Europe's richest investors are moving money out of euros amid fears the single currency may not survive a sovereign debt crisis, with U.S. dollars and yen among the favoured destinations, bankers say, Reuters reported.
One private banker at a global group, who specialises in clients worth at least $5 million, said his team had seen a pick up in clients fleeing the euro since Germany's central bank had to step in to prevent failure of a bond auction last month.
He described the trend as "between a trickle and a flood", highlighting U.S. dollars as the favoured haven, followed to a lesser extent by Japanese yen.
British pounds are seen as too closely aligned to the fate of the euro zone to act as an effective buffer against a possible collapse in the currency union, he added, speaking on condition of anonymity.
Richard Cookson, chief investment officer at Citi's private banking arm which caters to clients worth more than $25 million, also said he had seen clients "shifting out of euros".
He warned, however, that the complexity and potential seriousness of a euro breakup made it difficult to know how to protect wealth.
"This is one of the defining moments in European and global economic history and if it goes bad -- it gets very, very bad indeed," he said.
"You can hedge the risk of a currency going down sharply and hedge against it going up, for example, but how do you hedge against it disappearing altogether?"
Ronnie Ludwig, Edinburgh-based partner in the private client team at accountants Saffery Champness, said he had seen some clients move more money into sterling, braving negative real interest rates for relative peace of mind.
Among the attractions are a fiscally conservative government and past willingness to bail out failing banks demonstrated in the 2008-2009 financial crisis when a number of British lenders were fully or part nationalised, he said.
"There's a sense of concern around the euro and some people are moving to other currencies like sterling. We're perceived to be doing the right things," he said.
London estate agents have reported increased interest in the city's high end residential property market from European cash buyers seeking a shelter from the continent's financial storm.
Citi's Cookson also told of a friend living in London's fashionable Notting Hill neighbourhood who had sold his home for 40 percent more than the market value to a Russian buyer who had approached him in the street as he was leaving the house.
The experience illustrates the allure of London property as one of very few assets still regarded as safe that are available to wealthy investors, Cookson said.
Some bankers played down the trend, however, reporting that while wealthy investors were mindful of increased risks associated with a systemic crisis, most were keeping their heads. Read more.
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