Will the country's banking system be ready for Y2K?
No one can say there won't be glitches, but the Fed expects the banking industry to be ready for the century rollover. The financial industry has been preparing for Y2K by replacing or renovating computers and undergoing rigorous testing of applications. Many outside experts and Congress consider the financial industry superbly prepared for the Year 2000 conversion.
What kind of testing is being done with financial institutions?
The Fed is doing two things—testing its own systems and requiring some 10,000 financial institutions to test their critical payments interconnections with the Fed. To date, more than 95 percent of the Fed's internal systems and 98 percent of its mission-critical systems have been renovated or replaced and are Y2K compliant. These systems are now in daily use. Additionally, as of March 31, 1999, more than 7,000 financial institutions had tested their systems with the Federal Reserve.
How else is the Fed preparing for Y2K?
The Fed, along with other banking regulators, is conducting examinations focused specifically on the Y2K readiness of financial institutions. Through March 31, 1999, these institutions have been examined twice, and the overwhelming majority have been found to be making satisfactory progress. Of the 1,500 institutions supervised by the Fed, our reviews have found 95 percent to be making satisfactory progress in their Y2K programs. Those institutions that have not made satisfactory progress are under an intensive monitoring program until they make satisfactory progress.
Should I take any precautions to prepare for Y2K?
The Federal Reserve does not see any reason for the public to hold a lot of cash in the early days of 2000. Although there may be isolated glitches, we expect the usual payments options, such as ATMs, credit cards, checks, debit cards, etc., to work. Additionally, FDIC insurance, which covers deposits up to $100,000, will not be affected by Y2K.
For more information on Y2K readiness, visit the Federal Reserve Board of Governors web site (www.federalreserve.gov), or call the toll-free consumer Y2K information line at 1-(888)-USA-4Y2K.
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