FedWire admits they have "no alternative"

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Hope it really does work. No alternative?

-- Leska (allaha@earthlink.net), November 10, 1998


Y2K Won't Short-Circuit FedWire by Brian Alcorn 2:15 p.m. 10.Nov.98.PST Initial tests show that the central nervous system of the American banking industry, known as FedWire, will survive the Year 2000 problem, government and banking officials said Tuesday.

Tests of FedWire, the Federal Reserve Bank's electronic funds and securities transfer service, began in June. Some 11,600 depository institutions, including banks, thrifts, credit unions and the US Treasury, transfer more than US$300 trillion a year through the network.

Transfers made over FedWire include proceeds from the purchase or sale of government securities, deposits, and other large, time-sensitive payments. The Treasury and other federal agencies use FedWire extensively to collect and disburse money. So, should the FedWire fail, the US government would lose one of the chief mechanisms for controlling the flow of money through the economy.

"We have had no Y2K problems with FedWire" on the government side, said Carl Gambs, senior vice president at the Federal Reserve Bank of Kansas City, Missouri. Since banks also tap into the system, the Federal Reserve has no way of knowing if testing is successful on their end, but no serious trouble has been reported, he said.

"In general, these systems are in good shape," he said.

The financial community, and the Fed in particular, are far ahead of most businesses in dealing with the millennium bug, said Harrison Fox, a senior staff member for the congressional subcommittee on Y2K.

Since 1 July, more than 3,000 banks have conducted 9,000 tests with the Federal Reserve on mission-critical systems, including FedWire. The government is requiring all FedWire users to conduct Year 2000 testing by no later than 30 June 1999.

According to Gambs, one reason FedWire will be ready for the millennium is a fortuitous piece of timing. In the late 1980s, the Federal Reserve consolidated 12 mainframe processing sites around the country down to three to cut costs. In the process, the applications for systems like FedWire were completely rewritten.

"We did the bulk of the work that was needed [to fix Y2K problems] at that point," Gambs said. "Also, because of that experience we knew the applications really well, and most of the key people who wrote that code still work for us."

Bankers got a small preview of what might happen if FedWire went down for the count in August 1990. A power failure cut off service to New York's financial district, including all of the Fed's computer systems. FedWire was not down for long, but it took a week before it could operate at full capacity. By then, as much as $150 billion was already in the wrong accounts.

"Frankly, if FedWire went down, there is no alternative available," said Gambs. "Trillions of dollars move through this system, and if we had not been able to make it compliant, banks domestically would have no way of transferring those sums.

"There are all kinds of redundancies built into the system to protect it, but outside this network there

-- Leska (allaha@earthlink.net), November 10, 1998.

Occasionally, i amuse myself listening to conspiracy theories-currently, favorite is the NWO that is being exhumed secondary to Y2K. However, i never could, in my own mind, resolve how a situation-created or inadvertant-that would hit everyone equally, more or less, would benefit the creation of such a thing. Now, we find out that the Federal Reserve is just fine, and has been since the 80's-coincedentally, of course. If i were a conspiracy theorist-which, thank god i'm not:)- i would find that just a little funny. ('course, assuming that they are tellling the truth, and would never, ever lie to the american public!!) ------------------------------------------------------

-- Damian Solorzano (oggy1@webtv.net), November 11, 1998.

Key Word And Tricky Phrase Alert: (KWATPA - (pronounced "key - what - a - paw" for you acronym buffs)

It wasn't that they didn't have Y2K problems that would have brought done the banking system (aka North style) down to dead still, but rather that they found them and fixed many years ago. They never claimed that there were problem, just that the re-programming has already been done (at the Federal network side, your local banking conditions may vary..)

Again, the same rule applies as always - no agency (after investigating and fixing their Y2K problems, has found that they wasted their money on a problem that didn't exist.

And the corollary to this rule is again proven true: Every agency and company that has tried to solve their Y2K problems has found enough of them to have caused the business or agency to fail in some critical area.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), November 11, 1998.

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