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Chairman Robert Bennett of the Subcommittee on Financial Institutions of the Senate Banking Committee made this statement on July 10:
"The financial services industry is particularly susceptible to the Year 2000 problem. The industry uses computers to calculate interest and mortgage payments, process stock trades, and access account information. Without reliable systems to do this work, interest could be miscalculated, stock trades could vanish, and customers could have difficulty accessing their account balances or their credit cards. The financial services industry must also recognize that the Year 2000 problem presents business risks that go far beyond the task of correcting their own systems. The financial services industry is so interconnected that systems failures by other businesses, including their customers and vendors, could present significant business risks. Banks could incur significant credit risk if their borrowers' systems fail. Securities firms could fail to execute trades as a result of a flaw in a counterparty's system.
"The financial services industry must also deal with perception risk. Even if all the computer systems are in working order by the end of 1999, consumers may feel threatened by the uncertainty associated with the date change. This could result in excess withdrawals from financial institutions or a sell-off on Wall Street. Consequently, the financial services industry must work to develop a comprehensive remediation and testing effort to convince consumers of the integrity of the system."
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