The Year 2000 computer bugs will not cause a global recession, Roger W. Ferguson, a governor of the Federal Reserve Board, reassured attendees of a meeting of the National Automated Clearing House Association held in Atlanta last week.
But he added in his remarks at the Marriott Marquis downtown, “Given the sheer number of computers and chip-based systems, and the manual nature of the fixes that have emerged to date, we are likely to experience some degree of disruption.”
Dr. Ferguson is one of five current members on the board besides its chairman Alan Greenspan.
As chairman of the Joint Year 2000 Council, an organization made up of the leading international banking institutions worldwide, he has as good an overview of the Y2K problem as anyone on the globe. He said that he already has visited with banking regulators from Europe, Asia-Pacific, North and South America and the Caribbean, Africa, and the Middle East to promote “international readiness.”
And while he hoped that the potential Y2K crisis would pass with the same “non-event” status in the eyes of the public and the media as the euro conversion did, he did foresee some disruptions.
“…nothing this large and complex can be perfectly faultless,” he added. “We should remember, however, that there have been serious disruptions to service in daily life before, from storms, temporary power outages, disruptions of telephone service, etc. In general, these prove to be annoying and incovenient, but nothing more.”
He advised that all financial institutions should follow the Federal Reserve’s lead of undertaking an aggressive public relations program explaining the preparations, risk reductions and contingency planning they have undertaken.
Dr. Ferguson’s speech may be read on the board’s web site at http://www.bog.frb.fed.us