Elizabeth McCaul is Acting Superintendent of Banks for New York State, and let me assure you, she puts on a very good act! The NEW YORK TIMES (Feb. 8) published a Letter to the Editor from her. It appeared in the newspaper's Money & Business section.
She assured readers that all banks in the state of New York will be finished with their repairs by . . . come on, you know the date -- that's right: December, 1998. Why? Come on, come on . . . that's right:. to leave a year for testing.
The whole world is promising the same thing. Too bad that there isn't enough computer capacity to run the parallel testing that is mandatory for accurate tests.
You were expecting maybe an admission that no bank in the state (or the nation or the world) is 2000-compliant today, that hardly any of them can get compliant by 2000, and that the banking system will collapse in late 1999 due to bank runs or in 2000 due to failed computers? And then a grand finale: "Sorry About that"?
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I want to assure customers of New York State-chartered banks (which include some of the largest banks in the country) that the state Banking Department, working in close cooperation with Federal bank regulators, is reviewing banks' plans to determine whether they are making adequate preparations. It is also worth pointing out that all New York-chartered banks are insured by the Federal Deposit Insurance Corporation, and many are members of the Federal Reserve System.
We have found that most banks are making good headway in this area. While much remains to be done, we expect that New York's banks will have largely completed the renovation of their systems by the end of 1998, leaving a full year for final validation and testing. . . .
Since its founding in 1851, the Banking Department has successfully overseen the transitions necessary to keep pace with one of the nation's most dynamic industries. Our year 2000 efforts are in keeping with that tradition.