I kinda like this 'Y2K and banking' story. There's kind of the slightest hint for the first time that they might just have a teeny-weeny problem somewhere, but then they hasten to add that it won't be their fault. Of course - we already knew that!

'you have to rely on other people not making mistakes and it's the same with banks and Y2K' - neat way of giving yourself a back-handed compliment while passing off any blame to 'other people', dontcha think?

Tuesday November 30 3:02 AM ET
Banks Around the World Set to Beat Y2K Bug
By Joe Ortiz

LONDON (Reuters) - ``It doesn't matter how good a driver you are because you have to rely on other people not making mistakes and it's the same with banks and Y2K,'' says a senior banker.

And that sums up the feeling among bankers and analysts on the global banking industry's preparedness to tackle any problems thrown up by the so-called millennium bug -- the inability of some computers to distinguish the year 2000 from 1900 because they were programmed to read years using only the last two digits.

Banks Declare Readiness Across Globe

Banks all over the world from Austria to Zambia, in both OECD and emerging market economies, have declared they are ready, having carried out both national and international tests on various systems, including international payments, to ensure they work when the date trips over to January 1, 2000.

Britain, for example has had an elaborate monitoring system for financial institutions in place for many months. This month the industry watchdog declared that 100 percent of the 144 largest financial groups were completely ready.

Tim Sweeney, Director General of the British Bankers' Association, says banks have also been talking to their customers about their readiness for two years.

``Partly because of that effort most businesses --SMEs in particular -- which were doubtful six months ago are now ready,'' he added. ``There are still some in the doubtful category and banks are continuing to review their exposure to these, but there is now little doubt that the credit crunch that was feared earlier in the year will not happen.''

``The Best Place For Your Money Is The Bank''

Across the world in Brazil banks are equally confident.

In an interview with Reuters, Wilson Gutierrez, executive director of the Brazilian Federation of Banks, said customers should not risk making large cash withdrawals on the basis that they might run out.

``The best place for your money is the bank,'' he said. ''There is no possibility that your balance is going to change between December 31 and January 1.''

Analysts say the potential for disruption in many emerging markets is less than some outsiders imagine because the majority of countries do not rely on technology as much as OECD members.

In many emerging markets, computer systems are more modern and banks do not rely on old so-called ``legacy'' systems which have cost hundreds of millions of dollars to modernize in developed countries.

``The worst case scenario is that you have banks that don't have access to liquidity,'' said Tim Love, head of global emerging markets research at SG Securities in London. ``But Y2K isn't going to affect things like loan loss provisions.''

Worry About Central Banks

Love's biggest worry was that some central banks may not be well prepared and commercial banks could suffer liquidity problems in certain countries.

Indeed, the credit rating agency Moody's has said that banking systems in countries where ownership is dominated by the public sector have been slower in addressing the Y2K issue with some exceptions such as India.

But Love said that other potential problems caused by the Y2K bug, such as communications difficulties and power failures, would probably not last long and were, in any case, already part and parcel of doing business in many countries.

``There is a possibility that delays could start a backlog in back-office settlements and that could seriously affect portfolio flows to marginal countries,'' he added.

What is certain is that commercial banks are expecting a higher than usual level of cash withdrawals from those customers who are also likely to stock up on staple foods.

Liquidity Measures In Place

Many central banks have also put in place liquidity measures which should be able to cope with a rush for cash.

The Philippine central bank said it would open an ''emergency year 2000 loan facility'' to ensure ample supplies of cash. Similar facilities have been replicated in other countries such as the United States whose Federal Reserve this month ordered the printing of an extra $50 million to meet increased demand for dollars.

The biggest headache for some banks may be their clients.

If business customers suffer cash flow difficulties from Y2K-related issues then banks could face asset quality problems though these should not be long-lived.

Caution The Watchword

Bankers say that with some countries -- Russia and Indonesia are two which are often mentioned -- caution has to be the watchword because they have had so many recent problems that Y2K almost shrinks into insignificance.

Michael Tjoajadi of PT Schroders Investment management in Jakarta sees Indonesia as one of Asia's biggest millennium risks.

``We still have money and will buy but not aggressively,'' he told Reuters. ``The risk is there...this market will be pretty quiet before the year-end.''

[ENDS]

Next, 'Henry Kissinger Comments On This Bold New Bankers' Global Peace Initiative'.

-- John Whitley (jwhitley@inforamp.net), November 30, 1999

Answers

Damn that guy is clever...

"There is no possibility that your balance is going to change between December 31 and January 1."

Of course not, because there is no point in time that exists BETWEEN December 31 and January 1.

11:59 p.m. December 31 is December 31, and 12:00 a.m. January 1, is January 1.

Time only exists either on one date or the other, THERE IS NO BETWEEN!

His lawyer must have pre-approved every word before he said it.

-- Hawk (flyin@high.again), November 30, 1999.

Do you think the bankers can that great sucking sound coming from their vaults on a daily basis. They must be scared sh*itless that the little guy is going to rain on their parade. LOL

-- y2k dave (xsdaa111@hotmail.com), November 30, 1999.

Mmm, I do believe I detect a trickle of sweat. Reminder: Action2000, the UK government Y2K scapegoat/advisory body, went so far as to say (my bold) "Your money is as safe in the bank as it's ever been". I'll just point out that it's never been safe during a bank run.

-- Colin MacDonald (roborogerborg@yahoo.com), November 30, 1999.

Your money's safe in our bank, so we'll just keep it here where it's safe. Sorry, we can't give it to you, because then it wouldn't be safe. We'll let you know when it is safe for you to have a little of it, maybe next year. Now scram, Kid, ya bother me.

I know one thing: MY money's not safe in their bank. Because it's not on their bank.

Godspeed,

-- Pinkrock (aphotonboy@aol.com), November 30, 1999.

According to some of the stuff I've read, the banks (in the U.S.) only have enough cash to cover about 1.5% of deposits on-hand. That means either 1.5% of us can get all our cash out at any time or all of us will be able to get 1.5% of our cash. Either situation will shut the banks down. I wonder, as we approach 12/31, what percentage of depositors (even among the Pollies) will go pull their cash out "just in case"? Going on the theory that 80% of the people will wait until the last minute (as they do with everything else) it might be a very interesting week between XMAS and New Years.

-- Bruce W. Roeser (broeser@ccgnv.net), November 30, 1999.

"The Best Place For Your Money Is The Bank."

Translation (courtesy of the Orwell Institute):

"The best place for YOUR money is in MY pocket."

Their propaganda might have a liiiiiiiitle more gravitas if it was coming from someone *other* than the glistening fang (with requisite glistening drop of saliva) poised to take -- and hold -- your money.

There's a reason Consumer's Reports won't accept advertising.

I'm just about ready to *stop* hearing the banksters piss and moan about how we need to trust them.

Let's hear it from an *unbiased* source for once.

Hey, what's that I just heard?

Oh, it was just a pin dropping.

-- Ron Schwarz (rs@clubvb.com.delete.this), November 30, 1999.

Only comment I have is, last week at my bank, I asked for several hundred dollars cash in specific numbers of small bills. No muss, no fuss, no questions, no hassles. Ditto over last couple of months.

-- guess (not@saying.name), November 30, 1999.

The place I contract for is kinda weird.......They pay mostly in cash! Maybe they GI more than I do!

-- Slobby Don (slobbydon@hotmail.com), November 30, 1999.

Believe me, if Y2K takes out the communications systems, the bankers won't have ANYTHING but the cash in the vault! For every twenty-four hours that system stays down, the information it contains becomes more and more useless. The bankers aren't scared of a RUN! They're scared of losing all those little bits and bytes that say you owe them umpty-dozen bucks. Dare we hope?

-- Liz Pavek (lizpavek@hotmail.com), November 30, 1999.

From what I read here a few days ago, the amount of cash that is out of "their Bank" is $50 million more than was out of "their Bank" last year at this time. Someone is getting the message. The spin isn't working on everyone.

-- thinkIcan (thinkIcan@make.it), November 30, 1999.