Banks step into political breach with warning over Year 2000 crisis
The banks are preparing to refuse to lend to companies which ignore the threat posed by the year 2000 computer timebomb. With Government warnings muted by a lack of senior ministerial commitment and funds, Anthony Bevins, Political Editor, reports that the banks are filling the political vacuum.
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Your support makes all the difference.Plans to pump pounds 1bn into averting a computer breakdown in 2000 have been drawn up by Britain's banks.
Mike Young, assistant director of the British Bankers' Association told The Independent: "We are confident that we have got the banking system under control. But nobody is issuing guarantees. This is just a mega- problem."
Without complex remedial work, some computers that recognise the year by the last two digits could go into meltdown when, in little more than two years time, they move from 99 to 00. Some computers will "think" they have gone back to 1900.
Part of the difficulty faced by the banks - and all business - is that suppliers and customers are all tied together to the timebomb. Conscious of that connection, the banks are now beginning to demand assurances.
"During next year, the questioning will get tougher," Mr Young said. "From now on, increasingly, year 2000 concerns will be a factor in credit assessments.
"I say to any business they can expect that when they go into their bank to borrow money they are going to get asked, `how year 2000 compliant are you? How serious an issue is it for you? What are you doing?'"
But Mr Young added: "Any business that was not into or at the [computer] testing stage by the end of next year may find itself in serious trouble, not only with the banks, but with a whole range of people.
"Its customers and suppliers are going to stop trading with it. When it gets to 1999 they are going to start saying, `I'm not placing orders with this guy, because he's not reliable. The business may not be there when I need it'."
Only Barclays and the Royal Bank of Scotland have issued detailed guidance to customers. Barclays tells its customers: "Having taken the necessary steps to ensure that your business will be year 2000 compliant, you should next enquire about your customers and suppliers. Their failure could have a potential knock-on effect for your business."
It then adds: "Ultimately, lenders will need to know that year 2000 problems will not damage your business."
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