Chapter 18: Economic Policy
1/14/99

The inability of most computer programs to distinguish the year 1900 from the year 2000 poses substantial risks to all financial institutions. The majority of computer operating systems and programs currently in use have six-digit date fields (YYMMDD). For example, this means 991231 would represent December 31, 1999. The six-digit field, with only two digits for the year, is the basis for all date-related calculations within most computer systems today, particularly mainframes. The fundamental problem posed for these systems by the arrival of the year 2000 is that they have no way of expressing a date past year-end 1999: 000101 will be interpreted by them as January 1, 1900.

The Federal Reserve Board has been long aware of this serious problem that could adversely affect banking operations of all types. For information on how the Federal Reserve Board is planning to deal with the Year 2000 problems go to the web site atwww.bog.frb.fed.us/y2k/default.htm.

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