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To: rupert1 who wrote (55280)	3/31/1999 1:25:00 AM
From: rupert1	Respond to of 97611

Evidence which contradicts the Paine Webber survey posted by Aitch, in which it was claimed that YK2 compliance was mainly done, continues to mount. On European TV last evening there was a discussion of numerous recent studies which showed as few as 30% of private and public sector organisations had complied in a very large number of countries. Today the WSJ has the following article about US Banks which have just reported that there is even more work than they thought. __________________ March 31, 1999 Banks Increase Spending Estimates On Year-2000 Fixes to $3.6 Billion By RICK BROOKS Staff Reporter of THE WALL STREET JOURNAL The cost of upgrading computers at the nation's banks to overcome the year-2000 bug continues to climb as banks move closer to completing the job. In annual reports filed with the Securities and Exchange Commission in recent days, some banks have disclosed that it will cost millions of dollars more to fix the problem than they estimated just three months earlier. The spending increases aren't as large as previous jumps and aren't expected to have a big effect on earnings. But they are another sign that many banks underestimated the problem. The latest spending increases are being reported across the country by both big and small banks. Wells Fargo & Co., the seventh-largest U.S. bank in terms of assets, said it expects to spend about $315 million, up 5% from the previous estimate. Bankers Trust Corp. estimated its total bill at $240 million to $280 million, up from its previous estimate of $220 million to $260 million. Overall, the nation's 15 biggest banks now foresee a total combined bill of $3.6 billion, a 4% increase from $3.46 billion as of Sept. 30. Although the latest jump is less than half the 10% increase in combined estimated spending from last year's second quarter to the third quarter, some analysts think costs could surge again as the deadline approaches. "People are still discovering there is additional money to be spent," said Jim Duggan, research director for year-2000 services at Gartner Group, a consulting firm in Stamford, Conn. One reason costs are still growing is that some banks are uncovering problems that hadn't been identified earlier, he said. For instance, CCB Financial Corp., Durham, N.C., said it is preparing a crisis plan in case its business is disrupted by year-2000 breakdowns. Some banks also might be shifting certain routine technology expenses planned for this year and next year into their year-2000 budgets, Mr. Duggan said. Banks have a particularly pressing need to fix the year-2000 bug; they depend on computers for more vital functions than many other businesses do. If the computers aren't reprogrammed or replaced so they can recognize the new century, banks might find themselves unable to perform such essential tasks as processing checks, providing account balances or opening their vaults. In addition to fixing their own operations, banks have to make sure their most important customers also are addressing the problem. For instance, BankBoston Corp., which now expects to spend $75 million instead of its previous estimate of $50 million to $75 million, recently surveyed borrowers to assess the potential credit risk of those who aren't prepared. "There has been no sort of due diligence that turned up a problem we hadn't found before," a BankBoston spokesman said. Many banks say they are finishing the replacement or modification of outdated equipment, leaving more time for testing later in the year. Chase Manhattan Corp., the third-largest U.S. bank, said it already has fixed all the heavy-duty equipment such as computer servers and data-center machinery that is susceptible to the year-2000 bug. Huge computer-upgrading expenses are already built into bank budgets, so the recent increases aren't expected to damage earnings. Still, some analysts said even a slight rise in spending diverts cash from other areas at a time when the industry already faces a profit slowdown. "There is a delaying of other technology projects that are needed to keep productivity momentum going," said Michael L. Mayo, a banking analyst at Credit Suisse First Boston Corp.