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To: Bill Ounce who wrote (2939)	11/7/1997 11:45:00 AM
From: long-gone	Read Replies (1) \| Respond to of 116825

RE: 90% in stocks. Bill, And what of those playing the S&P,DIJA, NASDAQ 100 futures,& the margin to the last cent they might borrow? Are they not in far greater than 90%? How long can this go on? richard Have you written your congressman yet? Don't let me only one voice in the darkness. rh

To: Bill Ounce who wrote (2939)	11/17/1997 9:00:00 PM
From: Bill Ounce	Read Replies (1) \| Respond to of 116825

FED Year 2000 (Kelly) Statement house.gov Note: CDC means Century Date Conversion [...] We are, of course, developing specific CDC contingency plans to address various operational scenarios, and our contingency planning includes preparation to address unanticipated problems when we bring our systems into production as Year 2000 begins. Key technical staff will be ready to respond quickly to problems with our computer and network systems. We are establishing procedures with our primary vendors to ensure direct communication and appropriate recourse should their products fail at Federal Reserve installations during Year 2000 date processing. Our existing business resumption plans will be updated to address date-related difficulties that may face the financial industry. [...] We recognize that despite their best efforts, some depository institutions may experience operating difficulties, either as a result of their own computer problems or those of their customers, counterparties, or others. These problems could be manifested in a number of ways and would not necessarily involve funding shortfalls. Nevertheless, the Federal Reserve is always prepared to provide information to depository institutions on the balances in their accounts with us throughout the day, so that they can identify shortfalls and seek funding in the market. The Federal Reserve will be prepared to lend in appropriate circumstances and with adequate collateral to depository institutions when market sources of funding are not reasonably available. The terms and conditions of such lending may depend upon the circumstances giving rise to the liquidity shortfall. Our preparations for possible liquidity difficulties also extend to the foreign bank branches and agencies in the U.S.that may be adversely affected directly by their own computer systems or through difficulties caused by the linkage and dependence on their parent bank. Such circumstances would necessitate coordination with the home country supervisor. Moreover, consistent with current policy, foreign central banks will be expected to provide liquidity support to any of their banking organizations that experience a funding shortfall.

To: Bill Ounce who wrote (2939)	11/17/1997 9:27:00 PM
From: Bill Ounce	Respond to of 116825

Comptroller Year 2000 (Ludwig) Statement house.gov excerpt: [...] If undetected or uncorrected year 2000 problems cause a banks systems to fail, the bank could breach many legal obligations arising from its fiduciary and contractual relationships with customers. [...] The multiple linkages banks have with other counterparties -- other financial institutions, governments, borrowers, and depositors -- require that financial institutions allow sufficient time to assess the effects of their year 2000 solutions on data transfers and exchanges. It is not enough for insured depository institutions just to make their systems year 2000 compliant. Should their counterparties fail to address the year 2000 problem, or adopt a method which produces data that are unrecognizable by the financial institution, electronic fund transfers might fail or financial institution systems might be contaminated with corrupt data. [...] The number of linkages that need to be tested can grow geometrically due to the interrelationships among payment systems at the local, national and international levels. [...] Insured depository institutions must ascertain how well their counterparties, who also rely on computer systems, are addressing the year 2000 problem. Counterparties that do not address these problems may experience operational or financial problems that may make it difficult for them to conduct business. If loan customers or bond issuers cannot repay their debt as agreed, the financial institution faces increased credit risks. If derivative counterparties cannot settle maturing transactions, the financial institution potentially faces not only increased transactional risk, but also increased credit risk, depending on the net position of the contract. If fund providers cannot deposit or maintain funding agreements, the financial institution faces potentially increased liquidity risk. The FFIECs May Interagency Statement outlined the due diligence process that banks should undertake in assessing the year 2000's potential impact on their credit exposure. We are developing guidance that extends the due diligence process to all the key counterparties of a financial institution. [...] Our finding was that some national banks and some vendors need to speed up their efforts in order to complete their year 2000 preparations in a timely manner. In order to alert institutions to the importance that both regulators and the Congress place on these preparations, and particularly the importance of setting and meeting deadlines, I recently sent a letter to all Chief Executive Officers of national banks and bank vendor companies expressing my concerns about those who are not doing enough. Enforcement. Institutions must recognize that making adequate preparations for the year 2000 is more than a regulatory requirement -- it is a business imperative. As part of our efforts to help make sure national banks are prepared for the date change, the OCC must consider how it will use its supervisory and enforcement authority if a bank fails to prepare adequately. Our response will, by necessity, depend on many factors. When we find that an institution is slipping behind schedule and is likely to fail to meet one or more of the key benchmark dates, we must identify the reason for that failure and assess the efficacy of enforcement action. We will not be hesitant to take action, but we must all recognize that doing so will not assure year 2000 compliance for institutions that are trying, but still failing, to solve their year 2000 problems. Thus, we are working with our fellow financial institution regulators to identify as early as possible which institutions are in serious trouble and to develop contingency plans to deal with them. [...] Your letter of invitation asks about the year 2000 preparedness of the international community. The Federal Reserve Board, the Federal Deposit Insurance Corporation, and the OCC have been closely involved in efforts to focus the international supervisory community on the issue, recognizing this is a problem of global dimensions. In particular, both the Federal Reserve and I asked that this matter be put on the agenda for the Basle Committee on Banking Supervision. I personally participated in that discussion. The Committee has just issued a paper on the year 2000 that outlines the steps that financial institutions need to take to resolve the problem, and identifies the role of bank supervisors in helping to ensure success. The Basle Committee has sent copies of this paper -- which covers much of the same ground as the FFIEC's statement -- to banking supervisors in more than 150 countries. A task force under the Committee is now surveying the adequacy of year 2000 efforts, both in G-10 and non-G-10 countries.