Swiss misses
BEWARE of the baker of Swiss rolls who says that his corporate treasury is a profit centre. A bank might as well seek to boost its profits by baking Swiss rolls. Allied Lyons has paid £150 million to learn that lesson — for a second time. It was a similar folly, financing Swiss rolls with Swiss francs, which ended J. Lyons's indepen- dent existence and drove it into Allied's arms. Australia is now crawling with writs from companies which borrowed Swiss francs (such nice affordable interest rates) and now hope to get their money back from the banks which, so they say, sug- gested it. Non-financial companies should use financial markets to protect profits, not to try to make them. Leave that to the banks, and watch the results. Every so often they announce huge losses on foreign exchange `due to unauthorised dealing'. This happened to the Last National Bank of Boot Hill, which added a postscript 'that is, nobody authorised the guy to get it wrong'.
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