Elec. Telegraph: banks braced for Year 2000 frenzy

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread


Banks braced for Year 2000 cash frenzy, By George Trefgarne

CENTRAL banks from the world's most advanced countries are preparing to print billions of bank notes to cover heavy demand during the start of the millennium.

According to a report on Year 2000 preparations from the Bank of England, the US Federal Reserve is printing an extra $50 billion [Approx. $75b], the Bank of Japan one trillion yen [approx. $7.5b], the Hong Kong Monetary Authority HK$60 billion [approx.$7.5b] and the Swedish Riksbank SEK10 billion [approx. $11m].

The Bank of England has said it will be printing £3 billion extra money and it has not destroyed any £20 notes since January. Central banks in Italy, Switzerland, Singapore and Canada are also printing more money. Only in France, Germany and the Netherlands are central bankers claiming that existing stocks will be adequate.

The huge amounts of new cash are creating a worldwide security headache as they will have to stored in secret locations and distributed mostly to cash machines. However, the extra banknotes underline the seriousness with which central bankers are taking the arrival of the new millennium.

John Trundle, head of the Bank of England's infrastructure division, said: "All central banks are ensuring there will be adequate supplies of cash. But the real issue is to make sure it is distributed to cash machines where there will be a demand for it."

Central banks are determined that no cash shortages will be caused by any Year 2000 computer glitches or by bank customers emptying their accounts either as a precaution or in order to pay for the extended public holiday over the new year. In Belgium, the central bank has warned that the millennium could trigger "possible extreme reactions from the public".

Mr Trundle said that in Britain the picture is one of "informed confidence" about Year 2000 and its associated problems. The Bank of England believes that financial institutions and credit card payment systems, such as Visa, have virtually completed their preparations. All that is required is contingency planning for any emergencies.

-- Old Git (anon@spamproblems.com), July 22, 1999


Sorry folks.

Nice try.

When all else fails, call the Public Relations dept.

Not nearly enough bula bula to save the system.

How can banks afford to borrow this kind of money from the FEDS?

Will it be loaned to the banks at interest?

What collateral will the banks offer for all this new currency?

In a panic situation, that collateral would fall in value very rapidly, because interest rates would rise dramatically, and any long term loans would be perceived as extremely risky. In such situations, every bank in the country would become totally insolvent.

Banks would be foolish to start borrowing cash from the Federal Reserve in crisis, because there reallt isn't enough cah available to stem the crisis. A bank that simply closed its door in a crisis situation would be better off when it blew over than would be a bank that borrowed to try to keep its door open.

It is unimaginable that any sizeable percentage of bank deposits could simply be cashed out by printing currency. Remember, we are talking about some $4281 Billion in bank deposits.

We are talking about a national panic that develops in matter of days or weeks. At 9 billion notes printed annually (BEP presses working 7/24 right now), the Bureau of Engraving can basically print 173 million notes in a week.

Even if possible, this brings reserves up to about %4.6 Yeah baby!

%4.6 of us can get all our money or all of us can get $4.60 for every $100 dollar on deposit.

Koskinen said they could print out money as fast as we can take it out.

Yes, Monopoly Money

The choice is yours for a little while longer.

-- MarktheFart (quke@ix.netcom.com), July 22, 1999.

Moderation questions? read the FAQ