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A man who advises the Federal Reserve System says that 10% of U.S. banks will not make the deadline. 90% will make it and remain open. Michael Curtiss is an optimist. He is selling a manual on how banks can fix the y2k repair project -- a manual based on no example, since no bank has yet to fix it.
He does not say what percentage of the
software vendors that supply 80% of U.S. banks with their software will not make it.
He does not say what percentage credit unions and savings & loans will not make it.
He does not say how many foreign banks with whom the surviving 90% share computer data will not make it.
He does not say how compliant banks (not one exists today) will be able to
lock out corrupt data from noncompliant banks in 2000 without collapsing the fractional reserve banking system.
He does not say how the banking system can avoid the bank runs that will begin when even a small percentage of depositors figures out why the missing information not covered in this report points to a collapse.
Other than this, it's an optimistic report.
This is from Westergfaard's site. John Mauldin gives the summary. (John is co-owner of the repair manual. He is also co-owner of REMNANT REVIEW, my newsletter. John has got his bets covered -- unless the banks go down.)
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1. 90% of the banks doing business today will still be doing business (at least critical mission systems) as we approach and pass through January 1, 2000.
2. The ability to write checks and to deposit them will still exist, even though it may take additional time for the checks to "settle."
3. The Federal Reserve will be OK. While far from perfect, Michael is confident the Fed's Y2K renovations will allow it to remain open and functional as we approach and pass through 2000.
4. The biggest problem facing the banks are loans made to customers that will be hurt or bankrupted by the Y2K Problem, which could severely impact the banks' capital situation and their ability to make loans.
5. The ability to transfer money internationally may be seriously impaired. Delayed settlement is very likely, and other more severe problems are possible.
6. Most banks will not have all their Y2K problems fixed in time and will focus on their mission critical systems. This means there will be problems and delays for customers, but the vast majority of banks (90% or more in his opinion) will remain open and functioning.
7. There are about 10% of banks which he currently feels are at risk. Most of these are smaller banks and/or those that have not begun to address their Y2K related problems. In particular, those banks, which are just now beginning to develop Y2K plans, could be in serious trouble. Regulators will force those not adequately dealing with the problem to merge or be taken over by compliant banks in order to protect the customers, or in some cases, shut down.
8. Michael believes there will be plenty of banks which will be Y2K compliant, at least in their mission critical systems, where we can be comfortable leaving our money as we approach 2000.
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