ABA Takes Y2K Action
The banking industry is taking action to reduce year 2000 (Y2K) risks. The American Bankers Association (ABA) announced a comprehensive plan to provide banks with the education and detailed instruction necessary to prepare their computer systems for Y2K. Most existing computer programs use only two digits to identify the year. If these programs are not updated, many computer applications could fail by or at January 1, 2000.
The ABA plan comes little over a month after the FDIC took its first enforcement actions against three Georgia banks that have prepared inadequately for Y2K. The FDIC cease-and-desist orders were issued to ensure that information systems are in place, internal controls are maintained and the banks' computer-related operations will not fail on January 1, 2000.
The ABA plans to issue more than 60 educational products, organize national conferences and telephone seminars and establish an industry mentorship alliance-a research and communications dream team from banks of all sizes, top Y2K solutions vendors and other Y2K experts.
For more on the Y2K project, call the ABA customer service center at 800-338-0626.
Pocket Guide for Directors
The FDIC issued informal guidance for members of financial institution boards of directors on their duties and responsibilities. The Pocket Guide for Directors provides general guidelines on selecting and retaining qualified management, maintaining independence, keeping informed about their institutions' activities and condition and avoiding preferential transactions.
The guide urges directors to supervise management by
- Establishing clear policies.
- Monitoring the bank's operations through a review of detailed
- Establishing third-party reviews of the accuracy of the bank's management information and compliance with board policies, procedures, laws and regulations.
Copies of the pocket guide are available by calling the FDIC Public Information Center at 800-276-6003 or 202-416-6940.