S.F. Fed head expects few Y2K bank problems
SAN FRANCISCO -- More than 98% of the Federal Reserve's mission-critical systems
are now classified year 2000-compliant, and the remaining 2% should be compliant by the
end of June, according to href="http://www.frbsf.org/frbsf/newsand/whois/parry.html">Robert Parry, president
of the Federal Reserve Bank of San
In his first speech about year 2000, given before about 100 people gathered at the
Commonwealth Club of California, Parry said he is "confident" that banking services
such as automated teller machines, debit cards, credit cards, direct payments and
direct deposits will operate normally on Jan. 1, 2000.
But, he was careful to point out that "probabilities aren't certainties," and that
he "wouldn't be surprised if there were some disruptions here and there."
At one point late in the event, Parry even joked that he may stock up on extra dog
food in preparation for the rollover to 2000. Parry and his wife have three dogs.
Bonnie Allen, Parry's assistant vice president in charge of domestic banking
supervision, was on hand to address the issue of Y2K readiness at member banks and
holding companies insured by the Fed. She said that 97% are making "satisfactory
progress," and that the remaining 3% will receive a lot of attention during the next
Allen also said that Fed examiners are going to spend the second half of this year
doing follow-up examinations of all of the more than 10,000 banks that the Fed
During the second and third quarters, some of the most severe cases of Y2K
noncompliance could be made a matter of public record, she said.
Parry said his biggest Y2K-related concern related is the possibility
of "irrational" behavior on the part of consumers. But he said he was heartened by a
poll in March that found only 9% of Americans surveyed thought they would have major
problems with their finances because of Y2K. That was down from 14% last December.
"I don't think it's a good idea to take a lot of cash out of your bank and put it
under your mattress," Parry said. "Why? Because the Federal Deposit Insurance Corp.
does insure up to $100,000 of your money in the bank -- but it doesn't insure your