will face global recession. ultimately i believe the number and extent of computer system disruptions will not be used as the measure of our success in addressing the year 2000 problem. instead, our success will be measured by our ability, and the public ’ s confidence in our ability, to conduct business operations effectively for the balance of this year, on january 3, 2000, and thereafter. current state of international year 2000 efforts some foreign governments and institutions started their year 2000 program years ago, while others were initially reluctant to recognize that a problem even existed. this reluctance hindered efforts to take early action. in some areas, already limited resources were dedicated to other activities, such as the euro conversion or attempts to restructure weakened economies. those countries that recognized the problem early and had sufficient resources assembled technical experts from whatever source was available. recognizing these challenges, in april 1998 the bank for international settlements hosted a year 2000 roundtable to raise international awareness. at the close of the conference, the sponsoring organizations, the basle committee on banking supervision, the g - 10 committee on payment and settlement systems, the international association of insurance supervisors, and the international organization of securities commissions established the joint year 2000 council. the council was formed as a direct result of the recognition of the complexity of the global financial services industry and the need to communicate proactively with regulatory and supervisory authorities. as chairman of the joint year 2000 council, i work with other members of the council to ensure that a high level of attention is given to the challenge within the global financial supervisory community and to serve as a point of contact with national and international private sector initiatives. to that end, the council operates with the participation of central banks, insurance and securities regulators, and banking supervisors. it is the first international body that brings together such a range of financial regulators. it is important to note that the joint year 2000 council is not the “ international year 2000 enforcement agency. ” we do not have on - site examiners, nor are we meant to replace the efforts of national regulators. the council established an external consultative committee, or ecc, to enhance the degree of information sharing between the public and private sectors. this committee includes representatives of internationally - oriented organizations including the global 2000 coordinating group, the international monetary fund, the world bank, and financial service providers, such as s. w. i. f. t., euroclear, and cedel. our most important role may be to provide a forum to facilitate information sharing

reserve ’ s contingency planning for the year 2000. banks are urging their regulators and other government officials to promote public confidence by speaking clearly and forcefully about year 2000 preparedness. regulators can play a constructive role in making sure that year 2000 information disseminated to the public is factually accurate, balanced, and broadly distributed. communications are a shared responsibility. research tells us that customers want to hear directly from their bank and that the public is interested in specifics, not generalities, about our preparations. the federal reserve is expanding its program of outreach, with every reserve bank working on an aggressive program of local communications. i urge you to do the same. the public needs to know that the year 2000 is like other challenges we have met through careful preparation, risk reduction, and contingency planning to allow us to work around any problems that might occur. public obligations and patterns of behavior as we get closer to the century date change, there will no doubt be more sensational coverage in the media. it is our obligation to be smart consumers of information and to listen to responsible, not alarmist, voices. remember, as with anything that has a degree of uncertainty, there will always be those who predict the most dire outcomes. they have generally been wrong in the past, and i expect that they will be wrong again. there are likely to be some disruptions from the century date change ; nothing this large and complex can be perfectly faultless. we should remember, however, that there have been serious disruptions to service in daily life before, from storms, temporary power outages, disruptions of telephone service, etc. in general, these prove to be annoying and inconvenient, but nothing more. we also need to maintain reasonable and responsible patterns of behavior. it is possible that market participants may reduce clearing and settlement activity on december 31 and january 3. several participants, however, have indicated plans to reduce activity over a substantially longer period, up to a month. while such a reduction may appear to be prudent to an individual firm, such action by multiple participants raises the possibility of thin markets with accompanying erratic price behavior. our perspective has been to encourage market participants, especially those who hold themselves out as intermediaries, to consider carefully the overall implications, including for market liquidity, of reductions in trading volume so that risks and benefits of such initiatives are appropriately balanced. i understand that some organizations that normally make payroll or other payments using the ach are thinking