Top U.K. Bank May Fail Y2K Test : LUSENET : TimeBomb 2000 (Y2000) : One Thread

The U.K. government's Year 2000 agency is battling to force the country's banking watchdog to name and shame a household financial institution whose failure to tackle its Y2K problems has left it facing potential ruin.

Action 2000 -- the government agency set up by the Department of Trade and Industry to get the United Kingdom through the millennium date change crisis -- said it plans to point out organizations that fail to meet Y2K obligations.

The unnamed "high impact" company is said by the Financial Services Authority to be at serious risk of not completing a Y2K fix by the deadline. The FSA's "high impact" definition covers banks, building societies, and insurance companies, institutions whose collapse could spark chaos in the financial markets.

The FSA states its Y2K policy includes identifying those companies in which year 2000 problems could pose significant investor, prudential, or market risks. But the authority -- with the full support of HM Treasury -- said it is refusing even to name the company for legal and policy reasons, although it could order the company to stop doing business, force it to close down, or make it merge with another.

An FSA spokesman said the institution had not been negligent in its Y2K project work, but had been taken by surprise. "It is not a matter of complacency," he said. "There was a failure to grasp early enough the full scale of what was involved."

Action 2000 has written to Treasury ministers asking them to force the FSA to name financial organizations that are behind schedule in making their systems millennium compliant. "We can't treat the banks differently," said Gwyneth Flower, CEO of Action 2000.

But the FSA was supported in its decision by Robin Guenier, executive director of rival, Taskforce 2000.

"Naming and shaming is important in nearly all industry sectors, but I am not sure it is good for the financial sector," Guenier said. "It might start a rush on the bank and the knock-on effect could cause serious problems." The FSA has a huge responsibility and must follow up with some sort of announcement, the organization said.

The FSA said a further eight of the 400 high- or medium-impact companies are also behind schedule in their Y2K projects, but they are expected to be on track in time. All institutions must submit a statement by Sept. 30 stating millennium compliance.

-- regular (zzz@z.z), June 28, 1999


as a follow-up

Sunday London Times - June 28, 1999 Up to 300 of Britain's top 1,000 firms are risking tens of thousands of jobs and billions of pounds of profits because crucial technology is unlikely to be bug-compliant by the end of the year, according to a comprehensive survey by Taskforce 2000 and Dibb Lupton Alsop, the firm of solicitors.

A spot of tea with your TOAST?

-- Linda (, June 28, 1999.

Moderation questions? read the FAQ