The U.S. banking regulatory bureaucrats are telling bankers to find out if their clients are y2k-compliant. This is supposed to be an important aspect of the system-wide solving of the problem. It is, on the contrary, an utterly useless policy.
The same strategy is offered to big firms with lots of suppliers and lots of software vendors. It won't work.
Here's why: nobody is going to answer the surveys. Why should they? There are no meaningful sanctions for not answering. Can Citicorp call in 100% of its corporate loans? Of course not. Can GM fire all 85,000 of its suppliers for not filling out a questionaire? Of course not.
The big firms aren't responding either, as this report shows.
This is from the London SUNDAY TIMES (April 19).
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THE attempt by JP Morgan Investment Management to discover whether 600 companies in which it has invested have solved the millennium bug has stalled.
Many of the larger companies have refused to give guarantees that they will not be affected by the computer bug. Many of them, including British Telecommunications, took legal advice. They were told that JP Morgan could sue companies if they gave guarantees and then failed to live up to them.
JP Morgan sent its questionnaire to European companies earlier this month and had planned to draw a direct link between the written responses and its investment decisions. . . .
A spokesman for BT, which is investing about £300m in solving the computer bug, said: "It is impossible to give such guarantees. While we are sure we have the problem under control and that our customers will not experience problems come the millennium we, or any other company, would be unwise to give a cast-iron promise that every minute detail will be compliant."
Another FTSE 100 index executive said the idea of giving a guarantee that his company would be entirely immune to the millennium bomb was madness.
"You can't guarantee that the sun will come up tomorrow. This is still 20 months off and many companies are still struggling to solve the bug. To ask many top companies to say they will not be affected is just unworkable. Our lawyers have simply told us not to do any such thing," he said.