Equity Market 5-Day Y2K Outages
By Steve Gold, Newsbytes July 12, 1999
Ongoing research from International Monitoring suggests that stock exchanges around
the world could be in for a bumpy ride as the Y2K problem kicks in.
The consulting firm's research suggests that failure in IT systems, together with
telecommunications and utility service outages will conspire to cause effective trading
outages in large markets lasting as long as five days.
Nick Gogerty, a senior consultant with the London-based firm, said that the analysis
took in details of Y2K preparation and infrastructure usage.
The research, he said, indicates that the world's 19 largest equity markets, as measured
by market capitalization, are located in countries which could face telecommunications
and utilities delays of up to five days.
For the research, the countries' technological profile was combined with an economic
profile and a Y2K preparedness estimate based on internal and independent third party research.
The IM-Y2K Rating, the firm says, assumes that Y2K "fix" rates are maintained at
current levels. The ratings have also been updated to reflect changes in national and
private sector "fix" efforts, as they become available. The remaining estimates of
unfinished or improperly finished Y2K fixes are then applied to a damage estimate
scale.
The scale, known as the IM-Y2K rating, ranks countries from zero to nine, with nine
being the worst case. The average IM-Y2K risk rating for the 19 countries was 4.4
IM-Y2K.
International Monitoring says that this 4.4 IM-Y2K score corresponds to a Y2K
damage or delay estimate of 5 days without standard telecoms and/or utilities available.
The damages or costs associated with such a delay, the firm notes, are not known.
According to the firm, it's important to remember that the average IM- Y2K Risk Rating presented in the report is an average figure, and has not been weighed relative to the equity value of the individual markets. This means that the outage scenarios vary significantly from country to country.
International Monitoring's Web site, where segments of the report can be reviewed and purchased, is at intl-monitoring.com .
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Cheryl
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