I am a new to the subject of Y2K. I started looking into the subject a couple of months ago. About three weeks ago I stumbled across this forum and I think it is a great place to get information. Unfortunately, the more I learn the more concerned I become. Any my question is about the global banking system. My research has led me to believe that a small percentage of the banks in the US will not be compliant by Jan. 1. Also, it appears that a large percentage of banks in Asia, Latin Amercia and Europe mat not be compliant by the end of the year. This concerns me becuse I think even a small percentage of errors could compound on themselves and create more errors. Miss - calculated data would generate more miss - caluated data and would generate even more bad data etc. This thought is really bugging me. Don't the the banks also heavily rely on the international communications system, which is also at risk. If large numbers of banks around the world start generating bad statements, wouldn't that destroy consumer confidence in the banks? Are my assumptions and conclusions about the banks anywhere close to the mark? If anyone can give me a good arguement why I shouldn't worry I would really apperciate it. Thanks.

-- AverageJoe (Average@Joe.com), June 29, 1999

Answers

Welcome to the world of GI's!

You want an argument that will convince you that you shouldn't worry? I'm affraid there ain't none. The more you research and the more you think the more worried you're gonna get.

I'm sure you'll soon get answers from regular posters who will refer you to a few links to get you started. Wait and see...

-- The Outcast (Somewhere@southerneurope.eu), June 29, 1999.

Go to www.garynorth.com, and click on the topic of "Banking". You will learn a lot.

-- King of Spain (madrid@aol.com), June 29, 1999.

Actually AJ, you'll find my answer to this two threads 'below'. (Matt Drudge). This was done by us last October, and things aren't any better today my friend.

-- Will continue (farming@home.com), June 29, 1999.

Joe,

When I was growing up, 9 of the 10 largest banks in the world were U.S. banks. I read a report not long ago, maybe 3-4 weeks, that listed the top 20 banks today. Citibank is #18 I believe. That's it. The rest are mostly Pacific Rim and European banks.

Don McAlvany wrote a long article some time ago about the crisis in Japan. He said that if the 3 largest Japanese banks fail, there isn't enough money on the planet to bail them out.

If EVERY bank in the U.S. is compliant with absolutely no problems on rollover...we're still in deep doo-doo my friend!

-- Don (dwegner@cheyenneweb.com), June 29, 1999.

So where were you guys when there was a question for financial institution programmers? Read the thread and see who posted if you want some more info.

Most reactionary people here accuse me of being a "polly" and trying to keep people from preparing. I don't.

However, I would like to point out some information that would be handy given that I work for a financial services firm.

1. Yes, banks and most other businesses are reliant on telecommunications. That single event could have the largest impact on how businesses operate. However, given the amount of communications and EDI (electronic Data Interchange) that happens between companies, there are ways around this, and Yes, even today modern financial institutions use them: paper and tapes. If banks can't xmit/recieve via telephone lines, they can use tape. Slower, yes, but normally possible.

2. Financial institutions do have loans and other financial instruments that reach more than one year in the future (read: many financial instrument look into the future...duh). So Y2k stuff isn't entirely "new" to them, as there HAVE been Y2k related failures in the past (sometimes as early as the 70's), but they have been fixed and you didn't know about them. So, they know about the problem, and are addressing it. Banks are interested, like many other businesses, in being an ongoing concern. Something about having cushy jobs that appeal to bankers, I suppose.

3. There has been talk of making non Y2k compliant banks/institutions convert over to Y2k compliant systems if they don't meet certain deadlines. The SEC is discussing it now for brokerage firms.

4. The smaller institutions are the ones most at risk. They are reliant on vendors for their solutions as they generally may not have their own IT staff with programmers. The bigger banks have the bigger $$$ to investing in renovating the code and contingency planning. Plus, the bigger banks are secretly licking their chops at the thought of other smaller banks/institutions going down for non-compliance.

No one wants to be left holding the bag. NO ONE can predict what errors will happen, how many, where, or how long. That's your personal guess. And anyone who says that they know what's going to happen is pulling that right out of their ass.

By the way, be watching your mailbox for your January 2000 statement when it's time. Bet your ass you'll get it.

-- JAW (clueless@pollyanna.com), June 29, 1999.

Your assumptions and projections are close to mine. It could be quite chaotic for a few minutes (maybe 525,600 or so). After that, things should settle down nicely. One way or another.

-- Mad Monk (madmonk@hawaiian.net), June 30, 1999.