66% Of U.S. Banks Receive 'High' Y2K Grades; Only 4.5% Rated 'Low' or 'Below Average'greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I thought the banks were all done with their Y2K work, long ago. Weiss doesn't think so. Link dated today. And I wonder why only 13% answered the survey... <:)=
In a new survey of Year 2000 preparedness, 870 of 1,316 banks and S&Ls (66.1%) reported they had completed all of their Y2K remediation and testing, for both internal and service provider computer systems, according to Weiss Ratings, Inc., the only provider of Y2K ratings on financial institutions.
An additional 386 (29.3%) reported past and expected completion dates that Weiss deemed "Average," or in line with regulatory standards. Of the remaining institutions, 36, or 2.7%, were assigned a Weiss Y2K Rating of "Below Average," while 24, or 1.8%, were rated "Low."
The Weiss Y2K survey, mailed on June 30, 1999 to 10,434 federally insured depository institutions, asked 14 questions about each company's timeline for completing various milestones in the Y2K preparation process. Weiss then judged the responses to these questions based on standards established by banking regulators.
"June 30 represented a major milestone in banks' Y2K preparations, and most banks appear to have lived up to the challenge," commented Martin D. Weiss, Ph.D., chairman of Weiss Ratings, Inc. "These results represent a marked improvement from our previous surveys and should go a long way toward quelling the public's uneasiness. Nevertheless, consumers should keep in mind that, due to the voluntary nature of our survey, it is safe to assume a tendency for the better-prepared institutions to come forward more readily."
The mid-year Weiss Y2K survey results imply a drastic improvement when compared to those of year-end 1998 in which 247 of 1,128 banks and S&Ls reported completion dates that were deemed to be inadequate.
Of those, 195, or 17% of year-end survey respondents, were assigned a Y2K grade of "Below Average," while 52, or five percent, were rated "Low." Only 177 institutions, or 15.6%, received a "High" rating. The balance, representing 62.5% of respondents, indicated a level of progress that was deemed "Average."
Although the gap has narrowed, the Weiss results continue to contradict recently announced tallies by the FDIC -- that less than one percent of insured institutions have failed to achieve a "satisfactory" rating in their Y2K compliance evaluations.
"This discrepancy remains a mystery to me," added Dr. Weiss. "We are using the regulators' exact guidelines. Therefore, regulators are either basing their statistics on old data or are giving banks some leeway in their evaluations. Either way, the end result is that consumers are not being given an accurate picture."
By evaluating the banks' actual or expected completion dates for critical tasks, the Weiss Y2K survey separates those that have truly made good progress from those that appear to be lagging behind. Weiss advises consumers and analysts to judge the Y2K ratings in the context of a company's overall financial strength. A bank with abundant capital resources is better equipped to remedy its Y2K problems today and cope with any economic consequences after the year 2000. In contrast, a bank with apparent deficiencies in both its Y2K progress and its financial stability may be at serious risk.
Among institutions receiving both a "High" Y2K grade and a strong financial safety rating are:
-- Regions Bank (Birmingham, AL)
-- Branch Banking & Trust Co. (Winston-Salem, NC)
-- Citizens Bank RI (Providence, RI)
Institutions receiving a "Low" Y2K progress rating and a "Weak" financial safety rating, include:
-- Bridgeview Bank & Trust Co. (Bridgeview, IL)
-- United Bank MI (Grand Rapids, MI)
While none of the very large banks surveyed by Weiss (with $1 billion or more in assets) received "Low" Y2K grades, banks such as Imperial Bank (Englewood, CA) and Lockport Savings Bank (Lockport, NY) were graded "Below Average" for their Y2K progress. The largest banks receiving a grade of "Average" include Bank of America (Charlotte, NC), Citibank (New York, NY), and Morgan Guaranty Trust Co. (New York, NY).
Weiss Calls For Industry Disclosure
Both consumers and regulators have expressed growing concerns that ill-prepared financial institutions may be unable to properly process account transaction and money transfers after January 1, 2000.
In order to help quell these concerns and protect consumers from doing business with ill-prepared companies, Weiss is urging state and federal regulators to require disclosure regarding the Y2K readiness of the institutions they supervise.
In the absence of this disclosure, the Weiss Y2K Ratings are currently the only evaluations available to consumers. For $15 per company, consumers may acquire both a Weiss Y2K Rating and a Weiss Safety Rating on a financial institution by calling 1-800-289-9222. If a Y2K Rating is not available, consumers will receive a Weiss Safety Rating, plus specific information on how to contact the Year 2000 project manager or financial officer at their bank.
Weiss publishes financial safety and Y2K readiness ratings on insurers, banks, and S&Ls. The accuracy of its ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations. For more information, visit the Weiss Ratings web site at www.weissratings.com.
Note to editors: Ratings on specific banks are available upon request, along with a blank copy of the Weiss Y2K survey.
-- Sysman (email@example.com), September 07, 1999
To all depositors at the "average" or lower institutions, I have some advice:
Based on our illustrious government's honesty with the American people, I would take any ratings from insiders as dubious at best. With Weiss raising the flag, it's just another blurb in the WSJ tommorrow that goes ignored...
-- John Galt (firstname.lastname@example.org), September 07, 1999.
So... 870 out of 10,434 institutions self-report that they are all done.
No wonder the ABA is getting into the sermon-writing business. Prayer may be their only hope.
Gotta get me some of that old time religion (and a bag of gold and silver).
-- Linda (email@example.com), September 07, 1999.
2.7% are below average? Are 2.7% above average and everybody else is exactly average? What morons.
-- Dave (firstname.lastname@example.org), September 07, 1999.
See my post above entitled "Another Bank Alarm" for an inside perspective on the banking industry.
-- cody (email@example.com), September 07, 1999.
Roger W. Ferguson, Jr., a member of the Board of Governors of the US Federal Reserve System and Chairman of the Joint Year 2000 Council - remarks before the George Washington University Y2K Group in Washington, D.C. on July 29, 1999 - his statement included in full on BIS Year2000 - (Which shows fine irony.)
"Another fact that gives me confidence in the domestic financial sector's preparations for the century date change is that almost all of the nation's banks, thrift institutions, credit unions are ready for Year 2000. The Federal Deposit Insurance Corporation (FDIC) reported last month that 98.3% of insured institutions were ready."
His confidence inspires me. I'm going to bake a seven layer chocolate cake now. When I'm finished I'm going to sit down and eat "almost all" of a nice big piece and think about where I'm going to hide my money.
"Nine-tenths of wisdom is being wise in time." Teddy Roosevelt.
-- Casey DeFranco (firstname.lastname@example.org), September 07, 1999.
A few months back, someone posted here "inside information" (one of those take my word for it, can't endanger my source things), that Wachovia Bank investigated purchasing Regions Bank, but backed out of the deal halfway through on the grounds that Regions' IT was so screwed up they were toast already. We were assured this was the real skinny.
Now Weiss places Regions at the top of their high-rated, financially secure list.
OK, was the inside information another scare story? Or has Weiss been fooled completely (but if so, what does the rest of their data mean?) Who should we listen to?
-- Flint (email@example.com), September 07, 1999.
I'ld tend to side with this Flint:
"The accuracy of its ratings has been favorably reviewed by the U.S. General Accounting Office (GAO) as well as national consumer organizations."
Tick... Tock... <:)=
-- Sysman (firstname.lastname@example.org), September 07, 1999.
I don't know anything about Wachovia Bank decision to purchase or not purchase Regions Bank, but in their Y2K statement they do say that:
"Ninety percent of Regions' software is supplied by outside suppliers. These vendors, companies such as Total Systems, CSC, M &I Trust, ALLTEL, ALS, Shaw Commercial and Paragon, have a vested interest in making sure that they are Year 2000 compliant."
-- Casey DeFranco (email@example.com), September 07, 1999.
I know that Weiss does studies of the insurance industry. The industry doesn't consider him that reliable, but he always seems to snag the press. He makes his money selling bad news.
It's not that I think the news is good, I just don't think Weiss has the inside skinny. Send out a couple surveys and make compliance estimates based on the answers or lack of them? C'mon. Does anyone really believe that would yield anything close to the truth?
-- Jim Smith (firstname.lastname@example.org), September 08, 1999.