Mr. Kelley discusses the Year 2000 issue  (Central Bank Articles and Speeches, 28 Apr 98)
Central bank: fed | Type: speech | Date: 1998-04-28

Mr. Kelley discusses the Year 2000 issue Testimony of Mr. Edward W.

Kelley, Jr., a member of the Board of Governors of the US Federal Res System, before the Committee on Commerce, Science, and Transportation at the US Sen on 28/4/98.I am pleased to appear before the Committee today to discuss the Year 2 computer systems issue and the Federal Reserve's efforts to address it.

The stakes are nothing less than the preservation of a safe and sound financial system that can c operate in an orderly manner when the clock rolls over at midnight on New Year's Eve a millennium arrives.

So much has been written about the difficulties ascribed to the challenge that by now almost everyone is familiar with the basic issue - specific information generated by computers may be inaccurate or that programs may be termin because they cannot process Year 2000 dates.

The Federal Reserve System has developed executing a comprehensive plan to ensure its own Year 2000 readiness, and the bank supe function is well along in a cooperative, interagency effort, to promote timely remed testing by the banking industry.

This morning I shall first focus on the potential mac consequences of the Year 2000 issue.

Then I shall discuss actions being taken by th Reserve System to address its internal systems, including Reserve Bank testing with de institutions, and its bank supervision efforts.

## The Macroeconomic Effects of the Millennium BugThe Year 2000 ('Y2K') problem will touch much more than just our financi system

and could temporarily have adverse effects on the performance of the overa economy as well as the economies of many, or all, other nations if it is not corre spectrum of possible outcomes is broad, for the truth of the matter is that this episo We have no previous experiences to give us adequate guideposts.

A few economists alrea suggesting that Y2K-related disruptions will induce a deep recession in the year 2000 probably a stretch, but I do not think that we shall escape unaffected.

Some of frightening scenarios are not without a certain plausibility, if this challenge were b But it is not being ignored.

While it is probable that preparations may in some instan be inadequate or ineffective, an enormous amount of work is being done in anticipatio rollover of the millennium.

It is impossible today to forecast the impact of this ev range of possibilities runs from minimal to extremely serious.

In that spirit, let me you some of the ways in which the millennium bug already is influencing the US economy discuss some of the possible outcomes for economic activity early in the next century.Corporate business is spending vast amounts of money to tackle the Y problem.

To try to get a handle on the magnitude of these Y2K expenditures, we have r the most recent 10-K reports filed with the SEC by approximately 95 percent of the fir Fortune 500.

These are the largest businesses in our economy, with revenues of $5½ trillion annually, and are likely to be on the cutting edge of efforts to de millennium bug.

Before the end of the decade, these firms report that they expect to s $11 billion in dealing with the Y2K problem.

(Of this total, financial corporations a expenditures of $3½ billion, while companies in the nonfinancial sector have budgeted around $7½ billion.)These estimates undoubtably understate the magnitude of the Y2K reprogramming efforts.

In culling through the 10-K reports, we found that many comreported incurring no additional costs associated with Y2K remediation efforts.

I d firms are unaware of the problem.

Rather, I suspect that some firms did not view t spending as having a 'material' effect on their bottom line, and some companies probab funded Y2K programs with monies already budgeted to their information technology funct Making an allowance for all costs - whether explicitly stated or not - and recognizing Fortune 500 firms are only part of the picture, an educated guess of the sunk cost remedial efforts in the US private sector might be roughly $50 billion.

To put this n perspective, the Gartner Group has estimated that Y2K remediation efforts will total $600 billion on a worldwide basis.

The US economy accounts for about one-fifth of output, and thus our estimate seems broadly consistent with the lower end of their ran the experience of our own Y2K efforts to date, I would expect to see costs rise furth these Y2K programs are fully under way - ultimately pushing costs up within the Gartner range.Corporate efforts to deal with the Y2K problem are affecting economic activ a variety of ways.

On the positive side, an important element in some Y2K programs replacement of aging computer systems with modern, state-of-the-art hardware and sof Such capital expenditures - which I should note are not included in the $50 billion cos will raise the level of productivity in those enterprises, and, in general, the need Y2K problem has increased the awareness on the part of senior executives of the com and importance of managing corporate information technology resources.

The incr replacement demand also has contributed to the spectacular growth recently in this c computer hardware and software industries - a process that I would expect to contin while longer.

But, ultimately, we are largely shifting the timing of these i expenditures:

Today's added growth is likely 'borrowed' from spending at some time future.

And, if analyzing the dynamics of this situation were not already complicate some firms may 'freeze' their systems in the middle of 1999 - effectively forgo installation of new hardware and software systems just before the millennium.

This, t influence spending on computer equipment - shifting some of it from 1999 into 2000.While Year 2000 remediation efforts may give a temporary boost to econom activity in some sectors, the net effect probably is negative.

I suspect the majo expenditures should be viewed as increased outlays for maintenance of existing systems are additional costs on businesses.

Other than the very valuable ability to maintain i into the year 2000, few quantifiable benefits accrue to the firm - and overall produc are reduced by the extra hours devoted to reprogramming and testing.

Conservative es suggest that the net effect of Y2K remediation efforts might shave a tenth or two a y growth of our nation's overall labor productivity, and a more substantial effect is some of the larger estimates of Y2K costs are used in these calculations.

The effec gross domestic product are likely to be somewhat smaller than this but could still tota a percentage point or so a year over the next two years.The United States is not alone in working to deal with the millennium Efforts by our major trading partners also are under way, although in many cases they are not yet at so advanced a stage as in this country.

In Europe, the need to reprogra systems to handle the conversion to the euro seems to have taken precedence over Y2K e although there may be efficiencies in dealing with the two problems at once.

The difficulties of Japan and other Asian economies certainly have diverted attention and in those countries from the Y2K problem, increasing the risk of a Y2K shock from one o of these countries.

But, on the positive side, large multinational corporations are a of the Y2K problem, and their remediation efforts are independent of national boundarie˝also are anecdotal reports that many of these companies are extending their influ demanding that their extensive networks of smaller suppliers prepare themselves as a of maintaining their business relationship.Obviously, a great deal of work either is planned or is under way to deal Year 2000 problem.

But what if something slips through the cracks, and we experien failure of some 'mission critical' systems?

How will a computer failure in one indus the ability of other industries to continue to operate smoothly?

The number of possibl of this type is endless, and today no one can say with any confidence how severe a disruptions could be or how a failure in one sector would influence activity in others.We have many examples of how economic activity was affected by disruptions the physical infrastructure of this country.

Although the Y2K problem clearly is uniqu these disruptions to our physical infrastructure may be useful in organizing our thin the consequences of short-lived interruptions in our information infrastructure.

In e major winter storm paralyzed large portions of the country.

Commerce ground to a halt a week in some areas but activity bounced back rapidly once the roads were cleared Although individual firms and households were adversely affected by these disruptions aggregate, the economy quickly recovered most of the output lost due to the storm. instance, the shock to our physical infrastructure was transitory in nature, and, c recovery process was under way before any adverse 'feedback' effects were produced. summer's strike by workers at the United Parcel Service is a second example.

UPS is player in the package delivery industry in this country, and the strike disrupted t patterns of many businesses.

Some sales were lost, but in many instances alternative services were found for high-priority packages.

Some businesses were hurt by the stri effect on economic activity was small in the aggregate.

Hopefully, any Y2K shock information infrastructure would also be transitory and would share the characteristi shocks to our physical infrastructure.What can monetary policy do to offset any macroeconomic effects?

The trut answer is 'not much'.

Just as we were not able to plow the streets in 1996 or delive in 1997, the central bank will be unable to reprogram the nation's computers for the y The Y2K problem is primarily an issue affecting the aggregate 'supply' side of the e whereas the Federal Reserve's monetary policy works mainly on aggregate 'demand'.

We understand how creating more money and lowering the level of short-term interest rates boost to interest-sensitive sectors (such as homebuilding), but these tools are unlike effective in generating more Y2K remediation efforts or accelerating the recovery pro company experiences some type of Year 2000 disruption.

We will, of course, be ready if want to hold more cash on New Year's Eve 1999, and we will be prepared to lend to fin institutions through the discount window under appropriate circumstances or to provide reserves to the banking system.

But there is nothing monetary policy can do to offset effects of a severe Y2K disruption.

As a result, our Year 2000 focus has been in areas can make a difference: conforming our own systems, overseeing the preparations of the industry, preparing the payments system, and contingency planning.

Additionally, we a all we can to increase awareness of this problem and to energize preparations both her and in other parts of the world.

## Background on Federal Reserve Year 2000 PreparationsThe

Federal Reserve operates several payments applications that process settle payments and securities transactions between depository institutions in the Uni˝These systems are critical national utility services, moving funds much as the natio grid moves electricity.

Fedwire is a large-value payments mechanism for US dollar in funds transfers and US government securities transfers primarily used by depository in and government agencies.

These applications, as well as the supporting accounting syst other payment applications such as the Automated Clearing House (ACH), run on mainfr computer systems operated by Federal Reserve Automation Services (FRAS), the inte organizational unit that processes applications on behalf of the Federal Reserve B operates the Federal Reserve's national communications network.The Reserve Banks also operate check processing systems that provide ch services to depository institutions and the US government.

In addition to ce applications on the mainframe, the Reserve Banks operate a range of applications in a d computing environment, supporting business functions such as currency distribution, supervision and regulation, research, public information, and human resources.

The sco Federal Reserve's Year 2000 activities includes remediation of all of these pr environments and the supporting telecommunications network, called FEDNET.

Our Year 20 preparations also address our computerized environmental and facilities management sy such as power, heating and cooling, voice communications, elevators, and vaults.

## Year 2000 Readiness of Internal SystemsThe Federal Reserve is giving the Year 2000 its highest priority, consiste our goal of maintaining the stability of the nation's financial markets and payments preserving

public confidence, and supporting reliable government operations.

The Reserve completed assessment of its applications in 1997; our most significant applicat been renovated; and internal testing is underway using dedicated Y2K computer system date-simulation tools.

Changes to mission critical computer programs, as well as sy user-acceptance testing, are on schedule to be completed by year-end 1998.

Further, supporting the delivery of critical financial services that interface with the deposito will be Year 2000 ready by this July and a depository institution test program will be that time.

This schedule will permit approximately 18 months for customer testing, to are dedicating considerable support resources.Our Y2K project is being closely coordinated among the Reserve Banks, t Board of Governors, numerous vendors and service providers, approximately 13,000 custo and government agencies.

We are stressing effective, consistent, and timely communi both internal and external, to promote awareness and commitment at all levels of o organization and the financial services industry, more generally.A significant challenge in meeting our Y2K readiness objectives is our reli commercial hardware and software products and services.

Much of our information proce and communications infrastructure, as well as our administrative functions and other op is composed of hardware and software products from third-party vendors.

As a result, coordinate with numerous vendors and manufacturers to ensure that all of our har software, and services are Year 2000 ready.

In many cases, compliance requires upgrad in some cases, replacing, equipment and software.

We have a complete inventory of components used in our mainframe, telecommunications, and distributed computi environments, and vendor coordination and system change are progressing well.

We particularly sensitive to telecommunications, an essential infrastructure element in o maintain a satisfactorily high level of financial and business services.

We have bee with our financial institutions and our telecommunications servicers to find ways to˝preparations and testing programs that will ensure Y2K readiness.

Nonetheless, this that many financial institutions regard as needing attention.

We strongly support program to draw increased attention to the Y2K issue and the progress of telecommunications companies in the United States.

## Oversight of Banking Industry PreparationsUltimately,

the boards of directors and senior management of banks and o financial institutions must shoulder the responsibility for ensuring that the inst manage are able to provide high quality and continuous services beginning on the first day in January of the Year 2000 and beyond.

This critical obligation must be among highest of priorities for bank management and boards of directors.

Nevertheles supervisors can provide guidance, encouragement, and strong incentives to the banking to address this challenge.

Accordingly, the Federal Reserve and the other banking su that make up the Federal Financial Institutions Examination Council, the FFIEC, hav working closely to orchestrate a uniform supervisory approach to supervising the industry's efforts to ensure its readiness.

Detailed information about our supervisory attached as an Addendum to this testimony and is readily available on a web site maint the Federal Reserve on behalf of these agencies.

## Preparing the Payments SystemsIn order to ensure the readiness of the payments system, the Federal Reser prepared a special central environment for the testing of high-risk dates, such as th the Year 2000 and leap year.

Testing will be conducted through a combination of futur our computer systems to verify the readiness of our infrastructure, and testing cri dates within interfaces to other institutions.

Internal testing is expected to be comp and external testing with customers and other counterparties will then commence and c throughout 1999.

Network communications components are also being tested and certifie special test lab environment.

We have published a detailed schedule of testing opport Fedwire, ACH transactions and other services provided by the Federal Reserve.

Ou environments have been configured to provide flexible and nearly continuous acce customers.

The Reserve Banks are implementing processes to identify which depositorie tested with us, so that we may follow up on any laggards.We are also researching, in conjunction with our counterparties, the bene Y2K testing that would span the entire business process.

As part of this effort, Reserve is coordinating with the Clearing House for Interbank Payment Systems (CHIPS) the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to provide common test day for customers of all three systems on September 26, 1998.

The New Clearing House is coordinating an effort to establish common global test dates among funds transfer systems during April and May 1999.We are also coordinating with the international community of financial regu to help mobilize global preparations more generally.

These efforts are discussed mor the Addendum.

In particular, through the auspices of the Bank for International Set international regulators for banking, securities, and insurance along with global specialists recently jointly hosted a Year 2000 Round Table, which was attended by countries.

A Joint Council was formed that will promote readiness and serve as a globa house on Year 2000 issues.

In the final analysis, however, the regulatory community re that it cannot solve the problem for the financial industry.

Every financial inst˝complete its own program and thoroughly test its applications with counterparties and c if problems are to be avoided.

## Contingency PlanningDespite our intensive efforts to prepare our computer systems, we must also plans for dealing with problems that might occur at the Year 2000 rollover.

As you k Federal Reserve has been involved in contingency planning and has dealt with various emergencies for many years.

In response to past disasters we worked closely with the financial institutions to ensure that adequate supplies of cash were available to the and that backup systems supported our operations without interruption during the cris These efforts primarily focused on the orderly resumption of business operations resul hardware failures or processing-site problems.

In addition to disruptions to ha processing sites, Y2K contingency planning must be directed at potential software fai interdependency problems with financial and non-financial counterparties.

Within this business resumption is made more difficult because we cannot fall back to an earlier ve software package as this version itself may not have been readied for the Year 200 disruptions to utility services or depository institutions can also directly affec Reserve's ability to conduct business.

So, in order to plan for the continuity of ser be necessary to consider available alternate ways to provide services if a Year 2000 identified.The Federal Reserve has formed a task force to address the contingency read of our payments applications.

Although we have no grounds for anticipating that failures could occur and we cannot act as an operational backstop for the nation's industry, we view it as our responsibility to take action to ensure that we are as we as possible to address major failures should they occur.

We are currently focu contingency planning for external Y2K-related disruptions, such as those affectin companies, telecommunications providers, large banks, and difficulties abroad that a markets or institutions.

The Federal Reserve has established higher standards fo institutions that serve as the backbone for the transactions that support dome international financial markets and whose failure could pose a systemic risk to the system.We recognize that, despite their best efforts, some depository instituti experience operating difficulties, either as a result of their own computer problems their customers, counterparties, or others.

These problems could be manifested in a ways and could involve temporary funding difficulties.

The Federal Reserve plans prepared to provide information to depository institutions on the balances in their ac us throughout the day, so that they can identify shortfalls and seek funding in the m System will also be prepared to lend in appropriate circumstances and with adequate col depository institutions when market sources of funding are not reasonably available.Our preparations for possible liquidity difficulties extend as well to th bank branches and agencies in the US that may be adversely affected directly by th computer systems or through difficulties caused by the linkage and dependence on thei bank.

Such circumstances would necessitate coordination with the home country super Moreover, consistent with current policy, foreign central banks will be expected to liquidity support to any of their banking organizations that experience a funding short

## Closing RemarksBIS Review

37/1998˝To sum up, the macroeconomic effects of Year 2000 preparations are qu complex.

As I have discussed, some industries may benefit in the near term from increa associated with the accelerated pace of replacement of obsolete computer systems, a customers presumably will have more productive systems in place sooner than might othe have been the case.

But, in the aggregate, preparing for the Y2K problem is likely slight drag on the US economy.

The Y2K problem, in effect, raises the rate of deprec the nation's stock of plant and equipment.

It forces businesses to devote a programming resources simply to maintain the existing flow of services from its computeAs a provider of financial services to the economy, we are on schedule wi own internal remediation efforts and will shortly begin testing our interfaces with institutions.

While we have made significant progress in our Year 2000 preparati challenge now is to ensure that our efforts remain on schedule and that problems are ad a timely fashion.

In particular, we shall be paying special attention to the test depository institutions and the financial industry and are prepared to adjust our suppo as required by experience.As a bank supervisor, the Federal Reserve will continue to address the fi services industry's preparedness, monitor progress, and target for special supervisor those institutions that are most in need of assistance.

In addition, we shall tr progress of external vendors and critical infrastructure suppliers, such as telecomm and electrical power utilities.The problems presented to the world by the potential for computer failures millennium arrives are real and serious.

Because these problems are unique to our expe many ways, and because the impact of computer-driven systems has become so ubiquitous, event is unlikely to be trouble free.

While we can't predict with any certainty, there potential for problems to develop, but these need not be traumatic if we all do o preparation.

As the world's largest economy, the heaviest burden of preparation fal United States.

But it is truly a worldwide issue and, to the extent that some are no prepared and experience breakdowns of unforeseeable dimension, we shall all be af accordingly.

There is much work to be done.

We intend to do our utmost, and hope an that others will do likewise.In this spirit, Mr. Chairman, I want to commend the Committee for invitin panel to testify together on Y2K issues.

This is the first time that the Board has te representatives of the Departments of Commerce and Transportation, and the FCC.

Th wholly appropriate because our success in preparing for the millennium will ultimatel very much on one another's efforts.

## Addendum:

Supervisory Elements of the Federal Reserve's Year 2000 Preparations

## 1.

Interagency Statements and Other GuidanceThe Federal Financial Institutions Examination Council(FFIEC) - composed the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Compt the Currency, the Office of Thrift Supervision, and the National Credit Union Adminis has issued a series of six advisory statements since June 1996, including statemen˝Year 2000 effect on computers, project management, business risk, readiness of s providers, guidance to address customer risk, and testing for readiness.

An adv contingency planning is being prepared.

As a result of these advisory statements, the awareness and the extent of its remediation efforts have significantly increased over t years.

The FFIEC is considering additional guidance to financial institutions on the d of customer awareness programs and the need to communicate with and address question retail customers regarding Year 2000 issues.

## 2.

Supervisory ReviewsIn May 1997, the banking agencies committed to conduct a supervisory review June 30, 1998, of all insured depositories to assess the state of their Y2K readiness. reviews and examinations will continue throughout 1999.

Through March 31, 1998, the F Reserve has conducted reviews of approximately 1,100 organizations.

The Federal Reserv the other agencies appear to be on schedule to meet their stated goal.

These revi resulted in a significant focus of attention on the subject matter within the indus agencies as well.Deficient organizations are subject to increased monitoring and superv follow-up including more frequent reviews.

Restrictions on expansionary activit organizations that are deficient in their Year 2000 preparations have also been put int

## 3.

Assessment of Supervision Review ResultsThe Federal Reserve has been conducting Year 2000 supervisory reviews financial organizations subject to our supervisory authority, coordinating closely banking departments and other federal banking agencies that may share responsibility banking organizations.

Based on these reviews, we conclude that management awarenes and attention to, the Year 2000 problem has improved notably since the Federal Reserve other banking agencies escalated efforts in early 1997 to focus the industry's at ensuring Y2K readiness.

Banking organizations are making substantial progress in ren their systems and, with some exceptions, are on track to meet FFIEC guidelines.

Mos organizations are actively engaged in the renovation and testing of their mission criti Smaller organizations are working closely with their service providers in an effort to readiness and reliability of the services and products on which they depend.

Similarl the US offices of foreign banks are heavily dependent on their parent bank for their readiness.

## 4.

Supervision Follow upTo address deficient organizations, the Federal Reserve is issuing a conf Deficiency Notification Letter to those rated less than satisfactory with respect to readiness program.

We call for a corrective action plan and put the organization on reporting regimen to monitor its progress.

Given our concern that the organization ne its resources to address its deficiencies, rather than expanding, the Federal Reserve organization for advance notification before entering into any contractual commitm making public announcements pertaining to prospective acquisitions that require Reserve approval.

The agency can then determine the possible effects of the expan˝proposal on the organization's deficient Y2K readiness efforts, and possibly discourag expansion if financial and managerial factors are inconsistent with approval of the app

## 5.

Outreach InitiativesThe Federal Reserve is actively participating in numerous outreach initiativ the banking industry, trade associations, regulatory authorities and other groups that conferences, seminars and training opportunities that focus on the Year 2000 an participants understand better the issues that need to be addressed.

Throughout the c federal banking agencies have been working with state banking departments and local b associations in order to develop coordinated and comprehensive efforts to improve the regional programs intended to focus attention on the Year 2000.

These efforts will consistent with the requirements contained in the Examination Parity and Year 2000 Re for Financial Institutions Act (Public Law 105-164), enacted March 20, 1998, which call for the banking agencies to conduct seminars for depository institutions on the impli the Y2K problem on their ability to conduct safe and sound operations.

## 6.

International ScopeThe Federal Reserve has worked actively within the Bank for Internati Settlements (BIS) to ensure that financial regulators around the world are aware of t posed by the Year 2000 and are working to see that the markets and institutions they ov ready for the century date change.

Last September, the G-10 Governors issued a Yea advisory that included a paper prepared by the Basle Committee on Banking Supervision Supervisors) describing the serious nature of the problem, identifying the issues th addressed, and outlining how programs to address the issue should be structured.

Committee on Payment and Settlement Services (CPSS) has established a web site on wh payment systems around the world are posting short reports describing the status readiness in order to promote the transparent sharing of Year 2000 information.We continue to participate in international meetings focusing on the Year issue in order to increase awareness and promote greater understanding and cooperation. this month, the BIS was the site for the Year 2000 Round Table sponsored jointly by th Basle Supervisors, the International Organization of Securities Commissioners, a International Association of Insurance Supervisors.

This meeting, which was atten financial supervisors and representatives from the private sector from more than 50 highlighted cross-border dependencies and the need for international cooperation to en the issue is managed to minimize any disruptions and possible economic ramifications.As a result of the Round Table, a Joint Year 2000 Council of financial reg was formed with the First Vice-President of the Federal Reserve Bank of New York serv the chair.

The Council will serve as a contact point between the financial market reg market participants including private sector groups specifically focused on internatio It will also promote readiness, identify sound practices for dealing with the issue, a global clearing house on Year 2000 issues more generally.A survey by the Basle Supervisors conducted late last year indicated that awareness of the issue is increasing rapidly but that much work remains to be done.

Wh central banks and regulators express cautious optimism that their payments systems and˝institutions will generally be ready, there is increasing recognition that some pr inevitable.

To this end, increasing attention is being focused on the need to ide potential problems before reaching the century date change and to develop contingency ensure the stability of global financial markets.The majority of foreign central banks are confident that payment and sett applications under their management will be Y2K ready.

Like the Federal Reserve, howev operation of foreign central bank payment systems is dependent on compliant products hardware and software suppliers and the readiness of telecommunication and electric infrastructures.

Foreign central banks consider Y2K readiness testing to be a cr complex issue.

The approach of foreign central banks toward raising banking in awareness varies widely.

We are aware that many European banks are stretched for resou a result of the world-wide demand for information technology staff resources an conversion to a single currency.

Similarly, Asian financial institutions are focusi well-known problems, possibly placing full Y2K preparations in jeopardy.

## 7.

Communications EffortsWe have been working intensively to address the issues faced by the industr to formulate an effective communications program tailored to those issues.

Our awareness program concentrates on communications with the financial services industry to our Y2K readiness, our testing efforts, and our overall concerns about the industry' We have inaugurated a Year 2000 industry newsletter, have published periodic bul addressing specific technical issues, and have established an Internet Web site th accessed at the following Internet address:

In have published a set of guidelines for small businesses, including depository insti Year 2000 issues and project management.On behalf of the FFIEC, the Federal Reserve has developed a Year 20 information distribution system, including an Internet Web site and a toll free Fax Ba (888-882-0982).

The Web site provides easy access to policy statements, guidance to ex and paths to other Year 2000 Web sites available from numerous other sources.

It accessed at the following Internet address:

Federal Reserve has also produced a ten-minute video entitled 'Year 2 Executive Awareness', intended for viewing by a bank's board of directors and management, that presents a summary of the Year 2000 five-phase project management p outlined in the interagency policy statement.

In introductory remarks on the video, i that senior bank officials should be directly involved in managing the Year 2000 p ensure that it is given the appropriate level of attention and sufficient resources t issue on a timely basis.

The video can be ordered through the Board's Web http:\\