and currency situationsand taking precautionary actions. Some companies are moving cashselectively within euro-denominated countries and others are movingfunds out of euros entirely to reduce their exposure. And morecompanies are managing counterparty risk more closely across arange of short-term asset classes and maintaining stricterdiversification standards.

As the Greek crisis has played out, multinational andEuropean-centric firms have shifted their mind-sets and actions intwo notable ways. First, the presumption that a euro breakup or acountry's leaving the euro was not very likely has been replaced bya growing conviction that 'some countries' leaving the euro is allbut inevitable and the question is when, and whether it will be anorderly or disorderly exit. Second, companies tracking withincreased concern what is happening in Portugal, Ireland, Italy,Greece and Spain (PIIGS) have gone from simply modeling basicscenarios to taking preventive steps. A number of these steps havebeen publicly communicated.

There are several main trends with cash movements. First, manycompanies moved most of the cash they had in Greece to othercountries some months ago. Second, significant cash stores held inthe other PIIGS are regularly moved to other euro countriesperceived as far more stable, such as Germany. Third, somecompanies are moving funds out of euro-based countries to non-euroEuropean countries, such as the UK or Switzerland. Finally, wecontinue to see and hear of some companies moving their euro cashexposures into U.S. dollars even if these funds are held withinEurope.