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Eurocrash: get ready for Millennium Bug II

As if the banking industry didn't have enough to worry about, some software experts are warning of a potential catastrophe: and it's all to do with exchange rates calculation.

More specifically, the security of all sorts of transactions is under threat, because Sterling is so weak against the Euro. If and when the Euro becomes the more valuable currency, a plethora of code will start groaning and wheezing. If it falls over, the banking system will be thrown into chaos.

(Now, you might say that I'm indulging in unnecessary scare-mongering and hyperbole, and you might well be right. But I was too young to get a good crack at spreading fear and loathing during the run up to Y2K, and I demand the right to have a go now, dagnammit.)

Anyway, I'm not entirely making it up. Here's a contact who writes and maintains banking transaction software for a major high-street and merchant banking group:

"If I tell you I'm going to buy 10 widgets from you, and those widgets are priced in Euros, but I'm going to pay you in Pounds, we need to decide on an exchange rate," he explains.

"Say I give you an exchange rate of 0.97. We need to know which way round that is: is it £0.97 per Euro or the other way round?

"All UK banking code is heavily GBP-biased, so there's loads of code kicking around which assumes that if a rate is < 1 then that means 'how many Pounds it costs to buy one', and if it's > 1 then that's 'how many you get for a Pound'.

"This reflects the fact that there are almost no currencies more valuable than Sterling.

"Which is fine, until the Euro becomes worth more than the Pound, and the code stops making sense. At which point transactions will start to back up. Fast."

So there you have it. It may be something and it may be nothing, but if the coders are worried, it's worth keeping an eye on. And if the Eurocrash does strike, remember where you read it first.

(If not, keep it schtum, right?)

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