Take money precautions now for Y2K
When computer clocks tick over to 00 on Jan. 1, one can be pretty sure that the microwave will still work. And don’t worry about the electric blender.
But hey, what about the important stuff? Like my money?
There is no need to panic – stuffing your mattress with your savings is not necessary. One should take a few precautions, though.
* Pay close attention to your financial paperwork. Automated teller receipts, banks statements, credit card receipts and other transaction records should be closely scrutinized as the year 2000 approaches. Ask for printed records of everything, such as loan and mortgage payments.
* Get a copy of your credit report. Verify that it’s correct before the end of the year.
* Don’t withdraw all your cash. In other words, don’t panic. The Federal Reserve advises that you have no more than $500 in cash on hand, enough for about four or five days.
The Federal Deposit Insurance Corporation, one of the agencies monitoring the banking industry’s Y2K compliancy progress, has given a passing grade to federally insured banks – only 0.2 percent of which were listed as “unsatisfactory.” The FDIC has been reminding investors that if an institution were to fail, all insured deposits would still be absolutely safe.
Meanwhile, Wall Street has just completed a six-week Y2K compliance testing program, finding only rare instances of Year 2000 computer problems.
The tests simulated the execution of 850 mock trades involving 260,000 transactions for the period of Dec. 29, 1999 to Jan. 3, 2000. The tightly scripted tests turned up problems related to the Y2K bug just 0.02 percent of the time, the Securities Industry Association said.
”The Y2K issues were rare and quickly repaired,” said Donald D. Kittell, executive vice president of the association, which represents 740 investment firms. ”The test served its purpose in that it helped us detect problems or areas that needed further work while we still have time to fix them.”
”Our contingency plans will be much more thorough as a result of what we’ve learned.”
Arthur Levitt, chairman of the Securities and Exchange Commission, said he was pleased with the test results.
”I am heartened by the success the securities industry has achieved in addressing the Y2K computer problem thus far,” he said in a statement released in Washington. ”This is a product of the great level of cooperation and the seriousness with which the industry has addressed this issue.”
The SIA estimates the securities industry will spend $5 billion to correct the problem, which stems from the fact that most computers use just two digits to denote the year, causing an unknown number to misread 00 as 1900 instead of 2000. If the problem is not fixed, it could leave some computers unable to sort dates, calculate transactions or perform other operations.
The tests were meant to detect trouble in the millions of daily transactions between the brokerages, clearing houses, mutual funds and investment banks.
However, each of those institutions has its own internal testing to do of everything from payroll to accounting systems – all in various stages of completion.
If you still have questions about Y2K and finance, there are several places to look for help. The FDIC information line is a good source: 1-800-934-3342. The Federal government’s info line is 1-888-872-4925.
Note: The Associated Press contributed to this report.
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