Big banks ready for Y2K glitch

Customers guaranteed money will be safe

By CP TORONTO -- Anyone having Y2K nightmares should listen to the hearty laugh of Gail Vaz-Oxlade, financial adviser and author.

"I think a lot of ado has been made about this and maybe a lot of ado about not too much," she says.

But seriously, Vaz-Oxlade has been tracking the Canadian financial industry's preparations for the millennium bug and is impressed with its efforts to prevent any computer malfunctions.

Her advice: "Take out an extra $200 from the bank machine in case there's a bugaboo, and don't sweat it."

With the big Canadian banks spending $1 billion to minimize the chances that their date-sensitive industry is humbled by the Y2K bug, Royal Bank spokesman David Moorcroft says the sector is ready for the new century.

"I think Canada is going to come out of this looking very good."

The Royal has spent most of the $170 million it budgeted to check and fix its 50,000 personal computers and 2,400 computer servers with embedded chips.

Most of the bank's operations -- including teller machines, mortgage and lending department, including Visa -- are already compliant and 100% are expected to be ready by June 30.

The Royal has boldly guaranteed customers their money and records will be safe and that they will have access to their money.

Moorcroft says Canada's preparations are getting international recognition. "In the last quarter alone, Royal Bank has had three central banks in three countries come to us and give us extra deposits that they were keeping in countries which aren't prepared."

On the investment scene, U.S. author Tony Keyes and Deutsche Bank economist Ed Yardeni have been warning of a Y2K-induced recession and recommending a flight from stock markets into government bonds and cash.

Peter Volpe of Integra Capital Management Corp. in Toronto says many clients are underweighting stock holdings by about 10%. Money-market funds, treasury bills and government bonds are among the temporary parking vehicles.

But Y2K fears are just one factor in the assessment of a client's risk tolerance. Worries about the stock market also result from low corporate earnings, the lagging Asian economies and deflation.

-- Norm (nwo@hotmail.com), April 06, 1999

Answers

Imagine that you've heard next to nothing about Y2k, & then you read this article in a newspaper you trust. What are you going to think...? Isn't the natural reaction to shrug, decide it's no big deal, & put it out of your head altogether?

It's no wonder that's what most folks are doing.

-- no (big@problem.here), April 06, 1999.

Yes, be a good sheeple and "Take out an extra $200 from the bank machine in case there's a bugaboo, and don't sweat it."

Never mind the fact that the work is not being done.

Never mind the fact that cost estimates have doubled and are increasing every month.

Never mind the fact that the January 1999 Interbank test were postponed indefinitely.

Never mind the fact that the corrupted data problem has no solution. Nevermind the fact the the rest of the world's banking system is in dismal state.

Nevermind the fact that 50% of people in the the US think banks will experience failure.

Nevermind the fact that 20% are planning on taking their money out. Nevermind the fact that the God of Greenbacks Greenspan claims "99% remediation is not good enough".

Nevermind the fact that mergers and aquisitions are interfering with the y2k tasks.

Nevermind the fact that windowing and date expansion are incompatible.

Nevermind the fact that banking is dependent on telecommunications which is dependent on power which is dependent on transportation which is dependent on oil which is dependent on...

Should I continue?

-- a (a@a.a), April 06, 1999.

AHHA!! Another Poly meme: Lotso' Dollars spent = complete

I have spent lots o' dollars on my car. Is it completely repaired?

NO!

Chuck

-- Chuck, a night driver (reinzoo@en.com), April 06, 1999.

This news blurb is an example of the tunnel vision which responsible persons in various industries wear when viewing their Y2K situation. It's a picture of "We have all our ducks in a row.", notwithstanding that bearing down on that row of ducks, at high speed is a runaway truck labled "Factors Outside Our Control".

What this spokesperson did not mention is what happens if factors outside the control of the banks fail to meet Y2K's challenge. A bank without the support of community infrastructure and services will not be able to perform any business activities. Banks require power, phones, water, sewer service, fire protection, police protection and more.

This spokesperson may see the banks' ducks all lined up for rollover. I see flying feathers and squashed quackers come New Year's.

WW

-- Wildweasel (vtmldm@epix.net), April 06, 1999.

True enough. Another case of, We're OK but we don't know about you. Also known as I'm OK, you're toast.

A global picture is hard to grasp. Let's hope we see some real intersystem testing before rollover. We'll sure see it after rollover, at least for a little while. I hope the dominoes are further apart than they look right now.

-- Flint (flintc@mindspring.com), April 06, 1999.

"I think a lot of ado has been made about this and maybe a lot of ado about not too much," she says.

Just one billion dollars.

"In the last quarter alone, Royal Bank has had three central banks in three countries come to us and give us extra deposits that they were keeping in countries which aren't prepared."

Now this is a confidence builder....

-- Mike Lang (webflier@erols.com), April 06, 1999.