Leading firm in bug 2000 danger
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Your support makes all the difference.FINANCIAL regulators said yesterday that one of the country's most important financial institutions remains at serious risk of failing to tackle the millennium bug on time.
Just six months before the crunch date of 1 January next year, the Financial Services Authority (FSA) warned that the unnamed institution was on "red light" status - an indicator that it will struggle to solve its software problems by 2000.
The mystery financial group is one of 100 companies the regulator considers pose a danger to the financial system if their computer systems fail. A further seven medium-sized financial groups are also on "red".
Michael Foot, head of financial supervision at the FSA, said: "We see the next couple of months as crucial. We will make another assessment in July. Particularly for firms still at red, time is very short."
The regulators are resisting pressure to name the company because of fears that this could cause a "run", scaring customers into suddenly withdrawing their funds. Potentially, this could force the in- stitution into bankruptcy.
IT consultants involved in "year 2000" work privately say it is unlikely that the big four high-street banks are on the FSA's red list. One said: "I think it's more likely to be an insurance firm or a business-to-business company in the City than a high-street bank."
Anxious to avert a panic, the FSA is presenting the news as an improvement. Mr Foot said that three months agoeight large institutions were on "red"; there is now only one.
Yesterday, the regulator said that it would use its full powers to protect consumers. That could include ordering a firm to stop doing business, forcing it to close down, or pressing it to merge with another company.
Institutions must hand the regulator by 30 September a statement declaring that they have addressed their millennium bug problems. If they fail to do so, the FSA will name them.
In addition to the groups on "red", a third of the most important groups - all household names or well-known firms in the City - are still on "amber" (behind schedule but expected to catch up before January).
"What will happen is unpredictable. So it is imperative that firms understand, from the top down, the kind of risks they may face and think through and test the arrangements for managing those risks effectively," Mr Foot said.
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