RELATED VIDEO CNN's Kate Snow reports on measures you can take to protect your finances regarding Y2K Real 28K 80K Windows Media 28K 80K

March 23, 1999
Web posted at: 9:29 a.m. EST (1429 GMT)

From Correspondent Kate Snow

(CNN) -- The U.S. government and most American companies are scurrying to make their computers Y2K compliant. But that may not be enough because other countries are so far behind that it could cause economic problems for the whole world.

"Their systems could be so disrupted that they can't go on with business," says Edward Yardeni, chief economist for Deutsche Bank Securities. "They can't export, they can't import. It's hard to place a phone call into Brazil. It's hard to get the parts from Taiwan. All that could add up to a global recession that could still impact our economy."

Yardeni was named the top U.S. economic forecaster by the Wall Street Journal in 1997. Though most economists disagree, this self-described alarmist is predicting a recession that could begin sometime this year and last anywhere from six months to a year.

"I'm not telling people to get out of stocks entirely, it's not my style. I'm telling them to get more defensive. I like government bonds a great deal," he says.

The securities industry is trying to keep investors confident. About 400 brokerage firms, exchanges and other financial institutions are testing their computers for Y2K problems by simulating trading in the new year. Any firm that is not compliant by mid-October could risk being shut down by the Securities and Exchange Commission.

But what about your own personal bank account?

Most banks insured by The Federal Deposit Insurance Corp. are expected to have their systems ready but the latest estimates show three percent are lagging behind.

Here are a few points the American Bankers Association says consumers should consider.