Short term rates rise over concern of Y2k glitch (Japan)greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Short-term rates rise over fear of Y2K glitch
Short-term interest rates are surging as financial institutions rush to secure reserve funds ahead of Tuesday, when it is feared the first leap year day of its kind in 400 years will cause computers to malfunction.
Anticipating that Tuesday will create a surge in demand, the Bank of Japan has injected funds into the short-term money market to ensure that its ultra-easy monetary policy is not affected.
It is thought that some computer calendars may not be programmed to recognize Feb. 29 this leap year, because an extra day is not usually added if the year is divisible by 100.
However, an extra day is added if the year is also divisible by 400, as is the case in 2000 is.
Apparently concerned about a possible computer glitch Tuesday, financial institutions are trying to raise extra funds in advance.
On Friday, rates offered for two-day loans dated Monday through Wednesday jumped to around 0.2 percent from the usual rate of 0.02 percent.
On the morning of the same day, the Bank of Japan expanded the fund surplus for the first time since Jan. 17.
It supplied 600 billion yen to the banking system, leaving a surplus of 1.3 trillion yen, up from the usual 1 trillion yen.
Bank of Japan officials said the central bank would further expand the fund surplus Monday, as its previous fund supplies failed to stop a continuous surge in interest rates in the market.
Copyright 2000 The Yomiuri Shimbun
-- Homer Beanfang (Bats@inbellfry.com), February 28, 2000
YTD not much Y2K news from the banking and finance sector.
I wonder if a similar concern about 2/29/00 is/was fueling Sec Treas Summers change of position on the long bond as in continued injections of fiat liquidity.
-- Bill P (firstname.lastname@example.org), February 28, 2000.