When the financial press begins to speak of y2k as a potential disaster, time is running out. Depositors are shrugging this off for now. The time will come when stories like this one will fuel a banking panic.
This appeared in the San Jose BUSINESS JOURNAL (Jan. 12).
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Banks are scrambling to resolve the so-called Year 2000 problem before midnight Dec. 31, 1999, or risk unprecedented disaster. . . .
Banks are particularly susceptible to the problem because of all the date-sensitive data their computers store.
The discrepancy can affect rate calculations, loan expiration dates, automatic debits and credits, and a host of other functions.
And while large banks have information-processing teams to work on the problem, community banks depend on their software vendors and in-house systems managers to sort through possibly millions of lines of code to find the troublesome discrepancies. . . .
A bank's main computer system can be up to date and still be brought to a standstill by vendor or customer computers that aren't in Year 2000 compliance.
"If customers' shipping and order dates are out of whack, it could have a huge impact on their business, which would affect their ability to repay loans," said John Stafford, vice president of communications for the California Bankers Association. . . .
For protection, many banks are requiring vendors and customers to sign agreements stating their software is Year 2000 compliant.
These letters are being drafted by attorneys, who represent the one industry guaranteed to benefit from the whole mess.
"The legal industry is jumping in head-first," Mr. Haroutunian said. "There are going to be a lot of legal battles in the year 2000."