In his July 30 testimony before the Subcommittee on Financial Services and Technology of the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, Federal Reserve Board member Edward Kelley, Jr., promised that the FED would begin testing its systems in June, 1998. These systems in some way have to do with the FED's connection with its customers.
At the end of June, Congressmen, reporters, and bankers should ask Mr. Kelley about the status of these tests. Should he tell them that the testing process has been delayed, the questioners should become quite, um, testy. They should enquire to the point of impoliteness, and even beyond, as to why the testing has not begun. If it has begun, they syhould ask for written assessments by independent, third-party experts (that'll be the day) regarding the condition of the FED's computer-remediation project.
If the FED goes down in 2000, the world's banking system also goes down. The public should not tolerate any verbal tap dancing by FED officials from this point on. Congress should tell the FED to be clear and also tell the truth. (That'll be the day.)
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We are taking a comprehensive approach to preparedness which includes assessments of readiness, remediation, testing, and updating proven plans and techniques used during other times of operational stress in order to be prepared to address potential century data change difficulties. All Federal Reserve computer program changes, as well as system and user-acceptance testing, are scheduled to be completed by year-end 1998. Further, critical financial services systems that interface with customers will be Year 2000 ready by mid-1998, permitting approximately 18 months for customer testing. . . .
The testing effort for Year 2000 readiness within the Federal Reserve will be extensive and complex. Industry experts estimate that testing for readiness will consume about half of total Year 2000 project resources. To leverage existing resources and processes, we are modeling our Year 2000 testing, both internally and with depository institutions, on proven testing methods and processes. Our customers are already familiar with these processes and testing environment. We will finalize and distribute our testing strategy to depository institutions by the end of September this year and begin coordinating test schedules January 1998. As I noted earlier, the Reserve Banks are targeting June 1998 to commence testing with their customers, which allows an 18-month time period for depository institutions to test their systems with the Federal Reserve.