Securities industry experts see few Y2k problems ("Nevertheless, 50 percent of those same managers say they would keep two to seven days worth of cash on hand...")greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
6 November 1999
Securities Industry Experts See Few Y2K Problems
(Securities experts say computers ready for date change) (1170) By Will Kramer Washington File Staff Correspondent
New York -- A recent survey of computer experts revealed that 64 out of 84 managers feel their company's critical technology will not fail or malfunction when the new millennium begins at midnight December 31.
Nevertheless, 50 percent of those same managers said they would keep two to seven days worth of cash on hand, and 32 percent said they likened the so-called Y2K problem to a natural disaster and said they had already begun to prepare.
These were some of the findings presented by Dr. Edward Yardeni to the Security Industry Association's (SIA) "Year 2000 Transition" conference in New York City on November 12.
The Y2K problem or "Y2K bug," as it is sometimes referred to, will occur when computer dating systems, which have been using only two digits in the year field of the voluminous computer code, face the transition from years starting with 19 to those starting with 20. No one really knows what is going to happen down to the last detail when the clock strikes midnight bringing in the new millennium, Y2K experts say, pointing out that the world has never experienced a millennium change with automated systems and computers. But they have mobilized to make sure that computers, especially those in government and critical industries are Y2K ready.
The SIA represents 740 international and domestic securities firms, investment banks, brokerages and mutual fund companies in an industry that generates over $3,000 million in revenues yearly in the US economy and employs more than 600,000 individuals. SIA organized its fifth and final Y2K conference November 12 to prepare the securities industry for the last phases of planning between businesses, governments and international organizations as the critical date change approaches.
The conference provided information to the financial community about the schedules of exchanges and utilities during New Year's weekend; coordination between web-based industry and government communications centers; media coverage of the securities industry during the transition; and post -2000 technology issues.
Conference organizers also stressed that it was an opportunity for businesses to share Y2K preparation strategies and help each other manage the transition.
Conference speakers presented the schedules that exchanges and utilities have worked out in order to minimize problems. They emphasized that they are taking a business-as-usual approach, yet equities, options and bond markets in New York, Boston and Chicago will close early at 1:00 p.m. on December 31.
Yardeni, an economist and strategist at Globe Investment and Deutsche Banc, used his poll to highlight the fact that the securities industry has much faith in its own planning but little in the plans of others.
"We've had a lot of testing," said Yardeni during his presentation to several hundred financial executives and managers who depend on properly functioning information technology. "But other organizations and industries haven't done end to end regressions tests - and it's the interaction of all the computers in the network that counts."
John Fitzgerald, Director of the National Securities Clearing Corporation, who spoke about Y2K planning between exchanges and utilities, was more upbeat and said that the transition weekend of 1999 to 2000 would be orderly and that he and many others had "a level of confidence without being overconfident."
Chairman of the SIA Steering Committee Arthur L. Thomas, a senior vice-president at Merrill Lynch, reported that most firms, in an attempt to minimize potential breakdowns, had not made major software changes since the beginning of October 1999. He also noted that participants in the SIA's Year 2000 program had just completed half a year of twice monthly systems testing.
While acknowledging the security industry's thorough planning, conference speakers pointed out many possible problems.
Steve Malphrus of the Federal Reserve Board said computer hackers posed a threat by using temporary blackouts or system crashes to infiltrate networks and steal information or plant viruses.
People mistaking ordinary system problems as Y2K malfunctions, or not taking technical glitches seriously was another source of trouble, according to Fitzgerald.
"The communications centers will have to be level headed," he said. "Overreaction creates problems, but under reaction can create a bigger problem."
Yardeni noted that one man's unessential component could be another's critical technology in today's world of sprawling networks. He pointed out that the securities industry may have done much advance planning, but other smaller companies with fewer resources, or firms operating abroad with less sophisticated telecommunications networks, could bring down entire systems.
Network breakdowns from abroad, according to Yardeni, could originate in both developed and developing nations because of poor infrastructure in some utilities for example, or not enough coordination between governments and business about potential Y2K problems or lack of money to fix the problems in time.
Most governments around the world have indicated they have specific Y2K agencies connected through the United Nations' International Y2K Cooperation Center. And while the Banks of England and Japan have established Y2K centers, the Securities Industry Association's Y2K initiative is unique because it is industry based and, according to Marilyn Hignett, a technology consultant with PriceWaterhouseCoopers, it was the " first project centrally managed through a website."
The SIA's main response to Y2K has been the creation of the U.S. Financial Services Coordination and Command Center (FSCCC). The center will start operating from December 20 to December 30 from 9 a.m. to 6 p.m. and remain open 24 hours a day from December 31 to January 5. The FSCCC will initially have 62 corporate volunteers and then up to 1,000 volunteers monitoring telephones and the web site during the transition weekend.
The center started registering securities companies through a web site, which will allow companies to report problems and get technical help quickly. The center will also act as an intermediary between securities firms, the Securities and Exchange Commission's Y2K center, and the President's Council on the Year 2000 Conversion headquarters.
The command center will have both public and private websites, with the public site serving as an up-to-date information resource for the public and media, while the private site will allow companies registered with the SIA to communicate about sensitive technological problems.
Yardeni's poll also revealed that 80 percent of the managers and information technology officers surveyed are required to be at work on January 1, 2000.
Nevertheless, Thomas of the National Securities Clearing Corporation admitted to reporters at the conference that Y2K would not prevent him from celebrating the new millenium with his family at one of New York's grandest hotels --- but his pager would be on all night.
And Yardeni, who conceded that the industry is really in pretty good shape, jokingly said it all probably won't matter that much, because, as countless computer experts have told him - " even on the best of days, only half of this network stuff really works anyway."
(The Washington File is a product of the Office of International Information Programs, U.S. Department of State.)
-- Homer Beanfang (Bats@inbellfry.com), November 17, 1999
" even on the best of days, only half of this network stuff really works anyway."
heh heh, heh heh... (nervous laughter all around)
-- nothere nothere (firstname.lastname@example.org), November 17, 1999.
Errrm... how many people don't keep even 2 days' money handy? Are the other 50% of these (presumably highly paid) 'experts'/'managers' scratching around in their wife's purse for a $5 bill each day?
What a joke. Or maybe the implication is that 50% (the other 50%) are keeping more than 7 days' money? This poll doesn't signify anything, especially with such a statistically insignificant sample size - except that some people have too much time on their hands!
-- Y2KGardener (email@example.com), November 17, 1999.