Two Issues That Nobody Can Explain: 1. How will banks handle corrupt data from foreign institutions?; 2. How will fuel get to power plants? : LUSENET : TimeBomb 2000 (Y2000) : One Thread

The pollys are good, very good. And I'm not talking about the multi-personality shill on this forum who's devoted his life to the "issue that doesn't exist", but the real pros; The top level PR people and also some of the polly posters here such as Dan the utility man. Just so the pollys don't get all carried away and think that they've persuaded anyone with their glib assurances, I'll let them know that they have not been persuasive on the big issues. I invite them to refine their arguments.

I'll buy your argument that the power companies are technically ready. And I'll buy your argument that banks and major securities firms in the US are technically ready. But until you can answer the two questions in the thread title authoritatively, then I say you're just doing a y2k tap dance and drawing unfounded conclusions when you tell people not to prepare. I'll give you this, you do know diddly.

-- Puddintame (, April 12, 1999


There is an issue that I -- and I am no expert -- do not yet understand. Perhaps someone in plain english can explain this to me. Thanks.

"Early" on (1998), reading Cowles and others, I noticed mention that an overdraw on power (more demand than they had power to feed) could cause its own problems, including transformer overload/blowout, etc. which in turn could take power down in small areas until replaced. But, that even if it caused no problems at all, this would still end up being a source of brown outs or temporary or rolling blackouts for a given area, while they tried to juggle the supply vs. the demand.

I read various statistics indicating that a huge source of generated power is from coal that is railroaded to power plants daily. But for the sake of argument let's just say that those coal places and the railroads all work perfectly, and that there is plenty of power between the coal and the target city for the various needed elements to work for that. So let's just pretend that coal is not even a worry right now in this scenario.... {major suspension of disbelief here}

I have noted a tremendous number of electric companies actually buy some or all of their power from larger ones. So even assuming every electric company is wonderfully compliant for distribution, we are still dependent on a much smaller number of them for the initial power to distribute.

It is my understanding that up to 45% of power utilized in many places comes from nuclear plants. My reading indicates that there are likely going to be some number of plants offline come Y2K for safety reasons.

To me this indicates that even if every single electrical company's distribution worked perfectly, and every single train needed for coal worked perfectly, there would *still* be a potentially serious issue with lack of available power to meet demand. While this is certainly not as tragic as lack of power altogether, that would generally translate into a lack of power altogether for some small region, or temporarily for a number of them, would it not?

If it is no secret that so much power is nuke-based, and if many nuke plants are expected to be closed for safety prior to Y2K, then how could anybody say that power won't be a problem? It looks to me like even if the impossibly perfect scenario were in place in half a dozen other areas, we would still be faced with not enough power for the people.

Would appreciate any input correcting or explaining this.

PJ in TX

-- PJ Gaenir (, April 12, 1999.

1. Bad data is introduced into the global financial system every day. All banks and other financial firms have balancing mechanisms and audit checks designed to ensure the integrity of what's coming in to their core systems. Sure, there will be a lot more to watch out for in '00, but be assured that all hands will be on deck to triple check everything. Bad files will be spotted and either corrected or rejected. Happens all the time. The real danger is that some number of foreign financial firms have so many system problems that they can't maintain their operational integrity and subsequently fail to meet transactional obligations. A ripple effect of failures could then ensue through the global payment system, triggering a liquidity crisis, further firm failures, etc. This is the sort of scenario that Greenspan and pals are worried about, not the prospect that some unremediated spreadsheet on a PC in Italy is going to get uploaded, "infect" the mainframes at Citibank, and kill the banking system with bad data. 2. Fuel will get to power plants the same way it does now. If not, facilities will have enough fuel stockpiled to get through any short term disruptions. If after 60 days the national rail system is still gridlocked because the switches don't know what year it is and engineers can't work around it, then it's lights out and the bodies of us hapless, unprepared pollies will start piling up like driftwood.

-- Polly Drone (, April 12, 1999.


I'm no polly, and I don't know beans about banks, but I can give you a little info on the fuel for power generation plants aspect of the situation. As I've mentioned previously I have a couple of sources in the local utilities industry here in the metro area. In any case, the word here is that the local utilities will be accumulating *at least* a three month (yeah MONTH) reserve for their coal fired plants.

Their bet is that they will be able to get more before the stored supply runs low. Of course this is also the capitol, which means that they're expecting to have priority on that sort of stuff...gotta keep billy jeff's coffee warm, y'know...

anyway so I've heard tell,


-- Arlin H. Adams (, April 12, 1999.

How about the same way they handle corrupt data today. Why do you assume that whoever designed the banking systems, railroad scheduling systems, etc. assumed that all incoming data would always be 100% valid? Real-life systems always include extensive error checking routines, especially on the input side. How about a real-life example? Many utilities in the US have already turned some of their clocks ahead and left them there and had no problems. Thus, there are already cases where interconnected systems are operating with different dates and nothing has happened. The whole idea of bad data infecting other systems like a virus is pure speculation and no one has produced a single real example.

The answer to your second question is the same as the first: the same way it gets there today. What part of the operation of a train do you believe is impossible without the aid of computers? Even if you can think of one, why do you believe that the computer that controls that function will fail in such a way as to be completely non-functional? Ever here of manual controls or workarounds? What about the fact that the train company just might have heard about this Y2K thing and they have already fixed whatever bugs there might have been or are on track to do so.

Now, I would never tell anyone not to prepare -- that is a personal decision that each one has to make. But, I think some of the doomsday scenarios that the media is spreading are a little extreme.

-- RMS (, April 12, 1999.

Arlin, fine for coal and fuel oil, but those of us who rely on natural gas (either directly from a gas utility or indirectly from an electric generating plant which burns natural gas) are stuck since it can't be stockpiled. Just checked NERC's 1/99 contingency plan, and the issue of fuel availability seems to be ignored altogether.

-- Brooks (, April 12, 1999.

"The pollys are good, very good." In my mind's eye, I see Humphrey Bogart ......

You know, Puddintame, you're getting very hard-nosed in your old age.

-- BigDog (, April 12, 1999.

Polly Drone, there've been long threads on this forum about recognizable "bad" data which is formatted improperly versus unrecognizable "corrupt" data which is more sinister because it is formatted correctly but is actually incorrect. I appreciate your post, but, respectfully, it has not resolved that issue.

I agree that the potential snarling of foreign institutions is a separate concern to the banking system.

With regard to the fuel issue, CP&L stated at the Cary, NC town meeting that it will probably increase its 50 to 75 day supply of coal at coal fired plants, but it will have no fuel stored at its gas fired plants. CP&L also uses a good deal of nuclear, where availability is no problem and if there's going to be a problem, presumably we'll know it well before January.

It's my understanding that some of CP&L's gas fired plants are mainly for peak production, so they may not be as critical as the coal plants. But if they are down, then that 75 day supply of coal may not last 75 days as some of that peak usage may just be shifted into different hours of day, thereby requiring a faster drawdown of the coal.

Polly Drone, I contend your post is a repetition of conclusory assurances. If the facts are good, let them be published and reviewed by the skeptics. My 12th grade laboratory reports would have received a quick F if they had contained nothing but an expertly written conclusion.

-- Puddintame (, April 12, 1999.

The issue of "corrupt" data is not as simple as getting past the incoming edit checks. The truly perverse "corrupt" data will be data which was wrongly calculated at the source (say an interest payment) but which falls within a "valid" computaional range. The receiving bank will have no way of knowing the amount transmitted to them is in error because it WILL pass all the edit checks

Point two for PJ

The nuke plants will NOT be shut down!. The political will for that is simply not there. Nada, ain't gonna happen, pedal to the metal and so on. Fuel supply for the coal plants is a non-issue in the short run. However, gas fired plants could be in big trouble if the SCADA systems or the compressors for the pipelines go down.

-- RD. ->H (, April 12, 1999.

Polly Drone said: "Bad data is introduced into the global financial system every day. All banks and other financial firms have balancing mechanisms and audit checks designed to ensure the integrity of what's coming in to their core systems. Sure, there will be a lot more to watch out for in '00, but be assured that all hands will be on deck to triple check everything. Bad files will be spotted and either corrected or rejected. Happens all the time.

Actually, the bad data issue is much more problematic than this. What Polly Drone is talking about is data that arrives at the bank through an external interface that is in the wrong format or is obviously false. With a bridge or filter in place, this data IS easily identified and can either be fixed or rejected.

The bigger problem, and the one which I assume Puddintame is addressing, is the problem of data which is in the correct format but because of Y2K problems which arise during calculations is corrupted. The best example of this is data that is not calculated properly, but is correctly formatted and is reasonable looking on the surface.

This is the problem that the Pollys refuse to address, because it is unsolvable.

I've recently had an experience with just such data downloaded from a government mainframe. The data was in the correct format, but it was subtly corrupted and inaccurate (and no, I won't tell you where the data came from, so don't ask).

Unfortunately, the maintainer of the database (who is still in Y2K remediation), did not know that the data was flawed. It is likely that this data (which is heavily date dependent) has been incorrect for a quite some time (I know it's been wrong for at least 3 weeks). Luckily, this data is not passed on any further.

So nice try Polly Drone, but that answer isn't going to cut it. Time for the next Polly to step up to the plate...

-- Nabi Davidson (, April 12, 1999.

RMS, You questioned the corrupt bank data scenario. Let me assure you that I don't know diddly squat about it. You know who clued me in to that deal? Alan Greenspan. Where did he say it? In testimony before Congress.

As I recall the gist, he said that it was a problem. He said or implied that the magnitude of the problem depended on the volume of corrupt data that the system was called upon to process. You should check this out for yourself. I need to find this myself for a presentation, so I'll be looking for it. It should be easy to find either at a government site or at Yardeni's site.

-- Puddintame (, April 12, 1999.

Well, went through quite a long thread with Andy on this awhile back.

Turns out, he could not come up with even one example of this type of data, relating to a Y2k error.

Maybe someone else can do better. Does anyone here have an example to start the discussion with?

-- Hoffmeister (, April 12, 1999.

Hoff, do you know any way to ask Alan Greenspan what in the heck he was talking about?

-- Puddintame (, April 12, 1999.

"the magnitude of the problem depend[s] on the volume of corrupt data that the system was called upon to process"

That phrase, Puddintame, captures the essence of the whole situation. How many things can go wrong at once without pulling down the system? It's a matter of fault tolerance. Yes, we live with failures everyday; yes, we correct them and carry on. How much can the failure level increase before it reaches critical mass?

Lately I've been noticing a heavy use of the phrase "Factors Outside Our Control." I've begun thinking of it as the FOOC element. As in "We're Foocked." I don't think the odds are on our side, given that something like 80% of the world's code is outside the US.

En route to a prep group meeting . . .

-- Faith Weaver (, April 12, 1999.


The data I referred to above was most likely skewed by faulty date calculations, since it was ratio data calculated based on dates. It was off enough that it would have hampered my needs had I not identified (manually) that it was faulty. But it was close enough to realistic that it would not have been picked up by a logic check.

As I stated earlier, I am not going to reveal where this data came from. You can either believe me, or not...

-- Nabi Davidson (, April 12, 1999.

Puddintame, no, I don't. I can make some guesses, but that is about all. If you post the links to the specific Greenspan statements, I can take a shot.

However, Greenspan isn't here postulating the collpase of the banking system based on these errors. I have a very hard time believing this to be the case, when, with all the Man-Years of IT experience on this board, no one has been able to construct a single believable example.

-- Hoffmeister (, April 12, 1999.

Nabi, I don't doubt your problem. In fact, it is the main point.

This stuff happens today. It has happened since computers started interfacing with each other. Any interface I've written involves checkpoints (sometimes called audit control points) on the actual data, in addition to the format checks. And somehow, these systems have survived.

That is the reason I ask for specific Y2k related examples. Banks in particular, are apparently staffing for an increase in error processing, and validation. For the systems to collapse, a flood of new types of errors must occur, which necessitates it being related to Y2k rollover issues.

-- Hoffmeister (, April 12, 1999.

Yes Hoff, you're right. There will not be even one y2k induced error in the banking system. Because you've shown that it's impossible. You sure are a whiz kid! Now please contact your asshole buddy Flint and prevent him from further panicking our other gentle readers into withdrawing their entire sack of loot, as he says he intends to do. After all, no one wants a bank run, now do they Hoff?

And BTW, on the thread you referenced, your word hole was SOUNDLY silenced by a CLEAR display of the FACTS. I will find it and link it here tonight.

-- a (a@a.a), April 12, 1999.

Yes, there is a critical distinction between 'bad' and 'corrupt' data, but my argument stands. Financial firms have procedures for uncovering both bad and corrupt data. Why is corrupt data considered to have such remarkable stealth properties? In the financial world, corrupt data is discovered through a process known as balancing the books. If the financial data doesn't balance out at the end of some arithmetic process, then everyone knows that there's a problem. If the corrupt data is non-financial - some text field, for example - then you probably won't notice it unless there's a manual review, but then again that sort of data is not as likely to create mayhem. Furthermore, there will be more manual review going on due to Y2K than at any time in the history of computing, so I don't expect very much corrupt data to sneak by in any form.

I will admit that there may be some theoretical situations where financial data could be corrupt, yet appear innocuous upon inspection and also escape the balancing process, but I believe that such cases would be extremely rare. I see no reason to believe that Y2K problems would be more likely to create such subtle, pernicious errors. If a case has been made for this, or examples given, I would be interested to hear about it. (I must confess, however, that I am not sufficiently inspired to search the archives for an hour.)

-- Polly Drone (, April 12, 1999.

Yes, 'a', please do. I made a quick look, but didn't find it. Should be interesting to see your view of what CLEAR FACTS were presented.

-- Hoffmeister (, April 12, 1999.

Polly Drone,

Since you are too lazy to do the necessary research, here is a good thread to read about the problem:

I coulda made it a hot link, but I don't want to do everything for you:-)...

-- Nabi Davidson (, April 12, 1999.

Well, I know absolutely nothing about banking software, and I'm trying hard to learn. Let me try to sum up what I *think* I've read so far.

1) If telecom problems prevent transmissions or garble them badly, the bad data problem really doesn't happen, because these data will be rejected due to low level errors (CRC's, formatting, length checks, etc.). However, all banks subject to the telecom problems are dead in the water until these problems are resolved. In the meantime, not much banking happens.

2) If date bugs cause wildly inaccurate calculations, the formatting might be correct, but these data will be trapped by a variety of types of sanity checks. In this case, would the offending transmitting bank be cut out until they get things fixed? However, the receiving bank wouldn't be affected.

3) If date bugs cause very subtle, minor errors in values, it might be a long time before anyone notices. By that time, errors may have spread beyond any possibility of 'backing them out'. Nobody has mentioned any procedures in place currently for this condition, but I'd guess there are some huristic procedures to get accounts back into balance when we know they're wrong but can't determine what might be right. Tracking down the root cause might be a long and difficult process. If too much of this happens, banking suffers a credibility problem to some degree.

Seems to me this third condition is what we're worried about most. How likely is this to be widespread (as opposed to the first two)?

-- Flint (, April 12, 1999.

I would think that if the Federal Government thinks data exchanges are a problem, banks may think it too.


See thread ...

OMB (Office of Management and Budget) Directs Federal Agencies To Take Y2K Lead In States Social Services Programs 000ddg

-- Diane J. Squire (, April 12, 1999.

Nabi -

Thanks for the link, but all I saw in there was 2 or 3 programmers who have the heebie-jeebies. I already know that financial systems are complex and I already know that software sucks in general - no news there. But I saw no specific arguments to make me believe that Y2K will cause a deluge of subtly corrupt data that will bring the banking system to its knees. I still believe that corrupt data will have far less chance of slipping by in '00 than it does today, due to all those cancelled vacations and all the extra scrutiny.

The only thing in there that was close to an argument was the theory that there might be so many millions of bad transactions that there just won't be the time or resources to deal with everything in a timely fashion. You might be able to pretty up that line of reasoning and cause some consternation, but I suspect it will just come down to yet another guess about how much stuff will still be broken.

But I'm not impressed by isolated scare stories from programmers. I've worked in financial IT for 10 years, and been responsible for data integrity in large mainframe systems that processed billions of $ daily, so when it comes to evaluations based on gut feeling I don't need any proxies. Throw some logic at me and I may be swayed, but anecdotes are not an argument, and most of them are apocryphal to boot. (Plus the guys in that thread have credibility problems anyway - one of them said something like "just wait for the Euro" (whoops) and another considered a cancelled project in Moscow to be a Y2K omen. They couldn't care less about Y2K in Russia.)

-- Polly Drone (, April 12, 1999.

Puddintame did light the warning lights in my head when he mentioned CP&L and their gas-fired generators. I'm familiar with some of their plants (Hyco & Mayo in Person County), including one large gas-fired turbine located at their Hyco Plant. Now comes the big "Ooopps!"

CP&L (and I guess most other power companies) can't/won't store gas reserves for those gas units. If things get bad and CP&L has to "black start" their system, how are they going to follow their process and use the gas turbine to start the smallest coal-fired unit at their Hyco Plant if there is not sufficient quantity and pressure of natural gas? If Hyco can't be started, how do they start other plants (Mayo and Shearon Harris comes to mind) which need power from Hyco for start-up? How far does this daisy chain extend?

It reminds me of the old saw: "For want of a nail..."


-- Wildweasel (, April 12, 1999.

CitiBank is spending $925,000,000. If there is no problem Polly Drone, why are these banks not compliant?

-- Mike Lang (, April 12, 1999.

Here ya go Hoff...dredged up for your re-edification:

The problem of corrupt data fatally infecting the world-wide Banking system

-- a (a@a.a), April 12, 1999.

"We do not know or cannot really realistically make an evaluation of what the economic impact is as a consequence of the breakdowns that may occur. We do not know the size. We do not know the contagion and interaction within the system, and we do not know how rapidly we can resolve the problem."

Alan Greenspan - Chairman, Federal Reserve Board Excerpted from testimony given on February 25th before Senator Bob Bennett's Subcommittee

Polly Drone, Hoff, et al., the above is Greenspan. I think the context is talking about the millennium bug in general, not necessarily the corrupt banking data situation. I got the above quote from a Westegaard site. I haven't yet gotten to the source document.

-- Puddintame (, April 12, 1999.

Mike - I have no doubt that Citi had $900 mil worth of Y2K problems. I didn't say that there was no problem.

Puddintame - I absolutely agree with that comment by Greenspan.

My purpose for entering this thread was to address the specific issue of corrupt data from foreign institutions infecting U.S. banks. My answer is that banking systems are designed to detect corruption in critical financial data, and that manual checking in '00 will further improve upon these mechanisms. I see no qualitative reasons why Y2K failures will create 'different', difficult to detect data distortions that will have a better chance of slipping through the controls.

Quantitatively, however, if U.S. banks are absolutely deluged with bad data and corrupt data from every direction, then I agree that that would be problematic. Can I prove that there won't be such a deluge? No. Can you prove that there will be? No.

-- Polly Drone (, April 12, 1999.

Polly Drone, Likewise, I am not in a position to disagree with you. My point is that if panic is a concern, and if the problem has been sufficiently planned for, then lay out the plan in detail and let it be peer reviewed in the public domain by experts.

Heck, the medical community will not alter its treatment of ingrown toenails until data has been tested and published in a peer reviewed journal. Granted, we can't ask for data on something that's 8 months in the future, but we can learn the details of the plan. . . if the Fed. thought that would be helpful.

I assume that you are knowledgeable and well-intentioned, even so, you have given no details of the contingency plan adopted by the Fed. Why should I have to rely on you, an anonymous expert; no slight intended, but I'm real touchy about my sources of fiduciary advice. If the banking community wants to keep depositor money in the vault, it seems to me that they should detail the security measures. The fact that they haven't done that gives me some concern.

-- Puddintame (, April 12, 1999.

Puddintame -

There is no master plan. Each firm has its own controls and procedures to ensure data integrity. My point is that Y2K data corruption will not possess some exotic qualities that will allow it to sneak past the gates. Especially with all the extra eyes looking at it. But this is a distributed solution to a distributed problem, there isn't one master plan that controls things.

As far as the Fed goes, they rarely reveal the steps that they are prepared to take to resolve a market crisis, though in this case I believe that statements have been made to the effect that liquidity will be made available to address potential Y2K failures.

With respect to contingency planning in general, the banking and investment industry is doing a lot of planning. Start at the Fed's web site, or, or maybe and go from there. No one is keeping that sort of thing secret, and you can evaluate the contingency planning work for yourself. The financial sector will not be caught by surprise by Y2K failures in 1/00, that much is certain. The only question is how many failures there will be and how critical they are to the overall system.

-- Polly Drone (, April 12, 1999.

Well, 'a', thanks for finding the thread.

I suppose you make your own call as to the outcome. Andy, nor anyone else, was able to come up with even one example of a Y2k related banking transaction error fitting the subject.

Again, I'll ask, how you can postulate massive numbers of errors overwhelming the system, when you cannot even describe one believable example?

-- Hoffmeister (, April 12, 1999.

Polly Drone, I haven't been able to get anything other that gibberish and committee-speak about contingency plans. Sure , we all know about the Feds plan to make extra currency available, and utilities will try to use conference calls and radio for load control, etc., etc, etc. In other words, we know about what any third grader would do, but we don't have many details.

Actually, I should not have used the phrase "contingency plan" above. I meant the "controls and procedures to ensure data integrity" as you more eloquently stated above.

I do think I will write First Union Bank and ask them to describe their controls in detail. Do you think I'll get a substantive response? I don't. But who knows.

Now here's my point. If First Union doesn't respond, then why do they expect people to keep their money in book entries during rollover. I mean when you get right down to it, this is a poker game where the small time depositor holds all the cards, at least until January 1. If First Union doesn't respond, then why should I wager a penny on the stability of the banking system. Patriotism? That's the only reason I can think of.

Now if First Union does respond, then bingo. I post the response here and it'll be peer reviewed in about 2 hours. I'll have enough information that I could have my own fiduciary examine the evidence.

I believe in a post above you said the y2k corruptions were not more likely pernicious than other errors. I was under the impression that there was an increased chance of insidious harm from this corrupt data. I have no sources for that other than the bad data vs. corrupt data threads on this forum. Does y2k cause greater chance for properly formatted corruption? Is this not more insidious that improperly formatted data? Does it not require more resources for correction?

Polly, I'll say this. You are a very good writer. I would think someone with your power of expression would be able to write the persuasive argument if it is out there. Maybe you will.

-- Puddintame (, April 12, 1999.

Polly squawked, "one of them said something like 'just wait for the Euro' (whoops)"



"and another considered a cancelled project in Moscow to be a Y2K omen. They couldn't care less about Y2K in Russia.)"


-- Doubting thomas (, April 12, 1999.


You seem to have painted yourself into a corner. Would you be satisfied with a listing of the code that actually does the data filtering at all levels? Could you read and understand this code (there's a huge amount of it)?

If not, would you be satisfied by a geek *telling* you what the code did and assuring you that it will be sufficient and has worked fine so far? How would you know you weren't being fed a line? Would you understand the geek's explanation?

If not, would you listen to a manager who doesn't really understand the code but knows how banking works? But the manager would tell you essentially what Polly is telling you, and you're not satisfied with that.

What are you really asking for here?

-- Flint (, April 12, 1999.

2 or so reported problems with the Euro in 3+ months is quite remarkable if you ask me. Overall it appears to have turned out better than even the optimists predicted. As far as Russia goes, I still say they have a total fix on failure mentality. But my point was that a project that got cancelled in late 98 was probably due to the economic collapse stemming from the August devaluation, not some fear that "it's too late" to fix Y2K. Both sidebars, anyway.

-- Polly Drone (, April 12, 1999.

I'm clueless about corrupt data, but I can answer the fuel question. First of all about 93% of the country's trains run on fuel not electricity, so if the power went down it would not matter (as long as the trains could be manually directed and coal could be gotten to them) Secondly, fuel rods at nuke plants last a full 2 years, so assumming the changes were made fairly near to the century there wouldn't seem to be aq problem.. p. white

-- p. white (, April 12, 1999.

Polly crackered: "2 or so reported problems with the Euro in 3+ months is quite remarkable if you ask me. Overall it appears to have turned out better than even the optimists predicted."

Breaks my heart to link to a guy I think is off base in his recommendations (not to mention his religious fanatacism), but:


The primary source in English worked once upon a time, I swear, but no more...but if you speak Dutch, try:


-- Doubting Thomas (, April 12, 1999.

Puddintame -

Even if your request for info got past the customer service and legal firewalls, I doubt you would ever get any bank to give you system balancing procedures. And if you did get your hands on them, they would look like gibberish unless you knew the details of the specific systems. When I first assumed responsibility for system balancing in a bank it took me months to figure out what the hell was going on, and I have a mathematics degree. I have no doubt that this sounds like polly obfuscation, but what can I do? All i can say is that any bank that didn't have controls in place to deal with corrupt data, they would have been toast long before Y2K came up. So unless someone can tell me why Y2K defects will be stealthier than pre-Y2K problems, I'm confident that banks will spot Y2K-corrupted data. The question I have is whether they'll drown under the volume of bad data from foreign systems. Don't know.

There is no way that banks can prove they are compliant. Keep in mind several things, though. For one, FDIC insurance will still cover your deposits under $100K. So, unless you believe in a 9 or 10 scenario, then you'll get your money - even if your bank chokes for a few days, or even goes under. If anyone things that balance records from 12/31/99 are going to be wiped out, then that warrants another thread regarding data backups and potential corruption scenarios. Furthermore, banks are being independently scrutinized more intensely than any other industry. I've been on the receiving end of an FDIC audit and can attest that those examiners know their business and are not pushovers. They will kick butt if they think a bank has weak controls, and I have no doubt that they are terrorizing everyone on Y2K. Unfortunately, the results of those exams are kept confidential, so the conspiracy theorists have free rein to speculate, and the optimists have no hard evidence. It's tough on this side of the fence, I admit it.

-- Polly Drone (, April 12, 1999.

Doubting Thomas -

If you want to debate parallels between the euro and Y2K, open another thread and I'll spar with you tomorrow if I'm having another slow day. But you're just trying to turn this thread into another unfocused free-for-all.

-- Polly Drone (, April 12, 1999.

Flint, First Union is not going to give me any details, so it doesn't really matter. Let pretend, for the sake of discussion, that I did get the details. First I'd run it past you and other programmers on this forum to see what you all said. Then I'd use the same decision making process I always use. Maybe get more advice from my own experts. I frequently rely on experts . . . *of my own choosing*.

I argue that the burden is on the banks. If they take the attitude that you suggested above, to wit: "You wouldn't know what to do with it if we gave it to you", then they will probably get what they deserve, to their detriment and ours.

Flint, I have great confidence in the technical ability of this country. As a child, I had absolutely no doubt that the Apollo astronauts would make it to the moon and back. I was completely satisfied with Walter Cronkite sitting in a chair holding hokey models and explaining what was going to happen. Now the banking system is giving the same hokey conclusory explanations, except this time WE are sitting atop the metaphorical rocket. Unless the banking system gets rid of the hokey sounding conclusions and comes up with some engineering and testing data, a lot of reasonable people might decide to get out of the rocket of the watch this launch from afar.

-- Puddintame (, April 12, 1999.

This from the Comptroller of the Currency addressing the House of Representatives on Nov 7,1997.(Committee on Banking and Financial Services)

Data Exchange. The multiple linkages banks have with other counterparties -- other financial institutions, governments, borrowers, and depositors -- require that financial institutions allow sufficient time to assess the effects of their year 2000 solutions on data transfers and exchanges. It is not enough for insured depository institutions just to make their systems year 2000 compliant. Should their counterparties fail to address the year 2000 problem, or adopt a method which produces data that are unrecognizable by the financial institution, electronic fund transfers might fail or financial institution systems might be contaminated with corrupt data.

Where was that withdrawal form anyway.....

-- Mike Lang (, April 12, 1999.

Flint: you're slipping son (I first noticed it on the FAA thread when you accused me of claiming the Denver airport baggage system was connected to the approach radar...but actually, Robert came up with a pretty good connection after all...).

The millions of lines of code you refer to that detect bad data and require a gaggle of geeks to make sense of have nothing to do with detecting data that is corrupt, but valid. This seems to be the point of departure for the denialists. When thousands of banks all over the world (Russia and Italy come to mind) start hemorrhaging fucked up data, do you think they are going to voluntarily pull themselves offline and say "Uh-Oh. We gots a problem-o! Guess we'll just shut down 100% of our economy until we fix on failure. " Hell no, they'll be slamming that shit into the networks as if nothing ever happened. Won't be long after that until there's global hell to pay, IMHO.

-- a (a@a.a), April 12, 1999.

Polly squeegeed:

"you're just trying to turn this thread into another unfocused free- for-all."

No I'm not. I'm trying to make some very specific points. To wit:

1) You are making broad assumptions about noncorrupt data and how certain things just "can't" happen because the FDIC has done such a darn good job. While I believe you when you say that they are tough as nails, I am sure the European regulators were as well. 4 billion Euro is not small change, no matter what the exchange rate might be today.

2) You extrapolate that large numbers of Euro problems have not been reported, so therefore there haven't been many Euro problems. As a journalist with many years' experience filtering bullshit, "Bullshit." You should know how intense the gag order is on discussing internal Y2K issues at almost any company, but especially at financial institutions. These problems are not easy to find and corroborate... you have to know where to look. (And also when you're being spun.)

3) I am not the one arguing that the Euro is just like Y2K, or comparing them, so save your slow days for what I imagine is much- needed R&R. As I recall, you brought up the Euro and its "smooth transition" as an argument that Y2K would go the same for the banks. Tit for tat, Polly...

4) Thanks to Mike Lang for posting that testimony about data exchanges...if you really want, I'll go find material from Greenspan, Capers Jones, Leon Kappelman, Howard Rubin or others that say essentially the same thing... but I think you grasp the point, or hope you do...

Back atcha....


-- Doubting Thomas (, April 12, 1999.

While you people are conducting such a fine academic argument, can any of you explain why my credit union is showing numerous zeros for all of the information that used to be in their computers about me and about the loan transactions that once were in my account?

-- frantically (, April 13, 1999.

Note from current Yardeni reporter survey that 21% of the current Y2K problems being seen entail Y2K-induced database corruption, not just format problems (that's another, separate issue). Why shouldn't I assume, however *naively*, that banking databases will see similar problems (to be precise, not 21% of all databases, but, of databases experiencing Y2K problems, 21% incidence of corruption problems)?

It's not much of a stretch to assume that this will involve not only intra-bank (bad enough) but inter-bank data exchanges.

-- BigDog (, April 13, 1999.

DT -

1) I am making an assumption that on qualitative terms, current data integrity controls should be able to spot Y2K induced errors as well as the non-Y2K errors that happen today. No one has given me reason to believe otherwise. I can't counter the quantitative argument - if every foreign bank starts sending corrupt data, the volume of reconciliation and repair will definitely cause serious problems. And I didn't say that anything can't happen, I'm only trying to make the case that corrupt data is not necessarily an unstoppable plague. If the volume is low enough, it will be dealt with.

2) I extrapolate no such thing. I know perfectly well that most system problems don't make the media. I'm sure there were lots of Euro glitches that had to be dealt with. However, I thought that the raging debate on these forums was about whether the world economy can be brought to its knees by Y2K, not whether there would just be some problems with Y2K. As far as the Euro goes, not a single financial firm has gone under because of it, and I'm not aware of any large scale disruption to consumers because of it. So if nothing else, it's an example of a large scale, cross-border, highly complex system effort - which had a fixed deadline - and which didn't cause material disruption to the financial infrastructure.

3)I didn't make that argument. I took an ill-advised potshot at what I considered to be an hysterical programmer. Thereby violating my own rule against thread pollution and opening myself up to your assault. That'll learn me.

4) I have no argument with that data exchange comment. Any firm that sends bad data to another firm 'might' cause problems, no doubt. Like everything else with Y2K, the best solution is that everyone gets their systems fixed. My only point is that all banking and financial systems already have ways to deal with corrupt data, even if it appears superficially valid, and that these mechanisms will go a long way to catching Y2K errors as well. But I have no response for a's scenario of thousands of banks spewing garbage data. If you believe that thousands of banks will do that, then I would say go buy even more food because of course it will be bad.

-- Polly Drone (, April 13, 1999.

Polly- I think we've mostly reached an equilbrium here, but I still have two questions in reference to points 1) and 4):

1) "If the volume is low enough, it will be dealt with." I think here is the crux of the debate, and I might agree that there is some hope on the domestic front. But internationally, when most of the world is asleep at the wheel on this, I can't conceive of how the volume won't be high, unless trading partners are outright locked out of the financial system. But correct me if you have information to the contrary.

2) You were referencing the Euro when you said, "So if nothing else, it's an example of a large scale, cross-border, highly complex system effort - which had a fixed deadline - and which didn't cause material disruption to the financial infrastructure." My question is: isn't Y2K a far more complex and insidious problem, because while the Euro conversion involved a limited number of applications and would not affect the underlying system operability, Y2K has the potential to cause instability, crashes, and data corruption at the system and application level? I guess I am asking, which is a bigger problem, even strictly within the confines of the financial world? (I'll leave for another time my questions about European neglect of the Y2K issue in favor of the Euro)...

back atcha...


-- Doubting Thomas (, April 13, 1999.

I meant points 1) and 2)...


-- Doubting Thomas (, April 13, 1999.

DT -

1) I have no hard information that makes me feel especially comfortable about preparedness internationally. But I do believe that the financial firms overseas are at least in better shape than other areas, because they have been beaten over the head by their U.S. counterparties, by regulators, and by various industry groups. And I know that testing of the banking system is being planned - in particular a Global Payments Systems Test scheduled for June which will encompass a number of key international systems and at least 10 countries. In general, I'm most concerned about the foreign side of the Y2K equation, and I think there will be problems, but I also think the pessimists are too eager to say "NOTHING is being done."

I also think that the performance of the U.S. economy through 10 years of Japanese recession as well as the emrging markets crisis of the past year should tell us something - but I know that's not an argument I can really extend to Y2K with any clarity.

2) I agree that Y2K is much bigger and exists on more levels than the Euro conversion. I wouldn't want to extend the analogy very far. However, I stand by my claim that the Euro is a good counterexample to anyone who says that large projects can never get done on time and always result in catastrophe. As far as its negative impact on Y2K work in Europe - true enough.

-- Polly Drone (, April 14, 1999.

Polly- thanks for your insightful and frank responses. Time will tell how right you are, I suppose. See you on some other thread...


-- Doubting Thomas (, April 14, 1999.

Well i just caught the tail end of all this - you guys crack me up - the basic problem is outlined and thouroughly thrashed out in the two threads a referenced above.


(And never will...)

-- Andy (, April 14, 1999.

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