Merrill to cut off firms with Year 2000 problems
NEW YORK, April 15 (Reuters) - Merrill Lynch and Co Inc. (MER - news) will cut off firms that are not prepared to deal with the Year 2000 computer problem, the securities firm's chief technology officer said Wednesday.
''The testing is this summer. That will tell us who's weak,'' Edward Goldberg, executive vice president of operations, services and technology, said at a New York luncheon.
If the firms -- brokers and vendors -- do not improve, ''we just won't do any business with them,'' Goldberg said.
The securities industry is nearing a first test as part of an extensive $6 billion program to ensure its computer systems will not crash when the year 2000 comes around. Goldberg said Merrill, which has some 600 people working on the problem, will spend $275 million on the project.
The firm is spending an additional $85 million to prepare its systems for European Monetary Union (EMU), which becomes effective in January 1999. The EMU will gradually introduce a Pan-European currency, the euro.
''If you want to be able to continue to participate in the European markets, you have to have the right systems,'' Goldberg said. ''The EMU project is not an option,'' but a necessity, he added.
Goldberg said European banks and securities houses are well prepared to tackle the EMU project, but said the firms are lagging in their Year 2000 efforts.
''I worry about the Year 2000 more outside the U.S. because of the resource issue. They've gotten a late start,'' Goldberg said. He added that it was now tough to hire professionals able to deal with the problem because they are in hot demand.
The problem is one of the Securities Industry Association's top priorities this year, President Mark Lackritz told reporters earlier on Wednesday.
''The biggest challenge we have is preparing for the Year 2000,'' Lackritz said. ''We are incredibly dependent on technology and systems.''
In July, some 15 securities firms will test the program designed for industry-wide testing in the latter part of the year and in 1999. |
