Y2K
Talking Point
 
Finance: 98% Blue (little risk of material disruption), 2% Amber (some risk)

Fears for some leading financial institutions have receded since the last Action 2000 report on 12 July.

Most companies are millennium compliant but in October seven medium impact firms were still classified Amber, under the Action 2000 guidelines. They have been given a target on 12 November to reach full compliance.

In July, eight large organisations were classified as "Red", meaning they faced a severe risk of material problems. One of them was identified as a "high-impact" company.

The report did not name them or say what type of organisation they were, but Action 2000 threatened to reveal their identities later in the year unless they acted fast. The Financial Services Authority said it would be wrong to publish the names at the time because it would create an artificial crisis of confidence.

Two weeks later, however, the FSA said that only two companies remained in the Red category, both of them of medium-impact size.

Michael Foot of the FSA said that if the companies failed to improve they would face sanctions such as not being allowed to accept new business, having individual accounts transferred to other firms, or even complete closure and the transfer of all business.

Despite this, seven medium impact firms remain Amber, though they expect to be compliant by 12 November.

Cash systems 'Blue'

The banks' systems for cash distribution (including cashpoint machines), credit and debit cards, and the clearing system were all declared 100% Blue in July.

Forecasts that people will withdraw extra cash for both millennium celebrations and 'just in case' the bug turns out to be more widespread than forecast, have led the Bank of England to order an extra 500m in notes for the New Year period.

The banks are also taking extra steps to make sure that all the cashpoint machines are kept filled over the period.

The government is also advising people to keep their own financial records as a back-up. Bank statements, cheque stubs and receipts from cashpoint withdrawals and credit card purchases should be retained.

Other official advice includes people checking with their employer and their banks if they have any doubts.

Investment worries

Stock markets are another area in which people's money is concerned.

It is much more difficult to assess risk in this area. A company could have all its own processes bug-free, yet be let down by a supplier. An investment fund could be fine in-house, yet it will hold stocks in hundreds of companies - some of which could be affected.

One possible consequence could be the halting of new market flotations in the autumn because investors will probably want to wait until the dust settles before considering new stocks.

Some leading investors such as Louis Bacon of the Moore Global Investments fund is one of those who fears global financial problems.

Others point out, however, that selling in fear of the bug is more likely to cause falls in the market than Y2K ever would.

The Action 2000 traffic light codes:

Blue: The assessment has not identified any risks of material disruption to the infrastructure process.

Amber: The assessment indicates that there is some risk of material disruption to infrastructure processes, but that there is an agreed containment plan to rectify shortcomings.

Red: The assessment indicates that there is a severe risk of material disruption to infrastructure processes and that timely rectification might not be possible.

Air | Banks | Broadcasting | Defence | Electrical Goods | Electricity | Fire & Rescue | Gas | Government | Health | Computers | Police | Post | Rail | Roads | Sea | Food & Retail | Telecoms | Water
Ringing in the new millennium | Witness | Speaking for the century | Millennium diaries | What happened next? | Y2k | Review of the year | Your millennium | Talking Point