Hd Here’s to
Regulation
Let’s admit it, there is some method to the madness of those federal regulators. Thanks largely to government oversight, airplanes don’t fall out of the sky, food is almost always safe, and drugs don’t become available until they have been thoroughly tested. When enforced selectively and efficiently and those are two huge qualifiers federal regulations enhance our quality of life in innumerable ways.
Which brings us to the far-sighted and quite successful efforts by the banking industry prodded by those federal regulators to fix up its computers in time for midnight, Dec. 31, 1999. That, of course, is the witching hour when systems not replaced or reprogrammed are supposed to go kablooey the so-called Y2K problem that the gloom-and-doom types expect to cause great panic and disruption.
As of the end of 1998, 97 percent of the 10,415 banks and thrifts insured by the Federal Deposit Insurance Corp. were rated as “satisfactory” in preparing for Jan. 1, when computers will have to recognize the “00” as 2000 and not 1900. Only 16 banks and thrifts nationwide received an “unsatisfactory” grade nationwide by the FDIC.
Further inspections will be made between now and the end of the year and those “satisfactory” grades conceivably could drop. But federal officials appear generally encouraged by the banks’ compliance efforts a far cry from the concerns raised by a Senate panel last week about the lack of preparedness overseas and the possibility that it might even lead to an increase in terrorism.
The banking industry’s responsiveness is not all that surprising. Few industries are as vulnerable to disruptions and panic from a widespread collapse of computer systems.
Imagine walking up to your ATM on Jan. 1, 2000 and not being able to withdraw cash or worse still, imagine your bank not having any record of your account. Such a prospect, though not considered likely, has led to a variety of contingency plans.
Even columnist Jane Bryant Quinn, hardly an alarmist when it comes to money matters, suggests having enough cash on hand to last a few days and keeping track of all financial records on paper.
Fear of the unknown can be a powerful influence nearly 40 percent of those responding to an unscientific CNN/fn survey expect ATMs not to accept deposits or dispense cash on Jan. 1. Despite the insistence of bank executives that everything will be all right, there’s nothing wrong with taking a few reasonable steps.
The real heavy lifting, however, must come from the institutions themselves. Such an effort is only possible through the existing regulatory framework of the federal government. And despite grumbling by some bankers that the feds are a hindrance in the effort to compete with other players in the financial services sector, they do come in handy during times of national preparedness. If there’s any doubt, consider the relative readiness of banks vs. other industries.
Is this a vague way of calling for stepped-up regulations in other areas, such as telecommunications and the Internet? Not at all just a reminder that some industries and situations are so critical to the nation’s economic wellbeing that safeguards become necessary. Y2K is a compelling example of that necessity.
