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After much anticipation, it seems that the "Millennium Bug" generated more buzz than bite. With the exception of a few minor glitches, the country made a remarkably smooth transition into the Year 2000. Nevertheless, some have questioned whether the time and money spent in preparation for Y2K—particularly by the banking industry—were really necessary.
I have no doubt that the outcome was well worth the expense and effort. After years of preparation, which included numerous tests of internal systems and services provided by outside vendors, both the Fed and financial institutions were able to report that they were ready for Y2K. Your hard work helped achieve our primary goals: to maintain consumer confidence in the banking industry, and, in turn, to keep cash demand at a minimum.
Here at the Fed, as I'm sure is true in your organization, we are beginning to realize additional returns on our Y2K investments. As a result of contingency planning, we now have more comprehensive documentation of our automated systems, product inventories and procedures. We also have developed new project management tools and strategies that will help us track progress and manage risks in future ventures.
There are intangible benefits, as well. The Y2K experience afforded us a unique opportunity to strengthen working relationships with other financial institution regulators and our customers. United by a common mission, the regulatory agencies demonstrated an unprecedented willingness to collaborate and share information. And through increased contact with you, our customers, we have improved existing lines of communication. We are committed to preserving this spirit of cooperation.
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Fed in Print: An index of the economic research conducted by the Fed.