mr ferguson assesses financial sector y2k readiness in the united states and abroad with less than 100 days to go remarks by mr roger w ferguson jr, member of the board of governors of the us federal reserve system and chairman of the joint year 2000 council, before the wallenberg forum at georgetown university, washington, d. c., on 28 september 1999. * * * year 2000 : ninety - four days and counting my topic today is a timely one – the year 2000. my comments will focus on the readiness of the financial services industry in the united states and the significant work and coordination that have occurred globally to prepare for the century change. the century date change poses considerable risk and is a major challenge for all sectors both public and private. although us financial market authorities established specific and aggressive deadlines for their industries to prepare for the century date change, in the final analysis, the boards of directors and senior management of firms are responsible for ensuring that their organizations are prepared for the year 2000. we turn to them, ultimately, to ensure that their firms are able to conduct business and provide uninterrupted services after the century date change. increased confidence in readiness of us financial industry and other sectors with only ninety - four days remaining before the century rollover, i believe that the us financial sector is ready. my assessment is based on publicly available facts and information developed by supervisors and industry participants. more than 99 % of the approximately 22, 000 federally insured depository institutions and credit unions have demonstrated to examining supervisors that they have completed preparations for the year 2000, tested their mission - critical systems and put them into production. securities and futures brokers, dealers, and markets have completed or are completing y2k - readiness certifications, and both industries have participated in large - scale “ street ” tests during which literally hundreds of thousands of forward - dated transactions were processed on exchanges and then cleared and settled using automated systems that simulate the century rollover at their depositories and clearing houses. these tests revealed y2k errors at a level of something less than one - tenth of 1 %, and all were quickly corrected. in fact, the testing tools now being used are so thorough that in many cases non - y2k program bugs have been identified in existing programs and systems, and i am happy to report that they have been eradicated as well. retail and wholesale payment systems – a vital part of the financial sector and one in which the federal reserve is a major service provider

supervisors, and the international organization of securities commissions. the council has provided the key forum for y2k communications among financial market authorities around the globe. to date, more than 100 countries have participated in our activities. i chair the joint council, and i am very proud of what we have achieved over the past year. the joint council has issued a number of guidance papers to assist regulators in organizing the year 2000 efforts of the financial services industries within their countries. these papers address the scope and impact of the year 2000 challenge, the independent assessment of the preparedness of financial institutions, testing, information sharing, and contingency planning. in addition, the joint council issues bulletins summarizing recent developments and best practices for supervisors. most important, the joint council is completing a second round of regional meetings that focus on contingency planning, event management, and public communications strategies. these meetings provide an excellent opportunity for supervisors to discuss common interests within specific geographic areas, to share information, and to coordinate regional plans in anticipation of the rollover. the joint council also serves as a point of contact for various national and international private - sector initiatives. in this regard, it has established an external consultative committee to enhance information - sharing between the public and private sectors. the ecc includes representatives of internationally oriented organizations, including the international monetary fund, the world bank, and the major cross - border financial utilities, such as s. w. i. f. t., for making international payments and settling transactions. the council is now in the process of establishing information sharing facilities for financial market authorities to use during the rollover period. private sector activity in the international financial community, we have a highly active private sector that has been effective in promoting the readiness of financial services firms and markets around the globe. as i mentioned earlier, private sector groups, such as the global 2000 coordinating group, have been educating private sector executives and public sector officials about the international interest in the readiness of key sectors in their countries that are critical to international commerce, such as telecommunication, power, financial service, shipping and transportation. no one can declare with certainty how the millennium rollover will unfold internationally, and much of my information is anecdotal. however, the financial service sector is generally perceived to be better prepared than other sectors in almost every country. in general, i can report that the financial firms of the developed countries, like those in the united states, either are, or appear to be making good