A new international council and Web site will help multinational companies find gaps in the year 2000 readiness of up to 200 countries and the critical utilities within their borders.
The Joint Year 2000 Council, an international clearinghouse for year 2000 updates, hopes its World Wide Web site (now at www.bis.org but soon to change to http://jy2kcouncil.org) will prod foreign voice and data carriers and power companies, among others, into action, said the council's chairman, Ernest Petrikis.
If a critical voice and data carrier or a power supplier in a foreign country hasn't posted information on the site, a company should assume the utility may have some year 2000 problems and plan to work around them, Petrikis said.
Petrikis, a first vice president at the Federal Reserve Bank of New York, announced the council's intentions July 6 at a U.S. Senate Committee field hearing that addressed how failures abroad will affect the U.S. economy.
Much of the year 2000 attention by the U.S. Federal Reserve banks and other financial institutions has been focused on voice and data networks because some banks rely on data circuits for up to 80 percent of their transactions, bankers and analysts said. One connection abroad might be handled by a dozen carriers that have interdependency agreements. If one network switch that is date-sensitive fails, the connection would be lost.
That could have real effects on monetary flow. Two systems for transferring payments and foreign exchange transactions (the Clearing House Interbank Payments System, or CHIPS, and the Fedwire in the U.S.) process US$3 trillion in fund transfers on an average day, Petrikis said. The Brussels-based Society for Worldwide Interbank Financial Telecommunications (SWIFT), which advises and confirms payments, carries more than 3 million messages per day worldwide, he added.
The many interconnections of the global financial market infrastructure imply that financial market participants in the U.S. could be affected by Y2K-related disruptions in other financial markets, Petrikis said in his testimony. We should be realistic in accepting that some disruptions are inevitable.
Petrikis said the Web site, operated by the Bank for International Settlements in Basel, Switzerland, will contain contact information for each country for governments, financial industry supervisors, chambers of commerce and major utilities.
Such an open Web site is a nice idea in an idealistic world, but I don't know if companies will take the risk of using that, cautioned Howard Rubin, an analyst at Meta Group Inc. in Stamford, Connecticut.
Rubin said a wide variation in spending by foreign governments and industries shows that global companies must act themselves. Global companies are aware of the problem and [are] sending envoys abroad and asking tough questions, he said.
Still, a spokesman at J. P. Morgan & Co. in New York said international coordination from any source is helpful. For example, J. P. Morgan is carefully watching network interoperability tests begun this week by the Securities Industry Association in New York. There's no way one company can handle all this on its own, said spokesman Ned McCormack.