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

To: Hawkmoon who wrote (4875)	3/20/1999 3:24:00 PM
From: R. Bond	Read Replies (1) \| Respond to of 9818

The Times March 20 1999 BUSINESS LIFE The year 2000 looms and all is not well, says Caroline Merrell Headaches start as the bug bears down on banks Will the dawning of the year 2000 bring financial chaos? This week the man who should know raised just that spectre. Banking industry regulators do not go in for scare-mongering. But with a few carefully chosen words, Michael Foot has sent shock waves reverberating round the City and sent savers scurrying for safety. The quiet, bespectacled man from the Financial Services Authority admitted that 12 large financial institutions are so far behind with their preparations to cope with the millennium bug that they could pose a serious risk to their customers and the markets. He is so worried by their potential to do damage that he is threatening to close them down. This grim warning is the first real admission from the City of the potential horrors that lie in store when the year changes. Until now, the Bank of England has insisted that Britain's financial institutions were coping with the bug. That is what the institutions themselves maintained. Now it is clear that the truth is very different. And so intertwined are the various financial institutions that if one fails, the entire system may be put at risk. "The financial industry is like a house of cards," shuddered one insider yesterday. "If one business founders, the others feel it." Suddenly, those individuals who have insisted that they will be withdrawing all their cash from the bank before the end of the year do not seem quite so misguided. The prospect of the millennium bug eating your savings may be more than just the nightmare of overactive imaginations. At a high-powered millennium meeting in Washington recently, delegates were stunned to hear Henry Kissinger announce that he intended to withdraw all his money from the bank as 2000 nears. Mr Foot's statement this week has fuelled fears that lesser mortals will follow the former United States Secretary of State's lead, precipitating a dangerous run on the banks. There are fears that computer breakdown will wipe out details of people's investments, transfer sums to the wrong accounts and generally put the finances of individuals and corporations in jeopardy. The FSA is insistent that companies must have full back-up systems in case of a massive computer breakdown and it is by no means confident that all yet do. It was inevitable that a few small businesses would fail to prepare adequately for the arrival of the new millennium. But Mr Foot was not talking about small businesses. What was so stunning about his revelations was that they related to 12 of the most important 160 businesses in the financial services sector. These, on the regulator's own definition, are "high-impact" companies, banks and insurers whose failure to be bug-proof would have serious consequences not just for customers but for the entire financial markets. Yet we are left to guess the identity of the dirty dozen. Mr Foot dare not name and shame them for fear of legal action. His secrecy led to frantic speculation in the City as bankers tried to identify the culprits. There were equally frantic efforts to insist that they were not the guilty ones. The favourite line from many British banks was that all the 12 offenders are foreign-owned. That, says the Financial Services Authority, is certainly not the case. At Action 2000, the Government's anti-bug unit, the director-general, Gwynneth Flower, is trying to play down fears of financial disaster. The former army major proclaimed: "If I have confidence in any sector in Britain it is the banking sector. But it would be foolish to say that everything in the garden is rosy." She believes that the financial services industry has spent more time and effort dealing with the bug than any other industry and that Britain is ahead of any other country in seeking to cope with the problem. Robin Guenier, the man whom the last Government first asked to help the country to cope with the bug, is less sanguine than Ms Flower. He was widely derided as the Cassandra of the millennium because of the dreadful picture he painted of national chaos. Now his predictions are coming dangerously close to being borne out. He says: "If the financial services industry is leading Britain, then that does not say much for the rest. And if Britain is leading the world, then heaven help us." The international nature of the financial services industry does exaggerate the risks it faces for much of the rest of the world certainly has lagged behind the UK in year 2000 preparations. Abbey National, for instance, confident that its own systems are compliant, has a small operation in France which was recently checked for compliance under the French Government's criteria. It was, said the Abbey, "one of the few businesses to meet the deadline". There is widespread scepticism in the City about the ability of many European institutions to address the problem adequately. The potential computer problems have been compounded for the financial services industry by the introduction of the euro. Many were deflected from the year 2000 issue as they struggled to prepare for the new currency. Now that they need to finish preparing for the end of the millennium, they cannot find the people to do the job. Mike Hudgell, marketing director of Gresham Computing, which specialises in testing IT systems, says: "A lot of firms have left it too late to do their year 2000 work. They know what needs to be done but simply do not have enough time to do it and test that it will work. Almost every major IT project ends up being delivered late. This is the one that cannot be." Robin Guenier believes that the first casualties could begin to appear very soon. As many financial companies operate an accounting year that runs from April to March, their software will soon be covering the period to March 31, 2000, triggering the bug's early appearance. Mr Guenier does not sound like a scaremonger to Nick Bottomley, of the Swiss banking software group Fin'Objects. "I have never heard of a firm that has admitted it has a year 2000 problem yet everyone in the City has it and, up till now, they have been hiding it," he says. He argues that companies have tried to take shortcuts and the results could be disastrous. Commerzbank, one of Fin'Objects's clients, was forced to ditch virtually all its computers and start again with a new system to cope with the euro and year 2000. Mr Bottomley fears that the 12 companies that feature on Mr Foot's list are only the most visible offenders. "The others, who have been hiding their problems, will be found out later," he says. That is why he will be removing all the cash from his bank accounts before the century ends. The Cost so far Barclays .................£250 million NatWest ..................£170 million Abbey National ...........£134 million Nationwide ...............£90 million Halifax ..................£80 million Standard Life ............£80 million Bank of Scotland .........£55 million HSBC Midland .............£43 million Alliance & Leicester .....£40 million Legal & General ..........£39 million Royal Bank of Scotland ...£29 million Bradford & Bingley .......£7 million Northern Rock ............£5 million Next page: Midnight and it's as bad as it gets Copyright 1999 Times Newspapers Ltd. This service is provided on Times Newspapers' standard terms and conditions. To inquire about a licence to reproduce material from The Times, visit the Syndication website.

To: Hawkmoon who wrote (4875)	3/20/1999 7:40:00 PM
From: C.K. Houston	Read Replies (1) \| Respond to of 9818

<Quit the fear-mongering Ken and think about the steps you would implement to get this country through the uncertainty in as orderly a condition as possible.> Any suggestions?? I'm serious. I'm not baiting you. I just find this 72-hr spin govt is putting forth reprehensible. And I'm dmn angry about this "fill up your gas tank at least half-full", or "a little over half-full" bit ... prepare for Y2K like you would for a winter storm. Yet you go to FEMA and Red Cross winter storm site (non Y2K) - and they tell you to fill up so your lines don't freeze. Yeah - little guys are gonna be last in line ... for everything. I'm not panicked. I'm not a fear monger. I'm not chicken-little. I just feel people need to make reasonable* precautions, and current spin by govt is giving false hopes and reassurance. I don't think recommending only 72 hrs is reasonable. I think it's reprehensible. Cheryl P.S. Doing fine. Really enjoy my new life. Fireplace complete. Adjacent built-in bookshelves should be done by Tuesday, in time for a potluck dinner-party for 12. We have a mix of gourmands ... and those who over-cook vegetables:-) Oregon has some pretty good vineyards. My social life has even picked up:-) Dates with various CA & TX "refuges" - a dentist, baritone soloist from SF Opera, and owner of various businesses in Orange county. OOPS - forgot the ex-Detroit cop who puts those fancy trail-rides together for the "rich & famous". My circle of friends is ever-expanding with a very mixed and ecclectic group of people. All down-to-earth, warm, helpful and full of laughter. Been to 3 concerts in past 2 weeks (including one at someone's home for 80 people), a mardi-gras party and St. Patrick's day party. For me - something good came out of all of this dismal Y2K stuff. Fear of the unknown immobolizes people. Once you take action, and control of your life ... things are OK. At least for me, that's been the case.