Y2K Poses No Threat To Top UK Finance Firms

Updated 7:15 PM ET October 11, 1999

LONDON (Reuters) - Britain's financial sector has made significant progress toward tackling the millennium computer date problem, with no major firms now posing any threat, watchdog Financial Services Authority (FSA) said Monday.

"There is now a high level of confidence that it will be 'business as usual' in the UK financial sector," said Michael Foot, managing director and head of financial supervision at the FSA.

Most of the "high-impact" and "medium-impact" groups with a large number of customers were rated "Green" or "Blue," meaning they have completed or are on track to complete millennium compliance programs. There were only seven "Ambers," which are behind schedule but expected to catch up.

The last FSA progress report in July had two medium-impact firms on "Red" -- still posing severe risk of material disruption -- and 28 percent of high and medium impact groups on Amber.

In March, there were 12 Red high-impact groups, which include retail and investment banks, insurance companies and building societies.

Despite the progress, Foot said there was no let-up in the close monitoring of financial sector firms.

"If necessary, we will take the action we judge is required to protect the interests of stakeholders -- depositors, policy-holders and investors," he said in a statement.

There are about 150 firms in the FSA's high-impact category and about 250 in the medium-impact group, out of a total of 8,000 financial services companies it regulates. It uses traffic lights to assess the sector's millennium readiness.

The FSA said it will next give an update at the Action 2000 National Infrastructure Forum on October 21 when it will adopt the same traffic-light rating system as Action 2000, the government-backed body created to encourage Y2K compliance.

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Ray

-- Ray (ray@totacc.com), October 11, 1999