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To: Gurupup who wrote (7223)	12/12/1997 9:59:00 AM
From: Rainforest	Read Replies (1) \| Respond to of 31646

Interesting article from the Keane thread: BASLE, Switzerland (December 11, 1997 11:07 p.m. EST nando.net) - While many people nurse their hangovers on Jan. 1, 2000, the president of the New York Federal Reserve will be in his office to prevent a financial meltdown if the "millennium bug" strikes. William McDonough has already asked his colleagues at the New York Fed to cancel all vacations and avoid any travel during the month, illustrating the depth of his concern over the havoc that computers may cause in the Year 2000. "It is either going to be enormously exciting or very boring in January 2000. These are the two extremes and we hope it will be on the boring side," McDonough told Reuters in an interview. "But we are obviously very concerned," he told Reuters on Wednesday. He was speaking during a break in a conference on payments systems with representatives of more than 80 central banks at the Bank for International Settlements (BIS). The advent of the Year 2000 will generate huge problems because many computers use the last two digits of the year for recording dates. Computers and computer chips may thus believe the year 2000 is 1900, leading to miscalculations, errors and even system crashes. In April the BIS will host a conference dedicated to the problem, bringing together payments and settlements specialists from central banks and financial institutions, systems suppliers and banking and securities supervisors. McDonough, who is chairman of the Group of 10's (G10) Committee on Payment and Settlement Systems (CPSS), said the New York Fed also would host a conference in January as part of efforts to raise awareness of the Millennium challenge. "Frankly, if one has not started to prepare for year 2000 now it won't be too late. But if one starts right now and runs very fast one may make it," he added. Central bankers at the BIS have described the issue as "potentially the biggest challenge ever faced by the financial industry" and called on financial institutions to draw up detailed plans and take action. "What we are seeking to achieve is that everyone be ready as of the end of 1998, and then all of 1999 be available for testing systems," McDonough said. While the "millennium bug" could strike anything that uses computer chips -- such as elevators or air conditioning systems -- its impact on banks could disrupt financial markets. This concern has prompted proposals that markets should remain closed on Monday, January 3, 2000 to give computer specialists a chance to solve any unforeseen troubles. "I don't think declaring a special bank holiday would be a good idea as it would merely increase volume. On the first day of the opening you would have a significant higher volume than you normally would just because of the existence of a holiday," McDonough said. He noted that large financial institutions in major countries are very aware of the problem and pushing for solutions. In the U.S., for example, the Year 2000 issue is now a standard part of any bank examination, McDonough said. "I think what one has to be concerned about is that people are not only aware of the obvious situations, like in bank clearing systems but to what degree computers and computer chips are embedded in elevator operating systems in high rise buildings, in air control systems," McDonough said. By PETER NIELSEN, Reuters