Las Vegas told not to fret over Y2K issue

Friday, April 30, 1999 | 11:35 a.m.

The Federal Reserve Bank is confident that bank accounts won't disappear and ATMs will continue to function when the new millennium arrives.

But just in case consumers don't share the optimism, twice the amount of currency presently in circulation will be available for withdrawal at the end of December.

Robert C. Johnson, assistant vice president of banking supervision and regulation in the Los Angeles office of the region's Federal Reserve Bank, said the Fed is Y2K OK -- computerese for being prepared for whatever incidents will occur when the calendar changes from 1999 to 2000 in eight months.

Several experts have said chaos is on the horizon when the clock strikes 12 on New Year's Eve. That's because some of the world's computers will recognize 1-1-00 as Jan. 1, 1900, and will devour data bases that have been in computers for years.

Banks, utilities and numerous government regulatory agencies have been under the gun for months to be sure their computers are Y2K compliant and will work on Jan. 1. At Thursday's "Get Y2K OK" conference in Las Vegas, Johnson and two other speakers and two panels reassured about 50 people in attendance that, yes, the city, county, state and federal institutions are ready.

After the presentations, participants attended a trade show and exposition -- the "fixer mixer" -- to get one-on-one time with computer consultants offering solutions to Y2K problems.

Johnson, a former banking executive in Las Vegas, exuded confidence as he told conference attendees that the Federal Reserve has been ready for Y2K since mid-1998. Even today, the Fed continues to test backup systems and contingency plans.

Johnson said the nation's banks have been told to have their own contingency plans prepared for the possibility of unexpected problems. Banks have been told to plan for alternative power sources in case electricity is out, to back up all customer records prior to the end of the year and to be prepared to conduct bank business manually.

Although Johnson said every eventuality is being checked by the Fed, it is preparing for a major run on cash in the week preceding the end of the year.

Johnson said there is about $500 billion in U.S. currency in circulation with about two-thirds of that in foreign countries. In the United States, there's about $100 billion in circulation and about $50 billion stored in the nation's bank vaults.

As a precaution, the Fed will have $200 billion available for withdrawals.

But Johnson hopes people won't panic and take their money out of banks -- it's more likely to get lost or stolen that way.

"The Fed has been highly prepared for the unexpected," Johnson said. "We've made it through earthquakes, hurricanes and floods and have kept the banks open. We're confident the banking system will work when the new century turns over."

Part of the issue is having confidence in other organizations under the Y2K gun.

A panel of Y2K compliance experts working with local utility companies assured attendees that no problems are expected for electricity, gas and water service. Nevada Power and Southwest Gas have checked and rechecked systems and suppliers. The Las Vegas Water District plans to fill local reservoirs with water so that the extra large supply can be gravity-fed into distribution lines.

Carl Morse, special assistant for Y2K to the deputy administrator of the U.S. Small Business Administration, said most small business owners seem confident that they are ready for whatever problems may occur.

For companies that have balked at finding compliance solutions, the SBA has a new loan program available, specifically to pay for Y2K equipment upgrades. The Small Business Year 2000 Readiness Act is making special loans available to the nation's 24 million small businesses.

Morse estimated that 97 percent of the nation's businesses have no contingency plans available if Y2K problems paralyze them. He said 99 percent of the nation's small businesses will spend less than $5,000 on computer solutions while 1 percent will spend $25,000 or less.