EconSouth (Second Quarter 1999)


CURRENT ISSUE


Distinguishing Fact
From Fiction in Y2K

Sometimes you find yourself in a bad situation and wonder, "How did I get here?" I think many of us may be asking that very question when it comes to Y2K.

PB/ES

Whether we work for a business, government or a nonprofit organization, we routinely grapple with strategies, budgets, finding qualified workers and developing more efficient ways of doing business — or achieving our own career goals. We've found countless ways to use computers to speed up or improve these tasks, but until fairly recently we never gave a thought to whether these computers would read the Year 2000 as 1900. Still, here we are trying to work through a problem that is time-consuming and very expensive to fix.

Without question, the Y2K issue is serious, and if nothing were being done to fix the problem, it would have the potential to severely paralyze critical electrical, communications, transportation and financial services systems. Fortunately, this serious problem is receiving some serious attention from these and other industries worldwide.

The good news
While I can't speak for all industries or all countries, I can tell you that the U.S. banking system, including regulators and individual banks, has devoted a large amount of resources to eradicate the Y2K bug. Because of these comprehensive efforts, I believe the U.S. banking system is in good shape to enter the Year 2000. That's not to say that we won't encounter some temporary problems, but overall I believe the system will be well prepared.

How can I offer this opinion? In my work as chief operating officer of the Federal Reserve Bank of Atlanta, I have been quite involved with the Y2K preparations of our bank, the Federal Reserve System and the U.S. banking industry. Thus, my opinion on the U.S. banking system's Y2K readiness is based on facts, not fiction.

Those facts are that the Federal Reserve is committed to doing all it can to safeguard the nation's financial system and that, through our efforts and those of other banking regulators and individual banks, the U.S. banking system should be well prepared for the century rollover. You can read more about these Y2K initiatives in this issue of EconSouth.

We all have a role to play
But beyond the Federal Reserve's and the banking industry's preparations, there is a role for each of us to play in getting ready for Y2K.

If you are a business owner or government official, that role is to let the public know what steps your organization is taking in advance of the roll-over to the Year 2000. I strongly believe that public understanding of Y2K preparations, particularly in the many businesses and industries that have fully developed plans, will help to maintain public confidence, which is a critical element in successfully navigating into the Year 2000.

In addition to making your own Y2K plans, you should also find out what your bank, electrical provider, communications provider and the many other critical businesses you interact with are doing to ready themselves for the Y2K rollover. Remember that being informed is one of the first steps in being prepared.

Keeping perspective
Also, we must all maintain perspective and remember that overreaction to the Year 2000 phenomenon will simply create additional problems.

The United States has worked to meet important challenges in the past, with a lot less lead time. Y2K is simply another challenge that I believe we will meet and pass with flying colors.

By Patrick Barron, first vice president and chief operating officer of the
Federal Reserve Bank of Atlanta

Y2K READINESS DISCLOSURE

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