To drive home his point, lawyer Jeffrey B. Golden raised a toilet plunger as an illustration of how American bankers feel about Europe veering toward a common currency.

"The concerns are primarily about the plumbing," said Mr. Golden, a partner in the firm of Allen & Overy. In other words, the European Union's plans for adopting a single currency called the euro by 1999 may look good, but beware of leaks.

The moment of levity came during an otherwise somber gathering of bankers, currency traders, and lawyers attending a conference Tuesday at the Federal Reserve Bank of New York on how European monetary union might affect American financial markets.

Outside the major money-centers, it is believed that few bankers in the United States have given the matter much thought, which was part of the reason the New York Fed held the conference. "It's sensitivity training," said Fed First Vice President Ernest T. Patrikis.

Bankers at the major money-center institutions say they are most concerned about how a single currency would affect the legal status of long-term derivatives contracts. They also want to know which bank holidays a unified Europe will be observing.

If a derivatives contract, for example an interest rate swap, involves francs, bankers wonder which source they should use for interest rates quotes: the familiar London interbank offered rate, (Libor), the Paris interbank offered rate (Pibor), or the yet-to-be-unveiled Eurobor.

"Where and when would (a banker) go?" asked Mr. Golden. Meanwhile, the British Bankers Association is further complicating matters by saying it will offer quotes in francs to compete against Eurobor.

After this is sorted out, there is the hardly secondary matter of when trading will occur.

There would over 50 bank holidays annually if those of all the countries involved are observed, thanks to Europe's long and diverse history. Clearly some bankers will have to forgo some traditional holidays, said Arthur S. Magnus, managing director at J.P. Morgan & Co. in charge of global foreign exchange operations.

But even if they give up holidays, that wouldn't end the issue.

Major trading banks like Morgan typically settle contracts for francs in Paris and marks in Frankfurt. But under a single-currency regimen, all contracts could be settled in one European Union country.

But if Morgan chooses Paris as its settlement site, Mr. Magnus asked, might the New York bank then find itself unable to settle a contract for euros with a German company on Bastille Day?

"It will be a gargantuan task to figure this all out," he said.

In the meantime, however, uncertainty about the euro is basically good for American banks. Foreign exchange volumes soared to $2.2 billion in the first quarter after declining the previous three, according to the Office of the Comptroller of the Currency.

In fact, during the first quarter Citicorp and Chase Manhattan Corp. reported record trading revenues and nearly every other major trading bank reported much improved revenues.

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