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S.F. Fed head expects few Y2K bank problems

y2k graphic

June 4, 1999
Web posted at: 11:50 a.m. EDT (1550 GMT)

by Nancy Dillon

SAN FRANCISCO (IDG) -- More than 98 percent of the Federal Reserve's mission-critical systems are now classified year-2000 compliant, and the remaining 2 percent should be compliant by the end of June, according to Robert Parry, president of the Federal Reserve Bank of San Francisco.

In his first speech about year 2000, given before about 100 people gathered at the Commonwealth Club of California, Parry said he is "confident" that banking services such as automated teller machines, debit cards, credit cards, direct payments and direct deposits will operate normally on Jan. 1, 2000.

But, he was careful to point out that "probabilities aren't certainties," and that he "wouldn't be surprised if there were some disruptions here and there."

At one point late in the event, Parry even joked that he may stock up on extra dog food in preparation for the rollover to 2000. Parry and his wife have three dogs.

Bonnie Allen, Parry's assistant vice president in charge of domestic banking supervision, was on hand to address the issue of Y2K readiness at member banks and holding companies insured by the Fed. She said that 97 percent are making "satisfactory progress," and that the remaining 3 percent will receive a lot of attention during the next few months.

Allen also said that Fed examiners are going to spend the second half of this year doing follow-up examinations of all of the more than 10,000 banks that the Fed supervises nationally.

During the second and third quarters, some of the most severe cases of Y2K noncompliance could be made a matter of public record, she said.

Parry said his biggest Y2K-related concern related is the possibility of "irrational" behavior on the part of consumers. But he said he was heartened by a poll in March that found only 9 percent of Americans surveyed thought they would have major problems with their finances because of Y2K. That was down from 14 percent last December.

"I don't think it's a good idea to take a lot of cash out of your bank and put it under your mattress," Parry said. "Why? Because the Federal Deposit Insurance Corp. does insure up to $100,000 of your money in the bank -- but it doesn't insure your mattress."

Looking at the Y2K Bug

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May 31, 1999
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May 28, 1999
World Bank: Few developing nations geared for Y2K bug
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