News Release
Financial Sector Preparations for the Year 2000 - Issue 6
19 October 1999
The Bank of England publishes its sixth report on the financial sector's preparations for the Year 2000 (the "Blue Book") on Tuesday 19 October.
As we move into the final weeks of 1999, confidence remains high that it will be "business as usual" for the UK financial sector through the millennium date change period. The UK financial sector both started and completed its Year 2000 remediation and testing work early and considerable work has been undertaken to ensure that the industry has effective and consistent contingency plans. Much effort is also being put into the management of communication and testing over the weekend itself.
John Trundle, Head of the Bank's Market Infrastructure Division said:
"We are now entering the final stage of what, for many, has been a very long process. The financial sector is understandably confident as a result of its preparations. But it is crucial that we do not, at this late stage, become complacent. The final preparations, of fine tuning contingency plans and planning the management of the weekend, must be completed. Individual institutions need to ensure their decision-taking process is clear and that their decision-takers are available. Effective and open communication within and between institutions remains key. The Bank, together with the FSA and government, will continue to play a role in facilitating information flows up to and over the millennium weekend."
The main focus of this Blue Book is the contingency and event management plans that are being made by the major UK infrastructure providers. In previous issues these institutions have given details of their remediation and testing programmes. In this issue we also publish updates of the reports in Issue 5 made by twelve other central banks on the Year 2000 preparations in their countries. Tables showing the current plans of the financial infrastructure providers in the UK and twelve other major financial centres for opening and closing over the millennium changeover period are also included.
This Blue Book also discusses the contingency plans for note distribution. The Bank, banks, building societies, the Post Office and APACS have continued to work closely together on plans to ensure that there is an ample supply of notes to meet demand over the millennium transition. This issue explains that there are very substantial additional sources of notes available to meet demand. It also discusses the logistical planning that has been undertaken to ensure that the extra cash is in the right place at the right time.
The Bank has continued to monitor financial market behaviour and plans ahead of the year-end. Discussions with market participants continue to indicate that most financial institutions expect the markets to operate largely as normal through the millennium period, but to be somewhat thinner, as is usual at year-ends. The Bank will be particularly alert to the need to supply an adequate amount of sterling liquidity through the millennium period. To this end, the Bank has recently announced a substantial extension to the collateral it will accept in its daily open market operations. The Bank has also announced a temporary extension to its repo facility, allowing its money market counterparties to repo eligible securities to the Bank for a period of up to three months, rather than for the normal fortnight. The Bank will continue to monitor the market closely, in order to be able to respond quickly to market developments.
Notes to Editors
1 The Bank established its series of Blue Books to raise awareness of the Year 2000 problem and to share information about the Year 2000 preparations of the financial infrastructure providers. The Bank has also sought to encourage co-operation and the development of best practice within the financial sector.
2 The first issue of the Blue Book was published in February 1998. This, and subsequent issues, have given details of the remediation and testing work being undertaken by the providers of payment and settlement systems, clearing and netting services, financial information and telecommunications services. The third issue (October 1998) focussed on the issues surrounding testing. The third and fourth (March 1999) issues gave guidance on approaches to contingency planning and risk mitigation. The fifth issue (July 1999) contained reports on preparations in twelve other major financial centres and a fuller report on work of major card payment schemes and their members.
3 The Bank intends to publish a final Blue Book in early December 1999. This will focus on details of the financial sector's arrangements for the millennium changeover period. It will include lists of contact details and information sources as well as further details of the Bank and FSA's millennium operating regimes. Issue 7 will also include a report of the second Bank of England Year 2000 Symposium to be held on 1 November 1999 for senior financial market practitioners.
4 The central bank reports in this Blue Book update those published in issue 5 and cover: Belgium, Canada, France, Germany, Hong Kong, Italy, Japan, the Netherlands, Singapore, Sweden, Switzerland and the United States.
