Global Capitalism Needs to Know Nations' Holidays

NEW YORK -- For the financial services industry, the emergence of global capitalism has unleashed a new horror: global holiday schedules.

Say you are in Warsaw, Poland, on a particular Wednesday, trolling for business opportunities. It is a short hop to Lithuania, so why not call on a few bankers in Vilnius?

Here's why not: That Thursday is a holiday in Lithuania, and when Lithuanian holidays fall on a Thursday, the Friday after is also declared a holiday. If you were going there on the previous Saturday, you would need to know that it became a normal working day. Got that?

And though inadvertently landing in Vilnius on a four-day weekend is a mere waste of time, consider the coming millennium celebrations. Financial caretakers are trying to close out important transactions before the end of the last business day of 1999. But just when will that be? New Year's Day falls on a Saturday, and some countries don't provide a weekday off when holidays fall on a Saturday. Except lately, several of those countries have decided to make Friday, Dec. 31, an ad hoc holiday.

Fortunately for the tacticians and quartermasters of international finance, there is Paul Spraos.

Spraos, 40, is the London-born founder of Swaps Monitor Publications Inc. in New York, which publishes a newsletter covering the exotic world of interest-rate swaps and other financial derivatives. Since 1992, Spraos has also produced an international holiday calendar, which heroically tries to identify all the holidays f "bad business days,'' he calls them f that will occur in more than 100 countries over the next 100 years.

On Sept. 8, Spraos (rhymes with "house'') will begin offering his calendar over the Internet f at f a step he says will make it far easier for him to deal with the growing tendency of local governments to tinker with their holiday schedules.

"Holidays are changing more and more frequently, at a rate that would amaze people who don't follow this,'' Spraos said. Various financial centers "are changing their weekends, introducing or deleting a holiday or adding the millennium holiday. Or maybe their soccer team just qualified for the World Cup and they've declared a spontaneous holiday.''

Why do such far-distant holidays matter so much?

Swaps and other financial derivatives can span many decades and typically involve large sums f $100 million is routine. The price of a swap is determined by calculating thecurrent value of all the payments to be made over the life of the deal. If some future payment dates fall on local holidays, the cash will not start earning interest as promptly as anticipated, throwing the price calculations out of whack.

"We need to know holidays approximately 30 years out,'' explained Larry Weissblum, a vice president at the capital markets unit of Sumitomo Bank and a subscriber to Spraos' calendar.

The millennium countdown would have been even more worrisome without Spraos' service, added Adrienne Mageras, the operations support director for General Re Financial Products, a global derivatives dealer. "You need to know that you can't make payments on that day in that particular country f and we've had six or seven centers declare millennium holidays in just the past two months,'' she said.