A survey by niche Belgian corporate bank Artesia Bank, formerly Banque Paribas Belgique, at the end of last year suggested a relatively quick switch by companies.Two thirds of the large firms it surveyed said they would open euro accounts before the end of 1999, with most hoping to use it for all non-Belgian payments and receipts. Half of those questioned even envisaged using the euro for domestic payments.Ironically, given all this, two thirds said they would still want their banks to detail all transactions in the local currency and euro. That option is being offered by all banks, whatever their niche or nationality.One comforting message from Artesia’s multinational, multi-currency customers is that there is a marked reluctance to concentrate all their banking activities in one country.In theory, concentration should be one of the logical consequences of the single currency and it has been one of the biggest factors fuelling the recent wave of big bank mergers and take-overs. However, Artesia found only 38% of companies questioned expected to restrict their accounting to one country.Retail and specialist banks have already begun to reorientate and diversify their currency operations to make up for the disappearance of their former core business. Belgian retail bank Generale Bank has been preparing for the disappearance of 65% of its exchange business, which is currently in the currencies of its neighbouring countries.East European and Asian markets have been among the favourite options for diversification. However, the recent currency turmoil in Asia has made this a high-risk business. In some cases banks, such as Belgium’s Kredietbank, have gone one step further than their rivals and bought into their Czech and Polish counterparts.Despite this diversification, a large amount of business will still be focused on trading the euro against the dollar and yen. Most banks agree that the euro will become the world’s second-largest reserve currency after the dollar.With so many banks and traders concentrating on the euro, there are concerns that dealers will follow the market trend like sheep and exacerbate volatility in the new currency, especially as it strives to establish its credibility.A weak currency with low interest rates would be good for economic growth, but would encourage the flight of footloose capital to the banks of non-euro countries such as Switzerland and the UK. In or out, no European bank will be immune to the euro’s success or failure. One of the biggest questions for banks, and the rest of the financial services sector, is how fast clients will channel all their transactions into the euro. Banks and other financial institutions must offer a charge-free change-over between old and new currencies.A fast move into the euro would create a snowball effect as companies paying and demanding payment in the currency forced others to follow suit. The alternative scenario, in which companies stick with the francs, lire and deutschemarks they know, would obviously have a braking effect on the euro.Banks would prefer a relatively fast change-over. A big bang launch of the euro rather than the long, three-year transition period was the option the financial community wanted, since the latter burdened them with running parallel accounts for a long period.