U.S. banks in great shape for Y2K, regulators saygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread |
U.S. banks in great shape for Y2K, regulators sayBy Caren Bohan
WASHINGTON, Sept 16 (Reuters) - U.S. banks are well prepared for the year 2000 date change and Americans need not fear for the safety of their money, key regulatory officials insisted on Thursday as they sought to reassure a wary public.
A team of officials from agencies such as the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of Thrift Supervision stopped short of promising that that there would be no snafus associated with the turn of the millennium.
But at a news conference, all of the officials said any problems would be few and likely minor and that the regulatory agencies were fully prepared to cope with them.
"The good news today is that there is no bad news," said FDIC Chairwoman Donna Tanoue. "Although no one can say there won't be glitches -- after all there are glitches now -- we're confident that banks, thrift and credit union customers will be able to conduct business as usual before and after Jan. 1."
BUSINESS AS USUAL
Edward Kelley, a governor at the Federal Reserve which distributes the U.S. currency and processes checks and electronic payments, expressed similar confidence.
"Not only are we ready, but the major users of our most critical payments services -- depository institutions serving millions of Americans -- are ready too," Kelley said. "I am convinced that we are as ready as for business on Jan. 1, 2000, as we are for business tomorrow."
The so-called "Y2K" problem could prevent some computers from distinguishing 2000 from 1900 because of an old shortcut that recorded the year with two digits only.
While regulatory officials said the banking system was in good shape, they acknowledged that one of the biggest challenges as the new millennium approaches will be convincing the public not to panic.
In their view, a worst-case scenario would be for consumers to try horde cash en masse amid worries over automatic-teller machine failures or account mistakes stemming from Y2K disruptions. That could lead to a number of problems, including a rash of thefts.
Tanoue said all institutions whose deposits are insured by the FDIC have had at least two Y2K compliance exams involving visits by regulatory officials.
Of 10,273 banks and savings institutions, only 27 were found to be "less than satisfactory" in their preparations for Y2K. Those included seven whose efforts were rated "unsatisfactory" and 20 with a rating of "needs improvement."
Tanoue said officials were working closely with those banks that fell short of a satisfactory rating and said the FDIC would impose formal enforcement orders on any that failed to meet targets. She said the names of those institutions would be posted on the agency's website at www.fdic.gov.
PLENTY OF CASH TO BE ON HAND
For its part, the Fed has made arrangements with the U.S. Treasury to ensure that it prints enough cash to meet an expected rise in demand -- even as Kelley and other officials advised consumers against loading up on extra cash.
The U.S. central bank has also created a special lending facility to provide money to any banks that might run into troubles because of Y2K.
In the meantime, Ellen Seidman, director of the Office of Thrift Supervision, offered tips for consumers who may be worried about the century date change. Her advice was:
-- Stay informed by keeping up with current news on the date change and reading all pamphlets distributed by banks about their Y2K efforts.
-- Keep good financial records.
-- Be aware that on the weekend of New Year's Day, just like any holiday weekend, ATMs sometimes run out of cash.
-- Don't go overboard and "bulk up" on cash ahead of time, because that could lead to vulnerability to theft.
-- Stay alert to potential Y2K scams. Don't divulge personal information such as social security numbers to people who call on the telephone asking for such information.
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Snip:
"-- Stay informed by keeping up with current news on the date change and reading all pamphlets distributed by banks about their Y2K efforts."
Doesn't this just make you want to regurgitate !!!!
Ray
-- Ray (ray@totacc.com), September 16, 1999
Just a side note. Have you ever taken a look at your bank statement? How easy could this "document" be duplicated/forged? Is your bank statement legal proof? How many bogus statements are going to surface next year before the banks say, sorry that is not proof.The proof is in the pudding. I have no idea what that means, but in this situation the proof, is cold cash. I like to gamble sometimes, but not with my entire livelyhood.
-- CygnusXI (noburnt@toast.net), September 16, 1999.
"We're in great shape for Y2K" say the banks. What else are they going to say?
-- It Figures (itfigures@obvious.com), September 16, 1999.
"Keep good financial records."According to the FDIC the only thing that qualifies as a "good financial record" is the most current data on your bank's computer system. Good luck.
-- @ (@@@.@), September 16, 1999.
Thanks Ray - Reuters/AP/W. post/LA Times/CNN = NWO Banking mouthpieces.Of more import is the recent announcements of possible worldwide cascading bank failures by the BIS in Switzerland...
-- Andy (2000EOD@prodigy.net), September 16, 1999.
To get back to reality, this is what the BIS in Europe is saying,Y2K really annoys the insiders, the establishment, the Tri Lats-- because it's the only thing they can't control, & it threatens to cripple or destroy all their controls. They firmly control the mega- banks, global money system, mega-media, all major political parties (on both sides in every nation), & the multi-nationals. But Y2K snuck up on them, & they're mad & scared. They're desperately spending billions to try to "fix" it but they know it can't be totally fixed, perhaps not ever. It will also be a major setback for Big Brother, in all its aspects, from tax collection to bank rule to centralized bureaucracy & monitoring. As a result, the average person will get a lot of unexpected benefits from Y2K. Some are hoping for a worst-case scenario. "However painful, it's a worthwhile cost to regain individual freedom" they say, in essence. Freedom has never been free. If U don't really feel Y2K is going to be a BIG DEAL, & if therefore it annoys or upsets U to read data reports from people who say it probably IS going to be a big deal, then don't bother to read this article. Skip on to the next one. Mostly, people aren't changing their minds, are decided re Y2K. If U are a new subscriber, U should read this so U see what we consider the critical/updated facts. Unless U get heavy/daily Y2K updated hard data (as we do) then it would be puzzling how U can decide either way--without all the new daily facts. But most people are deciding emotionally, not objectively, not factually. That's their option, even if subconscious. So, read on or not, as U choose.
For those few who are still reading (:-), here's the latest: Many are comforted to hear that govt & biz have Y2K "contingency plans." Instead, that glib phrase should scare them. Think about it! If all govt depts, banks, biz, military, airports, hospitals who claim they are Y2K- compliant (as most now claim) were really bug-resistant, why would they need vast contingency plans? "Contingency" isn't just a throwaway word; it means something, ie, what we'll do if our individual company/bureau/system breaks down.
They're spending massive money on contingency plans, which means they've little confidence in their claims they're fully Y2K- compliant. Some have thrown in the towel, admit they can't get compliant in time, & will rely mainly on contingency plans. At least they're honest. That can't be said for the blowhard bluffers who are hoping to con people they're foolproof. Fools, yes. Foolproof: unlikely. Only a minority submit to audits of their repair/test/compliance claims.
Many insiders admit they're far behind schedule & will be on a "fix- on-fault" basis in 2000, ie they'll fix/repair embedded chip/computer/system breakdowns if/as they occur. That means after trouble. The catch is: how do they get back up if the whole system is down? Bottom line: the world is one big web of contingency plans & fix-on-fault. Nobody is 100% safe/compliant, because it's impossible to attain. And that is fact, spoken by the world's leading engineering group. US Senate Y2K Report: "Y2K is not going to be just another 'bump in the road.' No, it's going to be one of the most serious & potentially devastating events the US has ever encountered." Govts tend to soft-pedal bad news, so that statement should be a wake-up call to many. Turn up your hearing aid!
The BIS (Bank for Int'l Settlements, Basel, Switzerland) is the central bank for all other central banks. Their Y2K view is not cheerful. In a fat report they say "some problems will be missed; new problems will be inadvertently introduced via the remediation process; even the best test programs may not detect all potential errors; uncertainty will remain up to & after Jan 1. In other words, it is inevitable there will be Y2K disruption, athough it's not possible to predict how serious or widespread this disruption will be."
So there U have it. Central banks will go into 2000 not knowing if these systems are fixed. They know most are not fixed, worldwide. Compare BIS language to your local bank's PR rubbish. The BIS report goes on in great detail. If U read it all U lose any shred of optimism. The general threat is a breakdown of the inter-bank payments system. And once down, how to get it back up? BIS says: Y2K is "unlike any other disruption problem where identical backup sites can be activated. But any uncorrected Y2K problem is likely to affect both sites so the backup would not be a contingency."
It gets worse. BIS, who says what neither private banks nor govt banks dare to say, reveals: "The inability of a major payment & settlement system to function smoothly, or have procedures for isolating problems, will intensify uncertainty/concern. In the extreme case, this could have repercussions throughout the global & domestic systems." Conclusion: the world economy is at acute risk. This is not some "doom/gloom" offbeat writer's view; it's the bluest of the blue chip banks. If your hair hasn't turned grey so far, read the following:
The BIS advises banks to get the home phone numbers of regulators & govt officials so they can be contacted at night or on weekends to discuss the prudence of "closing markets & declaring an emergency financial bank holiday." This is scarier than any Y2K newsletter writer (except Gary North) has dared to say. And it's the real thing! U see, if banks go down, there can be no stock/bond/property mkt, or any other mkt, except black mkts of course, using cash. And all this is separate from equal risks from no power, oil, water, & no phones/fax/e-mail. U don't like this? Does that mean it can't happen? Or can it happen even if U don't like it? Try to separate wish from reality. Author Dr.Edward Yardeni, chief economist/global investmnt strategist at Deutsche Banc-Alex Brown has come back from Y2K retirement & says: "Y2K summary: Most have eyes wide shut....My prediction for a global recession in 2000, at 70% odds remains...Stock mkt down 10-30% (that's 1-3000 DJIA pts). Recession major causes: breakdown in just-in-time manufacturing system, & in global oil industry. Y2K could cause another energy crisis." (I'm virtually sure of it--HS)
EY notes Y2K press coverage is childish, reports the good news press releases, make no comment, ask no questions. "Some frame Y2K as an all-or-nothing story. Either planes fall out of sky or nothing happens. None consider in between. Anyone who talks in between is lumped into the doomsday category & dismissed as far-fetched..Public is led to believe the casual assurances of the few means everyone will be ready. EY says: "Y2K will turn out to be the greatest story never told--- properly." Reporters squeeze answers out of politicians thought to be in hanky-panky, but never ask ONE question about any Y2K report by anyone in banks/govt/biz.
Jacquelyn Williams-Bridgers, US Inspector General,testified in Senate: Half of 161 nations assessed are reported at medium-to high- risk re Y2K failures in telecommunications, energy &/or transport. Her strong conclusion: "The global community is likely to experience varying degrees of Y2K-related failures in every sector, in every region, & at every economic level. The risk of disruption will likely extend to int'l trade, where a breakdown in any part of the global supply chain would have a serious impact on the US & world economies." Now, tell me dear readers, WHY doesn't TV & the press tell U this? My answer: the banks won't let them. Maybe U have a different answer?
As I reported before, the US State Dept will issue Y2K travel advice in Sept. 3 cheers to USSD for integrity in this regard. But it will shock a lot of people. The penny will finally drop. US govt Y2K topdog Koskinen says the US is considering evacuating US citizens from nations with widespread Y2K failures. Each ambassador will make that decision. More than a penny is dropping now. More like a silver dollar. I've only scratched the surface of all there is to report. What bothers me most is the nuclear power plant risks, a global risk, at least in the northern hemisphere. But I can't cover it all. And most people don't even want to hear it.
I'm optimistic that Y2K will paralyze most tax collecting computer systems to such an extent that govts will quickly switch from the income tax to a sales tax (the only fair system), which isn't computer complex & will allow govt to function, ie, bring in money, their 1st concern, 1 of the Holy Trinity of govts (the other 2: power & control).
Here's some more reality.
The problem is worldwide, systemic, interconnected.
"As a net is made up of a series of ties, so everything in this world is connected by a series of ties. If anyone thinks that the mesh of a net is an independent, isolated thing, he is mistaken...."
Buddha
"The conveniences and comforts of humanity in general will be linked up by one mechanism, which will produce comforts and conveniences beyond human imagination. But the smallest mistake will bring the whole mechanism to a certain collapse. In this way the end of the world will be brought about."
Sufi Prophet Pir-o-Murshid Inayat Khan's prophecy (Complete Works, 1922 I, p. 158-9)
-- Andy (2000EOD@prodigy.net), September 16, 1999.