|Year 2000 Bug|
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LONDON Will the dawning of the year 2000 bring financial chaos? Banking industry regulators do not go in for scare-mongering. But with a few carefully chosen words, Michael Foot has sent shock waves reverberating round the City [London financial district] and sent savers scurrying for safety.
The quiet, bespectacled man from the Financial Services Authority admitted that 12 large financial institutions are so far behind with their preparations to cope with the millennium bug that they could pose a serious risk to their customers and the markets. He is so worried by their potential to do damage that he is threatening to close them down.
Until now, the Bank of England has insisted that Britains financial institutions were coping with the bug. That is what the institutions themselves maintained. Now it is clear that the truth is very different. And so intertwined are the various financial institutions that if one fails, the entire system may be put at risk. "The financial industry is like a house of cards," shuddered one insider. "If one business founders, the others feel it."
Suddenly, those individuals who have insisted that they will be withdrawing all their cash from the bank before the end of the year do not seem quite so misguided. The prospect of the millennium bug eating your savings may be more than just the nightmare of overactive imaginations. At a high-powered millennium meeting in Washington recently, delegates were stunned to hear Henry Kissinger announce that he intended to withdraw all his money from the bank as 2000 nears. Mr. Foots statement this week has fuelled fears that lesser mortals will follow the former U.S. Secretary of States lead, precipitating a dangerous run on the banks.
Robin Guenier, the man whom the last Government first asked to help the country to cope with the bug, was widely derided as the Cassandra of the millennium because of the dreadful picture he painted of national chaos. Now his predictions are coming dangerously close to being borne out. He says: "If the financial services industry is leading Britain, then that does not say much for the rest. And if Britain is leading the world, then heaven help us."
With a handful of exceptions led by Mexico and Chile, Latin American governments were late in grasping the severity of the "millennium bug." They now realize they lack the time, money and programmers to forestall potentially crippling public sector failures when 2000 arrives.
World Bank experts and independent analysts say Latin and Caribbean governments can now do little more than focus on preventing disasters brought on by the Y2K problem.
"I don't want to be an alarmist, but we do want to prepare the people for reasonable precautions. There could be a run on banks, real bad, and declared bank holidays," said Jim Cassell, research director for the information technology analysts GartnerGroup who has worked extensively in the region.
Gartner analysts predict half of all Latin American companies and state agencies will see at least one critical failure--from power outages to air transport interruptions--in Argentina, Colombia, the Dominican Republic, Guatemala, Jamaica, Panama, Puerto Rico and Venezuela. Even worse off are Costa Rica, Ecuador, El Salvador and Uruguay, they say.
Social unrest and paralyzed commerce are tangible fears. In this part of the world, "the public doesn't protest with phone calls and letters--it riots and destabilizes the government. There's lots of potential for that," said Ian Hugo, deputy director of Britain's industry-backed Taskforce2000.
"We're going to have a food-supply shortage," predicts Alejandro Bermudez, the Venezuelan government's information systems manager. He estimates 40 percent of Venezuela's food-processing plants will be paralyzed when unfixed computer chips in automated factories shut down production lines.
Only about 10 percent of Venezuela's electricity distribution system has so far undergone computer fixes, and the government says the country desperately needs $1.5 billion for Y2K fixes, adding that even with that money, repairs will take two to four years.
The just-released quarterly report of the North American Electric Reliability Council says that "one-third of US nuclear plants will not be finished with Y2K repairs in time to meet the industry's self-imposed summer deadline." Of the 66 operating nuclear facilities, 20 said that they will need extra time to rid their computer systems of Year 2000 glitches. Some nuclear plants have chosen to wait until after 30 June to fix systems during regular maintenance cycles, and industry officials predict that all repairs will be done well in advance of 1 January 2000. NERC, a trade association for the US and Canadian electric industry, says interruptions of electric service due to Y2K appear unlikely. But the group also says hospitals; telephone companies; and gas, water, and sewage facilities should review their emergency power supply provisions and procedures.
The U.S. State Department has said it may issue travel warnings and draw up evacuation plans for Americans living abroad should the year 2000 computer bug cause widespread problems. The contingency plans may be needed to keep Americans on foreign soil safe since many other nations are nowhere near ready for the change to the year 2000.
In Main recently a move was made in the state's legislature to introduce legislation to distribute 200 pounds of beans and rice to each state resident. State legislator Belinda Gerry has proposed the allocation of $50 million to develop a 13-million-cubic-foot food store that would feed every Maine resident for months. Although the measure has met with opposition, the proposal is being taken seriously. "At current wholesale prices of $20 per hundred pounds, the rice and beans would fill about 5,600 tractor-trailer trucks. If dumped on a football field, the pile would stretch to 36 stories and weigh 124,000 tons." Alaskan legislators have considered similar plans.
Preparations have been made in Ohio for state officials to relocate government operations into "The Bunker" in December in the event of a Y2K crisis as a result of the millennium computer bug problem. The bunker is a $13 million concrete structure eight miles northwest of downtown Columbus that would house Ohio's "Emergency Operations Center." The report said that the center would be staffed 12 hours a day on Dec. 29 and 24 hours a day after Dec. 31 indefinitely. Los Angeles has a similar Emergency Operations Center and is staffing the facility at the end of the year to deal with Y2K disruptions.
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|Articles on this Page
The year 2000 looms and all is not well
Latin America lags in Y2K readiness
U.S. Nuclear Power plants not yet Y2K compliant
US considers plans for Y2K foreign evacuation
State of Maine may stockpile food for Y2K
Ohio officials may govern state from bunker in a Y2K crisis
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