Method to protect bank balances from being lost on 1-1-2000 and restore public confidence in banks. Will it work? comments pleasegreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Many people are scared that money will disappear from their accounts on 1-1-2000 because of computer glitches. One way to ease these fears may be to require all banks to provide statements of account balances as of 12-30-99 and to close on 12-30-99 so that on 12-31-99 the banks could send out the statements of account balances without additional transactions changing the balances. The banks could then run a comparision of account balances on 1-2-99 on 1000 accounts to see if there are any differences with the 12-30 balances. Obviously any differences would be caused by computer glitches. If this test shows problems, expand the test to all accounts. If the problems are severe, close the banks until the problems are fixed. The announcement of such a program would put some people's minds at ease and reduce the panic. Everyone would understand that the 12 31 balance was valid. It may even be possible to write a program to automatically change the 1 2 balance to the amount on 12 31 if the banks were closed to preclude additional transactions from messing up the figures. Some people still would not believe the banks but there would at least be valid data to make the corrections. Of course errors could continue after the rollover if other bugs were not fixed. Would this work?
Will the Jo Ann effect affect checking account balances? If yes, are the banks aware of this and working to fix it? It seems odd that a problem of this type was not recognized by the programmers years ago and not wait until an accountant happened to notice the problem.
-- Tom (TomW@aol.com), January 31, 1999
You do not update the incorrect balances. If the file appears corrupted, you restore from your last good backup, find the error and reprocess. All that is already in place for any major problem correction in any competently run installation. This over simplifies, but you get the idea.
-- curtis schalek (firstname.lastname@example.org), January 31, 1999.
Curtis, what's the simple explanation for how the bank deals with unrecognized corrupt data from multiple sources where the presence of the errors is not recognized for a period of days and where this occurs dozens or hundreds or thousands of times each day and where additional data is calculated from the corrupt data and then retransmitted within the system. Are there many bankers capable of untying the Gordian knot?
-- Puddintame (email@example.com), January 31, 1999.
I recently had two problems with Union Trust (not y2k), and it took several hours on the phone to resolve each of these problems. Union Trust has no viable communications system for resolving such problems, and unless some improvements are made I do no see how they could resolve,say, a few million screwed up balances.
I also think that final 1999 statememts, etc. should by notarized.
-- dave (firstname.lastname@example.org), January 31, 1999.
JoAnne Effect will have NO relevance here. It is a shorthand way of pointing to systems which have problems as they look ahead across the millenial divide. These would be (but not limited to) Fiscal Year decision Support software, look-ahead capacity modelling, any task that looks ahead over the 01/01/2000 divide.
-- Chuck, night driver (email@example.com), January 31, 1999.
The answer to protecting your bank balance is simple. Don't have ONE dime in the bank to worry about. Or the stock market for that matter as well. If all the wise-assed pollyannas are correct there will be no problem at all and you can put it right back in. They have all ASSURED you ther will be no problem. And since that is the case there can be no objection to your taking possession of your own property. After all the bank is ONLY supposed to PROTECT your property.
The problem is that you have to have yours out NOW. One day too late if the pollyannas are wrong, and bank runs begin, you lose it. What are you giving up? A few percent of interest for a few months. So what? The protection of your principle is far more important that a few measly points of interest.
If alll the pollyannas are correct, no problemo at all. If they are wrong, you are a big winner. It is a NO LOSE, WIN-WIN way to go about it.
-- Paul Milne (firstname.lastname@example.org), February 01, 1999.
Tom: I think your solution is overly simplistic. Computer problems are only part of a bank's worries. Depositor confidence and bad foreign loans coming due are probably going to be just as serious.
But even the computer problem itself is multi-faceted. A little research will show you that it won't be easy to correct in days problems that have not been corrected in years. And then there's the interconnectedness, bad data, the utilities, and the suppliers, and so on.
-- a (email@example.com), February 01, 1999.
Lets say, for hypothetical purposes only, there are no bank runs that will cause the banking system to collapse this year, and everyone takes the recommendation about making sure that they have an accurate year end closing statement of their financial assets. Then, comes Jan 1, and everything turns to electronic mush.
Now what? You can't buy groceries with your closing statement. Maybe a friendly local grocer might possibly take an I.O.U. based on it, but he can't really use it to buy anything. Sure, everyone will assume that its a temporary state of affairs, so confidence might be high initially. But, during this period, how will people operate?
On the other hand, as long as people believe that the banking system will come back up, cash will be accepted with no problem! No muss, no fuss, there it is. And the joke, of course, is that the situation may very well not be temporary. Which is when you fall back on the precious metals and barter items that you have accumulated, after cash is no longer worth anything. Ahhh, but that is on other threads....
-- Jack (firstname.lastname@example.org), February 01, 1999.
Tom, we bank with SunTrust, who intends to do just that, only dh was told that SunTrust plans to keep hard copies throughout December and January. I have two concerns with this approach. 1) Where is the bank going to find a secure place to keep the mountain of paperwork this will produce? dh says microfiche or disk in the safe (embedded chips in the locking mechanism ... ). 2) Where is the bank going to find the customer service personnel to handle the hundreds of calls and problems that will undoubtedly take place in just our branch?
Any bankers want to offer comment?
-- jhollander (email@example.com), February 01, 1999.
Thats a great point, Jeannie, which calls for an observation regarding banks: Time was, there was no such thing as a "small" bank, in the sense of the physical size needed for one. All those files, all those clerks, etc. Now, however, thanks to The Computers, they can be inside a supermarket, they are so small. But, when The Computers can no longer work or be trusted, how will there even be the physical space needed for all the paper files that will need to be created, the addional people (after they are all trained on manual bookeeping procedures, of course) that will be hired, etc., etc.?
-- Jack (firstname.lastname@example.org), February 01, 1999.
It is apparent to me that getting your money out of a bank that fails is exactly like "bugging out" of a city that fails. There are only two possible times that you can do either:
Too early or too late. . .
-- Hardliner (email@example.com), February 01, 1999.
Puddintame: I don't dispute your senario or the seriousness of it, I am only saying that if things get that screwed up, then no one can write and debug a program to fix such a mess. Restore and reprocess will be the choice. This could take weeks or even months, FIXIT programs would make it worse.
-- curtis schalek (firstname.lastname@example.org), February 01, 1999.
Curtis, thank you for your reply. What I need to hear a banker say, in layman's term, like you used in your initial response, is how their good compliant data will be immunized from corrupt data overseas. I would never be able to understand the specific nitty gritty details, but if there's a way to do it then there's a way to explain it to us (us . . . as in the people whom they are begging not to panic)as you explained "backup and restore" to Tom. Everyone knows that a bank's individual compliance means little. Greenspan said that the Fed is compliant but that he's concerned about the unknown volume of corrupt transactions that the Fed may be asked to handle. So, all you bankers out there, you know the rest of the world will not be anywhere near compliant, what's your plan? Just let us know the big picture. I won't wait up for the answer.
-- Puddintame (email@example.com), February 01, 1999.