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Technology Stocks : Discuss Year 2000 Issues -- Ignore unavailable to you. Want to Upgrade?

To: Bill Ounce who wrote (472)	11/18/1997 12:31:00 PM
From: Mighty_Mezz	Read Replies (2) \| Respond to of 9818

Great find, Bill! Here's the full URL for the story. search.nando.net

To: Bill Ounce who wrote (472)	11/18/1997 1:26:00 PM
From: STLMD	Respond to of 9818

Bill, here's an expanded version of this in the NYTimes today. Written by Saul Hansell a reporter I have contacted re the Y2k problem, especially embedded chips: Georgia Bankers in Hot Millennium Water By SAUL HANSELL NEW YORK -- In the first of what could become a series of tough actions against banks whose computers are not ready to handle dates beyond 1999, federal and state regulators severely reprimanded a small Georgia banking company Monday for having inadequate computer systems. The Federal Reserve, the Federal Deposit Insurance Corp. and the Georgia Department of Banking and Finance all issued cease-and-desist orders against the company, the Putnam-Greene Financial Corp., which is based in Eatonton, Ga., and has $200 million in assets. Earlier this year, balances were not updated for a full week because of problems with its computers. After an investigation, regulators ordered the company to begin following a wide range of prudent computer practices. In particular, they referred to the company's apparent lack of preparation for problems that are expected in computer programs that have not been modified to process dates after Jan. 1, 2000. In a cease-and-desist order -- one of the harshest reprimands regulators can hand out before levying penalties -- Putnam-Greene was told to end a long list of practices that included operating "with inadequate and unreliable electronic information systems." It was also ordered to upgrade its systems and insure proper backup and disaster recovery policies. Putnam-Greene officials said they had already addressed the most serious problems and were at work on the remaining issues. Because of short cuts taken in the past by software programmers throughout the computer world, many systems still in use can read only the last two digits of the year -- "75," for example, instead of 1975. If not corrected through a painstaking process, the software in such computers will read the "00" in 2000 as the year 1900, resulting in all sorts of miscalculations. This problem could be especially disruptive for the banking industry, which has spent billions of dollars to enable its computers to handle dates in the new millennium. Most major U.S. banks are expected to be prepared to enter the next century, but experts say many foreign banks and smaller ones in this country are so far behind that many risk grinding to a halt. Banking experts said that by using the harsh penalty of a cease-and-desist order, the regulators were sending a message. "If you were on a board of directors of a bank, you would have to be brain dead at this point not to realize the regulators are very much concerned about this issue," said H. Rogdin Cohen, a top banking lawyer with the New York firm of Sullivan & Cromwell. The banking authorities have set a strict schedule for financial institutions to prepare their computers by next year so that all the systems can be tested in 1999. The regulators expect to examine each institution by the middle of next year to see if they are meeting the schedule. Regulators say that as those examinations are complete, sanctions like the cease-and-desist orders will be announced against institutions that are seriously lagging. "We don't anticipate a large number of enforcement actions," said Michael Zamorski, the deputy director of bank supervision at the Federal Deposit Insurance Corp. "But we will not hesitate to use them if other means are unsuccessful in obtaining the required redemption for the year 2000 problems." A recent survey by the Gartner Group, a Stamford, Conn., consulting and research company, found that only 30 percent of small banks in the United States had completed one quarter of the work necessary to have their systems ready for the year 2000. By contrast, 90 percent of big banks have reached the quarter-way mark. At Putnam-Greene, the weeklong computer problem led regulators to conduct a full audit of the banking company's computer system. "Looking back, this was a blessing in disguise," said Joe P. Hudson, the executive vice president of the Farmers and Merchants Bank, the largest of Putnam-Greene's three banks. "They said 'Look, you all need a new computer,' " he said. "And we agreed and got on the ball." He also said the banking company had already bought and installed a new computer system that it says will work with dates past 2000. But the regulators worry that some small banks will rely too heavily on solutions promised by a variety of consultants and software companies offering remedies to the year 2000 problem. "Institutions are putting undue reliance on statements that everything will be OK from the service providers," Zamorski said. While some small banks will spend the money to upgrade their computer systems, others are simply choosing to sell themselves, passing the expense on to bigger acquirers. "A lot of banks, looking at what it is going to cost them to be 2000 compliant -- if they can get there at all -- will say this is a good time to sell," Cohen said. Copyright 1997 The New York Times

To: Bill Ounce who wrote (472)	11/20/1997 10:04:00 AM
From: C.K. Houston	Read Replies (1) \| Respond to of 9818

More about the bank closing BANKS ON THE BRINK? By Tony Keyes Three Federal bank regulators issued a "Cease and Desist Order" against a bank in Georgia for their negligence in adequately preparing for the potential Millennium Bug disaster. The first Y2K enforcement action on record, this "Cease and Desist Order" essentially puts the bank out of business unless they meet stringent and specific requirements. Controlling a meager $200 million in assets, the institution in question, Putnam-Greene Financial Corporation, is relatively small potatoes in the grand scheme of US banking. However, it is representative of some of the 9,000 or so local, community banks, a sector that concerns bank regulators most. In testimony before the Senate Committee on Banking's Y2K subcommittee chaired by Senator Bob Bennett, regulators testified that the nation's largest banks were well on the way to solving the "millennium bug" problem. They did, however, express concern for the smaller institutions and said that their future examination efforts would pay close attention to this group. What does this all mean to you? Several things, perhaps. If you own stock in a local or regional bank, you should write to that bank and get specific information regarding their Year 2000 readiness. You can also write the Federal Reserve Bank and Federal Deposit Insurance Corporation to learn what if any information they have concerning the bank's status. *MUCH MORE - Well worth a read!* y2ktimebomb.com ALL: I would highly suggest you purchase Tony Keyes book ($29.95), "Y2K Investors Survival Guide", if only to read the chapter about how to protect your assets. You really should be thinking about this now! FYI - Because of my concern regarding smaller community banks and savings and loans, I have advised my family to not roll-over CD's in these institutions.

To: Bill Ounce who wrote (472)	11/20/1997 2:16:00 PM
From: Bill Ounce	Respond to of 9818

FED May Bar Transactions with Foreign Banks in 2000 This is huge. Guess what the fallout is to all world markets if this (likely scenario) happens. Found this at Gary North's site (http://www.garynorth.com/y2k/Detail.CFM?Links__ID=768). Alot of hype/exageration may be at his site, but this one item must be taken very seriously. Excerpt from the article: news.com Foreign banks may neglect Y2K By Reuters November 19, 1997, 6:40 a.m. PT MIAMI--The Fed's central bankers fear regional economic issues may distract European and Asian banks from dealing with a "millennium time bomb" threatening the world banking system, a Federal Reserve official said yesterday. "It's number one on my agenda every day," William Ryback, associate director for banking supervision at the Fed, said at a Latin American bankers conference. "We at the Fed are terribly worried." [...] Ryback told reporters that European bankers were working hard on adapting their information equipment for the arrival of a common European currency and had not fully focused on the millennium bug. Asian bankers, he said, were facing economic turmoil and were unlikely to devote much time to a computer problem, regardless of its importance. "We have been told that the Europeans are preoccupied with Ecu conversion," he said. [...] A key task for the Fed, he said, is to insulate the U.S. banking system from "a contagion effect," if non-U.S. banks do not fix their millennium bugs. Ryback said, in response to a question at the annual general meeting of the Federation of Latin American Banks, that the Fed was working up contingency plans in case banks in Latin America countries or others had not fixed their millennium bugs. Ryback gave no details but told reporters later that the Fed might bar transactions between U.S. institutions and banks outside the United States if they had not overhauled their computers. [...]