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

To: Richard Babusek who wrote (1052)	2/10/1998 9:21:00 AM
From: sibe	Read Replies (1) \| Respond to of 9818

FDIC may be setting bad example on year 2000, congressman says Copyright c 1998 Nando.net Copyright c 1998 The Associated Press WASHINGTON (February 9, 1998 8:47 p.m. EST nando.net) -- When it comes to fixing year 2000 computer problems, the FDIC may be setting a bad example for the banks it oversees, the chairman of the House Banking Committee said. Rep. Jim Leach said Monday congressional auditors found the Federal Deposit Insurance Corp. has not yet completed the assessment of its computer systems that are critical to getting ready for the year 2000. According to the FDIC's own standards for insured financial institutions, Leach noted, such work was supposed to be finished by the end of last September. "It now appears that the FDIC may not itself have met the standards it has set for financial institutions," Leach said in a letter to FDIC Chairman Andrew Hove. Leach, R-Iowa, asked the FDIC when it expects to complete the assessment. He said the congressional auditors at the General Accounting Office, supported by the banking committee, expect the agency to finish all needed computer renovations by Aug. 31. Asked about the letter, FDIC spokesman Phil Battey said the agency had made significant progress. Referring to critical computer systems, he said, "We have 40 mission-critical systems. We've assessed 34 of them. We have six to go." The evaluation of those six will be finished by the end of March, Battey added. Sen. Robert Bennett, R-Utah, chairman of the Senate Banking subcommittee on financial services and technology, has scheduled a hearing Tuesday on the auditors' findings regarding the FDIC's readiness. An earlier GAO review of another financial regulatory agency, the National Credit Union Administration, found that its year 2000 progress was unsatisfactory and that some credit unions it regulates could fail as a result if corrections aren't made in time. The financial industry is especially vulnerable to year 2000 glitches, and some experts are concerned that consumers could lose faith in the security of their banks, other financial institutions and the stock markets. "The FDIC's ability to address the year 2000 problem in a timely manner is critical not only to assure public confidence in the nation's financial system, but to ensure that U.S. financial institutions remain viable domestically and competitive internationally as we enter the next century," Leach wrote Hove. On Thursday, the banking committee voted to give federal regulators of thrifts and credit unions new authority to monitor the companies that sell services to those institutions to make them ready for the year 2000. Supporters of the bill said it would put the S&L and credit-union regulators on an equal footing with the FDIC and other bank regulatory agencies such as the Federal Reserve and the Comptroller of the Currency. When the forerunners of today's massive computer programs were first designed, storage space was at a premium. To save memory space on the old-fashioned mainframes, code writers simply omitted the first two numbers of a date. That means 1998, for example, would read as 98, 1999 as 99, and so on. The year 2000 would be read as 00. Since the systems are coded to assume that all years begin with 19, computers will interpret 00 to mean 1900, if changes are not made. By MARCY GORDON, AP Business Writer