the third, on “ contingency planning ” treat specific aspects related to y2k. in a final summary panel we will try to find an answer to the question : “ where do we go from here? ” ( good question, indeed. ) a press conference will take place after the first panel at 10. 30 am. our joint year 2000 council chairman, mr roger w. ferguson jr, member of the board of directors, fed washington, and i are going to present the year 2000 problem and its implications for the global financial markets via all media to a - hopefully - broad public. around 12 : 30 you will be invited to lunch here at the hotel. mr edgar meister, member of the board of the deutsche bundesbank and chairman of the banking supervision committee of the european central bank, is going to give a luncheon address. scope and impact of the year 2000 problem although generally well known, it has to be repeated : the cause of the year 2000 computer problem is ridiculously simple. in the days when computer memory was scarce, programmers got into the frugal habit of using only two digits to write a date, so that 1998 was represented as 98. but, as 99 is a higher number than 00, millions of computers simply cannot place the year 2000. instead, they may read the first year of the new millennium as the first year of the century, or as a date that does not exist. even if they pass that test, they still may fail to notice that 2000, unlike most centennial years, is a leap year. thus, at the century - date change or even before - a large number of computer systems, software programs and embedded chip devices currently used will produce errors or will malfunction – unless the date or program logic is modified. with regard to embedded processors, any operation that functions using datasensitive technology may be affected, be it medical pacemakers, heating systems, electricity or transportation. for financial market participants, the year 2000 problem is especially acute. since financial institutions rely heavily on automation to manage information, it will be difficult or even impossible to conduct business if automated applications fail to work properly. given the number and complexity of the date - dependent computerprograms in use, the remediation effort will often have to be colossal. the interdependence of the world ’ s markets and economies makes the year 2000 risk a true global problem and perhaps the biggest challenge ever faced by the world ’ s financial

procedures are robust enough, should individual customer systems fail to operate in a year - 2000 - compatible manner. as you all know, the bundesbank is responsible for monetary policy in germany till the end of this year, but will also continue to form part of the banking supervision authority after the start of stage three of european monetary union. in his luncheon address, my colleague mr edgar meister, who is in charge of the bundesbank´s banking supervision department, and chairman of the ecb - committee on this subject, is going to outline the bank ’ s actions in that field in detail. co - ordination with other institutions ’ activities the bundesbank is not only a part of the financial sector, but also a fiscal agent for the government. at the administrative level, the bank isworking closely with other official institutions to ensure the year - 2000 - compatibility of public authorities. the activities of the public financial sector are managed by the ministry of finance. in june 1998, a “ year 2000 forum ” was called into being by the german banking and insurance supervisory authorities, the bundesbank and private banking associations as a platform for regulators and official and private credit institutions to exchange their views and experiences. the government activities relating to the y2k challenge as a whole are being coordinated by the ministry of economics. in this position, the ministry is also overseeing the preparatory activities of the industrial sector in germany. special attention is being given to the readiness of core infrastructure providers because of their major significance for economic activity in general. in particular, given the financial sector ’ s heavy dependence on telecommunications, water, energy and transportation, any failure to meet the year 2000 challenge in any of these sectors could lead to serious disruptions at the national and international levels. in addition to that, it would probably adversely affect all contingency plans of the entire economy. as you know, our latest joint year 2000 council bulletin also focuses on this matter, and i hope that we will have an opportunity to attract public attention in this respect at the forthcoming press conference. preparations at the european level at the european level, the bundesbank, being a member of the escb, is taking part in the activities of the ecb to ensure the year - 2000 - compliance of escb - wide systems and applications. the necessity for the ecb and the escb to give emu top priority poses an additional challenge to their activities in connection with y2k. however, all the new payment and accounting