mr ferguson looks at the challenges to the us payments system posed by the year 2000 problem remarks by mr roger w ferguson jr, a member of the board of governors of the us federal reserve system, before the national automated clearing house association in atlanta, georgia on april 13, 1999. the payments system and year 2000 : current preparations and challenges thank you for your invitation to speak today on the timely and critical topic of the year 2000 challenge to the payments system. as an industry, we have a tremendous responsibility to the public to ensure the smooth operation of the payments system through the year 2000 and beyond. this morning i would like to discuss the global challenge presented by the year 2000 problem and describe international efforts, particularly those of the joint year 2000 council, to assist the worldwide financial services industry to be ready for the century date change. in particular, i would like to focus on contingency and risk management initiatives undertaken by central banks and the state of readiness of federal reserve payment systems, such as fed ach. finally, i will discuss our need to recognize our responsibility to the general public and our need to continue to develop cooperative efforts between public - sector and private - sector organizations. global challenge with less than a year left before the millennium change, it still remains difficult to judge its global impact. the good news is that we are not faced with inaction and there are early indications that the financial industry, in general, is working diligently to be prepared. the euro conversion, which i will elaborate on later, demonstrates that the financial industry can manage significant changes to its systems. it is also important to note, however, that the year 2000 deadline is not a single event ; it is arriving in stages based on dates typically used in financial systems that give us an “ early warning ” of potential problems. as an example, for any financial systems that look ahead one year, the early january 1999 dates provided a test of their year 2000 readiness. during 1999, other application look ahead dates will provide further indications of our readiness as well as our ability to initiate our contingency plans. given the sheer number of computers and chip - based systems, and the manual nature of the fixes that have emerged to date, we are likely to experience some degree of disruption. i believe most disruptions will prove to be mild and short - lived and, as reported in a recent article, their severity effect will be labeled as “ headaches, not disaster. ” consequently, i do not think that we

instance, one of those challenges is the complex relationship between the dollar and geoeconomics, commonly defined as the interplay between economic and geopolitical tools and objectives. rising geopolitical tensions, sanctions against russia, china's efforts to bolster usage of the renminbi, and economic fragmentation all can affect the international use of the dollar, most visibly as a store of value and reflected in its use in official foreign exchange reserves. these same factors can also affect the dollar's role as a medium of exchange, such as in its use in trade invoicing, global banking, international debt issuance, and foreign 1 / 3 bis - central bankers'speeches exchange transactions. these topics will be addressed by two of our presenters today. linda goldberg will present a paper addressing the effects of geoeconomic tensions, focusing on the dollar's use in official foreign exchange reserves. linda and her coauthors find that financial sanctions and geopolitical distance from the united states are associated with lower dollar shares in foreign exchange reserves. looking more broadly, ryan chahrour will present work exploring the potential effects of escalating conflict and protectionism on the dollar's dominance in connection with efforts to promote the use of other currencies such as the renminbi. he and his coauthors find that both sanctions and policies that directly support the international role of the renminbi may reduce the prominence of the dollar if these sanctions and policies are long - lasting. the shifting cross - border payments landscape - including the rapid growth of digital currencies - could also pose challenges to the dominant role of the u. s. dollar. angelo ranaldo will provide an overview of aspects of that payments landscape, focusing on the world's largest multicurrency cash settlement system for foreign exchange, the continuous linked settlement payment system, and its role in facilitating cross - border payments by reducing settlement risk. in the panel moderated by michelle neal this afternoon, the panelists will take a broader look at the current landscape of crossborder payment systems and how new technologies such as central bank digital currencies and faster transactions could potentially affect u. s. dollar usage and global capital flows. stijn claessens, in his keynote address, will expand on similar themes and pose questions that still need to be explored by researchers engaged on this topic. while recognizing that the u. s. dollar may face some challenges to its dominance in the future, we, as