What do we know about the foreign exchange embargo?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
In mid-December 1999, the Federal Reserve recommended that banks refrain from foreign exchange activities between mid-December and mid-January. I think the embargo ends on Monday.
This is quite significant. For each $1 of real objects being traded in the world, there are $250 foreign change transactions. Foreign exchange transactions are much more complex than standard bank money transfers; you need the intermediate banks to accept some of the risk that the transfer goes sour.
We have heard that the largest German bank tried in early December to test its year 2000 software and mangled its records for the day. These records and transfers were restored by the end of the next day. The reports are they went back to the 1999 software for the rest of the year.
So ... where are we? Is this one more area where all the "doomers" waited on the appointed day for something to happen and nothing does? Or are there real risks? Is there anyone here who works/sleeps with/has talked with someone in a large bank who can speak about the current status of world-wide foreign exchange transactions?
The embargo has lasted for 3 weeks. I cannot imagine they can extend it much longer without causing real problems with foreign trade.
There was a thread on this forum about a meeting of the Bank of International Settlements (BIS) scheduled for tommorrow. Any news on that meeting. [The BIS is the central bank of all central banks, based in Switzerland]
This seems much more important that a few bad credit card transactions or a few lost paychecks.
-- freddy the questioner (firstname.lastname@example.org), January 09, 2000
A darn good question Freddie. Anyone got Yardeni's email address? Ed are you in touch with him? Seems to me he should have the answers.
-- Taz (Tassi123@aol.com), January 09, 2000.
This is a BIG, BIG issue. A group of experts analyzed the foreign exchange banking transaction process late last year. They cited 5 ways in which it could collapse (via y2k) and estimated a 30% chance that it would. It is so BIG that the Fed decided to shut it down for 3 weeks to permit the banks to get their houses in order. I wouldn't be surprised if they delay it further. Thanks for posting this. I wondered what was going on with the foreign exchange issue. This is one to watch closely.
-- Y2kObserver (Y2kObserver@nowhere.com), January 09, 2000.